Attached files
file | filename |
---|---|
S-1 - NEPHROS INC | v197780_s1.htm |
EX-5.1 - NEPHROS INC | v197780_ex5-1.htm |
EX-99.3 - NEPHROS INC | v197780_ex99-3.htm |
EX-99.2 - NEPHROS INC | v197780_ex99-2.htm |
EX-99.5 - NEPHROS INC | v197780_ex99-5.htm |
EX-99.1 - NEPHROS INC | v197780_ex99-1.htm |
EX-4.11 - NEPHROS INC | v197780_ex4-11.htm |
EX-99.4 - NEPHROS INC | v197780_ex99-4.htm |
EX-10.56 - NEPHROS INC | v197780_ex10-56.htm |
EX-99.6 - NEPHROS INC | v197780_ex99-6.htm |
EX-99.7 - NEPHROS INC | v197780_ex99-7.htm |
EX-23.1 - NEPHROS INC | v197780_ex23-1.htm |
Exhibit
10.57
FORM OF REGISTRATION
RIGHTS AGREEMENT
This
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of
__________, 2010, by and between NEPHROS, INC., a Delaware corporation (the
“Company”), and LAMBDA INVESTORS LLC (“Lambda”).
WHEREAS,
Lambda is the beneficial owner of certain securities issued by the Company;
and
WHEREAS,
the Company and Lambda deem it to be in their respective best interests to set
forth the rights of the Holders in connection with the Registrable Securities
(as defined below).
NOW,
THEREFORE, in consideration of the premises and mutual covenants and obligations
hereinafter set forth, the Company and Lambda, intending legally to be bound,
hereby agree as follows.
Section
1. Definitions. As used
in this Agreement, the following terms shall have the following
meanings:
“Affiliate”
of any person means any other person who either directly or indirectly is in
control of, is controlled by, or is under common control with such
person.
“Business
Day” shall mean any Monday, Tuesday, Wednesday, Thursday or Friday that is not a
day on which banking institutions in The City of New York are authorized by law,
regulation or executive order to close.
“Common
Stock” shall mean the common stock, par value $0.001 per share, of the
Company.
“Effectiveness
Date” shall mean, with respect to the Resale Registration Statement, the
ninetieth (90th) day following the Filing Date in the event the Resale
Registration Statement is not subject to review by the SEC, or the one hundred
eightieth (180th) day following the Filing Date in the event the Resale
Registration Statement is reviewed by the SEC; provided that, if the
Effectiveness Date falls on a Saturday, Sunday or any other day which shall be a
legal holiday or a day on which the SEC is authorized or required by law or
other government actions to close, the Effectiveness Date shall be the following
Business Day.
“Effectiveness
Period” shall have the meaning set forth in Section 3(a).
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended (or any similar
successor federal statute), and the rules and regulations thereunder, as the
same are in effect from time to time.
“Filing
Date” shall mean the thirtieth (30th)
day after the
closing of the Rights Offering; provided that, if the
Filing Date falls on a Saturday, Sunday or any other day which shall be a legal
holiday or a day on which the SEC is authorized or required by law or other
government actions to close, the Filing Date shall be the following Business
Day.
“Form
S-1” shall mean such long registration form under the Securities Act as in
effect on the date hereof or any successor or similar registration form under
the Securities Act subsequently adopted by the SEC which does not permit
inclusion or incorporation of certain information by reference to other document
filed by the Company with the SEC.
“Form
S-3” shall mean such short registration form under the Securities Act as in
effect on the date hereof or any successor or similar registration form under
the Securities Act subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
“Holder”
shall mean Lambda and any transferee or assignee of record of Registrable
Securities in accordance with Section 10(c) or any other person owning of record
Registrable Securities that have not been sold to the public.
“Losses”
shall have the meaning set forth in Section 5(a).
“New
Warrants” shall mean the warrants for the purchase of shares of Common Stock of
the Company issued or issuable to Lambda in the Rights Offering.
“Person”
shall mean an individual, partnership, corporation, limited liability company,
joint venture, trust or unincorporated organization, a government or agency or
political subdivision thereof or any other entity.
“Prospectus”
shall mean the prospectus included in any Registration Statement, as amended or
supplemented by a prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus.
“Registrable
Securities” shall mean (i) shares of Common Stock issued or issuable to Lambda
in the Rights Offering, (ii) the New Warrants (including any shares of Common
Stock issued or issuable upon the exercise of any such New Warrants), (iii) the
Wexford Warrants (including any shares of Common Stock issued or issuable upon
the exercise of any Wexford Warrants) and (iv) any other securities issued as a
result of, or in connection with, any stock dividend, stock split or reverse
stock split, combination, recapitalization, reclassification, merger or
consolidation, exchange or distribution in respect of the Common Stock referred
to above.
“Registration
Statement” shall mean any registration statement which covers any of the
Registrable Securities pursuant to the provisions of this Agreement, including
the Prospectus included therein, all amendments and supplements to such
Registration Statement, including post-effective amendments, all exhibits and
all material incorporated by reference in such Registration
Statement.
“Resale
Registration Statement” shall mean the Registration Statement referred to in
Section 3(a).
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“Restricted
Securities” shall have the meaning set forth in Section 2 hereof.
“Rights
Offering” shall mean the Company’s registered offering of up to an aggregate of
175,000,000 shares of Common Stock at a price of $0.02 per share and a certain
pro rata number of the New Warrants to its existing stockholders.
“Rule
144” shall mean Rule 144 promulgated under the Securities Act, as amended from
time to time, or any similar successor rule thereto that may be promulgated by
the SEC.
“Rule
415” shall mean Rule 415 promulgated under the Securities Act, as amended from
time to time, or any similar successor rule thereto that may be promulgated by
the SEC.
“SEC”
shall mean the Securities and Exchange Commission, or any other federal agency
at the time administering the Securities Act.
“Securities
Act” shall mean the Securities Act of 1933, as amended (or any similar successor
federal statute), and the rules and regulations thereunder, as the same are in
effect from time to time.
“Underwritten
Offering” shall mean a registered offering in which securities of the Company
are sold to an underwriter for reoffering to the public.
“Wexford
Warrants” shall mean the Class D Warrants, as amended to extend the term to
equal the term of the New Warrants, held by Lambda as of the date of this
Agreement.
Section
2. Securities Subject to this
Agreement. The
securities entitled to the benefits of this Agreement are the Registrable
Securities but, with respect to any particular Registrable Security, only so
long as such security continues to be a Restricted Security. A Registrable
Security that has ceased to be a Restricted Security cannot thereafter become a
Restricted Security. As used herein, a Restricted Security shall cease to be a
Restricted Security, and will no longer be a Registrable Security hereunder,
when: (i) it has been registered under the Securities Act, the registration
statement in connection therewith has been declared effective and such
Restricted Security has been disposed of pursuant to such effective registration
statement; (ii) it is eligible to be sold or distributed pursuant to Rule 144
without restriction; or (iii) it shall have ceased to be
outstanding.
Section
3. Required
Resale Registration
(a) On
or prior to the Filing Date, the Company shall prepare and file with the SEC a
“resale” Registration Statement (once declared effective by the SEC, the “Resale
Registration Statement”) providing for the resale of all Registrable Securities
for an offering to be made on a continuous basis pursuant to Rule 415. The
Resale Registration Statement shall be on Form S-1 or another appropriate form
in accordance herewith and with the Securities Act and the rules promulgated
thereunder, except that if the Company is then eligible to register for resale
the Registrable Securities on Form S-3, such registration shall be on Form S-3.
Such Resale Registration Statement shall also cover, to the extent allowable
under the Securities Act and the rules promulgated thereunder (including Rule
416), such indeterminate number of additional shares of Common Stock resulting
from stock splits, stock dividends or similar transactions with respect to the
Registrable Securities. The Company shall use its commercially reasonable best
efforts to cause the Resale Registration Statement to be declared effective
under the Securities Act as promptly as possible after the filing thereof, but
in any event prior to the Effectiveness Date, and to keep such Resale
Registration Statement continuously effective under the Securities Act until all
of the Registrable Securities have ceased to be Restricted Securities (the
“Effectiveness Period”). The Company shall immediately notify the Holders via
facsimile or electronic mail of the effectiveness of the Resale Registration
Statement on the same trading day that the Company telephonically confirms
effectiveness with the SEC, which date shall be the date effectiveness of the
Resale Registration Statement is granted by the SEC.
3
(b) As
a condition to the inclusion of its Registrable Securities in the Resale
Registration Statement, each Holder 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 or as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Agreement.
(c) In
connection with the Company’s registration obligations hereunder, the Company
shall, as expeditiously as reasonably possible:
(A) Prepare
and file with the SEC such amendments, including post-effective amendments, to
the Resale Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Resale Registration Statement
continuously effective as to the applicable Registrable Securities for the
Effectiveness Period; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement (subject to the terms of this
Agreement), and as so supplemented or amended to be filed pursuant to Rule 424
of the Securities Act; (iii) respond as promptly as reasonably possible to any
comments received from the SEC with respect to such Resale Registration
Statement or any amendment thereto or any document filed with the SEC that would
suspend the effectiveness of such Resale Registration Statement, and as promptly
as reasonably possible provide the Holders with true and complete copies of all
correspondence from and to the SEC relating to such Resale Registration
Statement (other than those portions of any correspondence containing material
nonpublic information); and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by such Resale Registration
Statement as so amended or in such Prospectus as so supplemented; provided, that
before filing such Resale Registration Statement or Prospectus, or any
amendments or supplements thereto, the Company shall furnish to one counsel
selected by the Holders holding a majority of the Registrable Securities covered
by such Resale Registration Statement or Prospectus copies of all documents
proposed to be filed, which documents will be subject to review of such
counsel.
4
(B) Notify
the Holders of Registrable Securities to be sold (which notice shall, pursuant
to clauses (iii) through (v) hereof, be accompanied by an instruction to suspend
the use of the Prospectus until the requisite changes have been made) as
promptly as reasonably possible and confirm such notice in writing no later than
one trading day following the day (i) (X) when the SEC notifies the Company
whether there will be a “review” of the Resale Registration Statement and
whenever the SEC comments in writing on such Resale Registration Statement; (Y)
when a Prospectus or any Prospectus supplement or post-effective amendment to
the Resale Registration Statement is filed and (Z) with respect to the Resale
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the SEC or any other Federal or state
governmental authority for amendments or supplements to the Resale Registration
Statement or Prospectus or for additional information; (iii) of the issuance by
the SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of the Resale Registration Statement covering any
or all of the Registrable Securities or the initiation of any proceedings for
that purpose; (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose; and (v) of the
occurrence of any event or passage of time that makes the financial statements
included in the Resale Registration Statement ineligible for inclusion therein
or any statement made in the Resale Registration Statement or Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires any revisions to the Resale
Registration Statement, Prospectus or other documents so that, in the case of
the Resale Registration Statement or the Prospectus, as the case may be, it will
not contain any untrue statement of a material fact or omit to state any
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; provided that any and
all of such information provided pursuant to clause (v) above shall remain
confidential to each Holder until such information otherwise becomes public,
unless disclosure by a Holder is required by law; provided, further,
notwithstanding each Holder’s agreement to keep such information confidential,
the Holders make no acknowledgement that any such information is material,
non-public information. Without limitation of any remedies to which the Holders
may be entitled under this Agreement, if any of the events described in this
subsection (B) occur, the Company shall use its commercially reasonable best
efforts to respond to and correct the event as promptly as
possible.
(C) Use
its commercially reasonable best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order suspending the effectiveness of
the Resale Registration Statement, or (ii) any suspension of the qualification
(or exemption from qualification) of any of the Registrable Securities for sale
in any jurisdiction, as promptly as possible.
(D) Enter
into such customary agreements (including an underwriting agreement in customary
form) and take such other actions as the Holders of a majority of such
Registrable Securities or the underwriters, if any reasonably request in order
to expedite or facilitate the dispositions of such Registrable
Securities;
(E) In
the case of an underwritten offering, obtain a “cold comfort” letter or letters
from the Company’s independent public accountants in customary form and covering
matters of the type customarily covered by “cold comfort” letters as the Holders
of a majority of such Registrable Securities shall reasonably
request.
(F) In
the case of an underwritten offering, obtain an opinion of counsel for the
Company in customary form and covering matters of the type customarily covered
in opinions of issuer’s counsel as the Holders of a majority of such Registrable
Securities may reasonably request.
5
(G) Make
available for inspection by any selling Holder of such Registrable Securities
covered by such Resale Registration Statement, by any underwriter participating
in any disposition to be effected pursuant to such Resale Registration Statement
and by any attorney, accountant or other agent retained by any such selling
Holder or any such underwriter (collectively, the “Inspectors”), all pertinent
financial and other records, pertinent corporate documents and properties of the
Company as shall be reasonably necessary to enable them to exercise their due
diligence responsibility, and cause all of the Company’s officers, directors and
employees to supply all information reasonably requested by any such selling
Holder or Inspectors in connection with such registration statement. Records
which the Company determines, in good faith, to be confidential and which it
notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of such records is necessary to avoid or
correct a misstatement or omission in such registration statement or (ii) the
release of such records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction. Each selling Holder of Registrable Securities
agrees that information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company unless and until such is made
generally available to the public. Each selling Holder of Registrable Securities
further agrees that it will, upon learning that disclosure of such records is
sought in a court of competent jurisdiction, give notice to the Company to the
extent reasonably practicable and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of the records deemed
confidential.
(H) Furnish
to the Holders and their counsel, without charge, at least one conformed copy of
any Resale Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Holder, and
all exhibits to the extent requested by such Holder (including those previously
furnished or incorporated by reference), as promptly as possible
after the filing of such documents with the SEC.
(I) Promptly
deliver to each Holder, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Holders may reasonably request in connection with
resales by the Holder of Registrable Securities. Subject to the terms of this
Agreement, the Company hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the selling Holders in connection
with the offering and sale of the Registrable Securities covered by such
Prospectus and any amendment or supplement thereto, except after the giving of
any notice pursuant to Section 3(c)(B)(iii) through (v).
(J) Prior
to any resale of Registrable Securities by a Holder, use its commercially
reasonable best efforts to register or qualify or cooperate with the selling
Holders in connection with the registration or qualification (or exemption from
the registration or qualification) of such Registrable Securities for the resale
by the Holder under the securities or Blue Sky laws of such jurisdictions as any
Holder reasonably requests in writing, to keep each registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things reasonably necessary to enable the
disposition in such jurisdictions of the Registrable Securities covered by the
Resale Registration Statement; provided that the Company shall not be required
to qualify generally to do business as a foreign corporation in any jurisdiction
where, but for the requirements of this clause (K), it would not be obligated to
be so qualified or subject the Company to any material tax in any such
jurisdiction where it is not then so subject or file a general consent to
service of process in any such jurisdiction.
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(K) Use
its commercially reasonable best efforts to cause the Registrable Securities
covered by the Resale Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be necessary to enable
the selling Holders to consummate the disposition of such Registrable
Securities.
(L) Use
its commercially reasonable best efforts to cause its transfer agent to prepare
and deliver certificates representing Registrable Securities to a transferee
pursuant to the Resale Registration Statement within three (3) trading days of
delivery to the transfer agent of certificates bearing restrictive legends,
which certificates shall be free of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in such names
as any such Holders may request.
(M) Upon
the occurrence of any event contemplated by Section 3(c)(B), as promptly as
reasonably possible under the circumstances taking into account the Company’s
good faith assessment of any adverse consequences to the Company and its
stockholders of the premature disclosure of such event, prepare a supplement or
amendment, including a post-effective amendment, to the Resale Registration
Statement or a supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, neither the Resale Registration
Statement nor such Prospectus will contain 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, in light of the circumstances under which they
were made, not misleading. If the Company notifies the Holders in accordance
with clauses (iii) through (v) of Section 3(c)(B) above to suspend the use of
any Prospectus until the requisite changes to such Prospectus have been made,
then the Holders shall suspend use of such Prospectus. The Company will use its
commercially reasonable best efforts to ensure that the use of the Prospectus
may be resumed as promptly as is practicable. The Company shall be entitled to
exercise its right under this Section 3(c)(M) to suspend the availability of the
Resale Registration Statement and Prospectus for a period not to exceed 90 days
(which need not be consecutive days) in any 365-day period.
(N) Comply
in all material respects with all applicable rules and regulations of the SEC
and the OTC Bulletin Board (or any successor entity or any national securities
exchange on which the Common Stock is then listed).
(O) The
Company shall (i) as soon as reasonably practicable include in a prospectus
supplement or post-effective amendment such information as is reasonably
required to be included therein relating to any proposed sale and distribution
of Registrable Securities by such Holder, including, without limitation,
information with respect to the number of Registrable Securities being offered
or sold, the purchase price being paid therefor and any other terms of the
offering of the Registrable Securities to be sold in such offering, and (ii) as
soon as reasonably practicable make all required filings of such prospectus
supplement or post-effective amendment after being notified of the matters to be
included in such prospectus supplement or post-effective
amendment.
7
(P) Unless
waived by Holders owning a majority of the outstanding Registrable Securities,
include in such Resale Registration Statement, amendment thereto, or prospectus
or prospectus supplement all material non-public information made available by
the Company to any Holder prior to the filing thereof, except for material
non-public information made available to a Holder to whom knowledge of a member
of the Board of Directors of the Company is attributable.
(d)
Holder hereby covenants with the Company (i) not to make any sale of
the Registrable Securities pursuant to the Resale Registration Statement without
effectively causing the prospectus delivery requirements under the Securities
Act to be satisfied, and (ii) if such Registrable Securities are to be sold by
any method or in any transaction other than as specified in the plan of
distribution disclosed in such Resale Registration Statement, to notify the
Company at least five (5) Business Days prior to the date on which the Holder
first offers to sell any such Registrable Securities.
(e)
Holder acknowledges and agrees that the Registrable Securities
sold pursuant to the Registration Statement described in this Agreement are not
transferable on the books of the Company unless the stock certificate submitted
to the Company’s transfer agent evidencing such Registrable Securities is
accompanied, if requested by the transfer agent, by a certificate reasonably
satisfactory to the transfer agent to the effect that (i) the Registrable
Securities have been sold in accordance with such Resale Registration Statement
and (ii) the requirement of delivering a current Prospectus has been
satisfied.
(f)
Holder shall not take any action with respect to
any distribution deemed to be made pursuant to such Resale Registration
Statement, which would constitute a violation of Regulation M under the Exchange
Act, or any other applicable rule, regulation or law.
Section
4. Registration
Expenses. All
expenses incident to the Company’s performance of or compliance with this
Agreement will be borne by the Company, regardless of whether the Resale
Registration Statement becomes effective, including, without limitation: (i) all
registration and filing fees; (ii) all reasonable fees and expenses of
compliance with federal securities and state blue sky or securities laws; (iii)
all reasonable expenses of printing (including printing Prospectuses), messenger
and delivery services and telephone; (iv) all reasonable fees and disbursements
of counsel for the Company; (v) all reasonable fees and disbursements of one
counsel selected by the Holders holding a majority of the Registrable
Securities, (vi) all applications and filing fees in connection with
qualification of the Registrable Securities on the OTC Bulletin Board or listing
on a national securities exchange; (vii) Securities Act liability insurance, if
the Company so desires such insurance, (viii) all reasonable fees and
disbursements of independent certified public accountants of the Company
(including the expenses of any special audit and comfort letters required by or
incident to such performance) and (ix) all reasonable fees and expenses of an
underwriter or underwriters in connection with an Underwritten Offering of
Registrable Securities. Notwithstanding anything in this Section 4 to
the contrary, the Company shall not be required to pay any underwriting
discounts, commissions or transfer taxes, if any, relating to the sale or
disposition of any Holder’s Restricted Securities.
The
Company will, in any event, bear its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expenses of any annual audit and the fees and
expenses of any person, including special experts, retained by the
Company.
8
Section
5. Indemnification.
(a) Indemnification by the
Company. To the fullest extent permitted by law, the Company
shall, notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder of the Registrable Securities (including, its officers,
directors, members, partners, agents, brokers, investment advisors and employees
of each of them) and each person controlling such Holder within the meaning of
Section 15 of the Securities Act (including the officers, directors, members,
partners, agent and employees of each such controlling person), with respect to
which any registration has been effected pursuant to this Agreement, against all
claims, losses, damages, liabilities, judgments, fines, penalties, charges,
costs (including, without limitation, reasonable attorneys’ fees and
disbursements) and expenses (collectively, “Losses”), as incurred, including any
Losses incurred in settlement of any litigation, commenced or threatened
(subject to Subsection 5(c) below), arising out of or based on any untrue or
alleged untrue statement of a material fact contained in the Resale Registration
Statement or Prospectus, or any amendment or supplement thereto, incident to any
such registration, 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, in light of the circumstances in which they
were made; provided, that the
Company shall not be liable in any such case to the extent that any untrue or
alleged untrue statement or omission or alleged omission is made in reliance
upon and in conformity with information furnished to the Company by or on behalf
of any Holder and stated to be specifically for use in preparation of such
Resale Registration Statement or Prospectus, or any amendment or supplement
thereto; provided, further, that the
Company shall not be liable in any such case where the Losses arise out of, or
are related to, the failure of any Holder to comply with the covenants and
agreements contained in this Agreement. The Company will also indemnify
underwriters participating in the distribution, their officers, directors,
employees, partners and agents, and each Person who controls such underwriters
(within the meaning of the Securities Act), to the same extent as provided above
with respect to the indemnification of the Holders of Registrable Securities, if
so requested. The Company shall notify the Holders promptly of the institution,
threat or assertion of any legal proceeding arising from or in connection with
the transactions contemplated by this Agreement of which the Company is
aware.
9
(b) Indemnification by Holders
of Registrable Securities. In connection with the Resale
Registration Statement or Prospectus, or any amendments or supplements thereto,
each Holder will furnish to the Company in writing such information and
affidavits regarding the Holder or such Holder’s ownership of the Company’s
securities as the Company reasonably requests for use in connection with such
Resale Registration Statement or Prospectus or any amendments or supplements
thereto. Each Holder will severally and not jointly indemnify the Company, each
of its directors and officers, each underwriter of an underwritten offering of
the Registrable Securities in which such Holder participates, each other Holder
whose Registrable Securities are included in such Resale Registration Statement
and each person who controls the Company within the meaning of Section 15 of the
Securities Act (collectively, “Holder Indemnitees”), against all Losses, as
incurred, including any Losses incurred in settlement of any litigation,
commenced or threatened (subject to Subsection 5(c) below), arising out of, or
based on, any untrue or alleged untrue statement of a material fact contained in
such Resale Registration Statement or Prospectus, or any amendment or supplement
thereof, incident to any such registration, 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, in light of the
circumstances in which they were made, in each case to the extent, but only to
the extent, that such untrue or alleged untrue statement or omission or alleged
omission is made in reliance upon and in conformity with written information
and/or affidavits furnished to the Company by or on behalf of such Holder; provided, that the
indemnity shall not apply to the extent that such Losses result from the fact
that a current copy of the Prospectus was not made available to the Holders and
such current copy of the Prospectus would have cured the defect giving rise to
such Losses. In no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities covered by such Resale
Registration Statement giving rise to such indemnification obligation. The
Holder Indemnitees shall be entitled to receive indemnities from underwriters
participating in the distribution, to the same extent as provided above, with
respect to information furnished in writing by such underwriters specifically
for inclusion in any Registration Statement, Prospectus or any amendment or
supplement thereto.
(c) Conduct of Indemnification
Proceedings. Any Person entitled to indemnification hereunder
will (i) give prompt notice to the indemnifying party of any claim with respect
to which it seeks indemnification and (ii) permit such indemnifying party to
assume the defense of such claim with counsel of such indemnifying party’s
choice; provided, however, that any
Person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (A) the indemnifying party shall have failed to assume the defense of
such claim and employ counsel reasonably satisfactory to the indemnified party
in a timely manner or (B) a written opinion of counsel reasonably acceptable to
the indemnifying party, asserts that a conflict of interest exists between such
person and the indemnifying party with respect to such claims (in which case, if
the indemnified Person notifies the indemnifying party in writing that such
Person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such Person). The indemnifying party will not be subject
to any liability for any settlement made without its consent. No indemnified
party will be required to consent to entry of any judgment or enter into any
settlement unless (x) such judgment or settlement includes as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or litigation, and (y)
the only consequence to the indemnified party under such judgment or settlement
is the creation of an obligation to pay money damages, all of which are being
satisfied by the indemnifying party. An indemnifying party who is not entitled
to, or elects not to, assume the defense of the claim will not be obligated to
pay the fees and expenses of more than one counsel for all parties indemnified
by such indemnifying party with respect to such claim.
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(d) Contribution. If
for any reason the indemnification provided for in Subsection 5(a) or Subsection
5(b) is unavailable to an indemnified party or insufficient to hold it harmless
as contemplated by Subsection 5(a) and Subsection 5(b), then the indemnifying
party shall contribute to the amount paid or payable by the indemnified party as
a result of such Losses in such proportion as is appropriate to reflect not only
the relative benefits received by the indemnifying party and the indemnified
party, but also the relative fault of the indemnifying party and the indemnified
party, as well as any other relevant equitable considerations. No Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentations. Notwithstanding the provisions of
this Section 5(d), no Holder shall be required to contribute, in the aggregate,
any amount in excess of the amount by which the proceeds actually received by
such Holder from the sale of the Registrable Securities subject to the
proceeding exceeds the amount of any damages that such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.
Section
6. Participation in
Underwritten Registrations.
(a) One
or more Holders may elect to retain an underwriter to conduct an Underwritten
Offering of all or a portion of the Registrable Securities held by such Holders,
which underwriter shall be selected by the Holders holding a majority of the
Registrable Securities requested for inclusion in such Underwritten Offering. In
the event any Holders elect to conduct an Underwritten Offering, such Holders
shall promptly give notice to each other Holder and each such other Holder shall
be entitled to participate in such Underwritten Offering subject to Subsection
6(b) below. Notwithstanding any other provision of this Agreement, if the
underwriter determines in good faith that marketing factors require a limitation
of the number of Registrable Securities to be underwritten, the number of
Registrable Securities that may be included in such Underwritten Offering shall
be allocated among the participating Holders on a pro rata basis based on the
total number of Registrable Securities proposed to be sold in such Underwritten
Offering by such Holders.
(b) No
Person may participate in any Underwritten Offering hereunder unless such Person
(i) agrees to sell such Person’s Registrable Securities on the basis provided in
any underwriting arrangements approved by the Holders of a majority of the
Registrable Securities included in such Underwritten Offering and (ii) completes
and executes an underwriting agreement in customary form and other documents
required under the terms of such underwriting agreement. Nothing in
this Section 6 shall be construed to create any additional rights regarding the
registration of Registrable Securities in any Person otherwise than as set forth
herein.
(c) Nothing
in this Section 6 shall obligate the Company to pay any underwriting discounts
or commissions in connection with any underwritten offering of Registrable
Securities.
Section
7. Rule
144. The
Company agrees with each Holder, for so long as any Restricted Securities remain
outstanding and during any period in which the Company (i) is not subject to
Section 13 or 15(d) of the Exchange Act, to make available, upon request of such
Holder in connection with any sale thereof and any prospective purchaser of such
Restricted Securities designated by the Holder, the information required by Rule
144A(d)(4) under the Securities Act in order to permit resales of such
Restricted Securities pursuant to Rule 144A, and (ii) is subject to Section 13
or 15(d) of the Exchange Act, to use reasonable efforts to make all filings
required thereby in a timely manner in order to permit resales of such
Restricted Securities pursuant to Rule 144.
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Section
8. Legend. Each
Holder consents to the placing of any legend required by the Securities Act as
well as the following legend on all certificates representing shares of
Registrable Securities and on any certificate issued at any time in exchange or
substitution for any certificate bearing such legend, for so long as the
securities represented thereby are Registrable Securities:
THIS
CERTIFICATE IS ISSUED SUBJECT TO THE PROVISIONS OF A REGISTRATION RIGHTS
AGREEMENT, AND ANY TRANSFEREE OF THIS CERTIFICATE OR OF THE SHARES REPRESENTED
BY IT SHALL BE BOUND BY THE PROVISIONS OF SAID AGREEMENT, A COPY OF WHICH IS ON
FILE WITH, AND AVAILABLE FROM, THE SECRETARY OF NEPHROS, INC.
Section
9. Delay Periods; Suspension of
Sales. Each
Holder shall suspend, upon request of the Company pursuant to Section 3(c)(M),
any disposition of Registrable Securities pursuant to the Resale Registration
Statement and Prospectus, or any amendments or supplements thereto, as
contemplated herein during (i) any period not to exceed two 30-day periods
within any one 12-month period the Company requires in connection with a primary
underwritten offering of equity securities and (ii) any period, not to exceed
one 45-day period per circumstance or development, when the Company determines
in good faith that offers and sales pursuant thereto should not be made by
reason of the presence of material undisclosed circumstances or developments
with respect to which the disclosure that would be required in such a prospectus
is premature, would have an adverse effect on the Company or is otherwise
inadvisable; provided, however, the
aggregate number of days that such suspensions and any suspensions under Section
3(c)(M) may apply during any 365-day period is 90 days. In the event of a delay
period or suspension, the Company will use its commercially reasonable best
efforts to ensure that the use of the Prospectus may be resumed as promptly as
is practicable. Nothing in this Section 9 shall operate to extend the
Effectiveness Date.
Section
10. Miscellaneous.
(a) Amendments and
Waivers. The provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to or departures from the provisions
hereof may not be given, without the written consent of the Company and the
Holders of a majority of the outstanding Registrable Securities; provided, however, that no such
amendment, modification, supplement, waiver, consent or departure shall
distinguish between Holders or groups of Holders unless any Holder adversely
affected thereby shall have consented thereto in
writing. Notwithstanding the foregoing, no amendment, modification,
supplement, waiver or consent will be valid and binding unless it is in writing,
signed by the requisite Persons, and expressly refers to this Agreement and the
provisions intended to be amended, modified, supplemented, waived or consented
to.
(b) Notices. Except where
expressly stated otherwise herein, all notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail (registered, return receipt requested), or air courier
guaranteeing overnight delivery:
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if to any
Holder, at the address for such Holder set forth on the records of the Company;
and
if to the
Company, Nephros, Inc., 41 Grand Avenue, River Edge, New Jersey 0766,
Attention: Gerald J. Kochanski
With a
copy to: Wyrick Robbins Yates & Ponton LLP, 4101 Lake Boone Trail, Suite
300, Raleigh, North Carolina 27607, Attention: Alexander M.
Donaldson
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; and on the next Business Day,
if timely delivered to an air courier guaranteeing overnight
delivery.
The
address or person or entity to whose attention any notice or communication shall
be given may be changed by notice to the other parties in accordance with the
provisions of this Section 10(b).
(c) Successors and Assigns;
Third Party Beneficiaries. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties and shall
inure to the benefit of each Holder, and it is not the intention of the parties
to confer upon any other person or entity any rights or remedies. The Company
may not assign its rights or obligations hereunder without the prior written
consent of the Holders of a majority of the outstanding Registrable Securities.
Each Holder may assign its respective rights hereunder to any Person to whom
such Holder transfers Registrable Securities, provided such transfer is in
accordance with all applicable securities laws. If any transferee of a Holder
shall acquire Registrable Securities in any manner, whether by operation of law
or otherwise, such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Securities
such person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement, including the
restrictions on resale set forth in this Agreement and such person shall be
entitled to receive the benefits hereof.
(d) No Inconsistent
Agreements. The Company will not hereafter enter into any agreement with
respect to its securities which is inconsistent with, adversely effects or
violates the rights granted to the Holders in this Agreement.
(e) Delays or Omissions.
It is agreed that no delay or omission to exercise any right, power, or remedy
accruing to any Holder, upon any breach, default or noncompliance of the Company
under this Agreement shall impair any such right, power, or remedy, nor shall it
be construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of any similar breach, default or noncompliance
thereafter occurring. All remedies, either under this Agreement, by law, or
otherwise afforded to Holders, shall be cumulative and not
alternative.
(f) Counterparts. This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.
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(g) Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF THE CONFLICT OF LAWS
THEREOF.
(i) Severability. In the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
(j) JURISDICTION; FORUM.
EACH PARTY HERETO CONSENTS AND SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY
STATE COURT SITTING IN THE COUNTY OF NEW YORK OR FEDERAL COURT SITTING IN THE
SOUTHERN DISTRICT OF THE STATE OF NEW YORK IN CONNECTION WITH ANY DISPUTE
ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND AGREES THAT ALL SUITS, ACTIONS
AND PROCEEDINGS BROUGHT BY SUCH PARTY HEREUNDER SHALL BE BROUGHT ONLY IN SUCH
JURISDICTIONS. EACH PARTY HERETO WAIVES ANY OBJECTION TO THE LAYING OF VENUE IN
SUCH COURTS AND ANY CLAIM THAT ANY SUCH ACTION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT PERMITTED BY LAW, ANY JUDGMENT IN RESPECT OF A
DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY BE ENFORCED IN ANY
OTHER JURISDICTION WITHIN OR OUTSIDE THE UNITED STATES BY SUIT ON THE JUDGMENT,
A CERTIFIED COPY OF SUCH JUDGMENT BEING CONCLUSIVE EVIDENCE OF THE FACT AND
AMOUNT OF SUCH JUDGMENT. EACH PARTY HERETO AGREES THAT PERSONAL SERVICE OF
PROCESS MAY BE EFFECTED BY ANY OF THE MEANS SPECIFIED IN SECTION 10(B),
ADDRESSED TO SUCH PARTY. THE FOREGOING SHALL NOT LIMIT THE RIGHTS OF ANY PARTY
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
(k) WAIVER OF JURY
TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT HE OR IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10(K).
(l) Entire Agreement.
This Agreement is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto with respect to registration rights
granted with respect to Registrable Securities. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted with respect to the
Registrable Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject
matter.
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(m) Independent Nature of
Holders’ Obligations and Rights. The obligations of each Holder hereunder
are several and not joint with the obligations of any other Holder hereunder,
and no Holder shall be responsible in any way for the performance of the
obligations of any other Holder hereunder. Nothing contained herein or in any
other agreement or document delivered at any closing, and no action taken by any
Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as
a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Holders are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Holder shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Holder to be joined as an additional party in any
proceeding for such purpose.
(n) Attorneys’ Fees. In
the event of any litigation or other proceeding concerning this Agreement or the
transactions contemplated hereby, including any such litigation or proceeding
with respect to the enforcement of this Agreement against any defaulting party,
the prevailing party in such litigation or proceeding shall be entitled to
reimbursement from the party opposing such prevailing party for all attorneys’
fees and costs incurred by such prevailing party in such litigation or
proceeding, which shall include, without limitation, all fees, costs and
expenses of appeals.
[SIGNATURE
PAGE FOLLOWS IMMEDIATELY]
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above.
NEPHROS,
INC.
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By:
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Name:
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Title:
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INITIAL HOLDER: LAMBDA
INVESTORS LLC
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By:
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Name: Arthur Amron
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Title: Vice President
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Address
for Notices:
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c/o
Wexford Capital LP
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411
West Putnam Avenue (Street Address)
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Greenwich,
CT 06830 (City) (State/Country) (Zip Code)
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Attention:
Arthur
Amron
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EXHIBIT
A
Form
of Counterpart Signature Page
IN
WITNESS WHEREOF, the undersigned has caused this counterpart to the Registration
Rights Agreement among Nephros, Inc. and the Holders (as defined therein), dated
as of ___________, 2010, as amended from time to time, to be duly executed and
delivered as of _______ __, ____.
[__________________],
as an additional Holder
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By:
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Name:
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Title:
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Notice
Address:
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Attention:
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Tel:(___)
___-_____
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Fax:(___)
___-_____
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Accepted
and agreed to as of the __ day of _________, ____:
NEPHROS,
INC.
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By:
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Name:
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Title:
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