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Exhibit 4.4
EXECUTION COPY
ATHERSYS, INC.
REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made
as of October 21, 1999 by and among ATHERSYS, INC., a Delaware corporation (the
"COMPANY"), and ELAN INTERNATIONAL SERVICES, LTD., a Bermuda exempt limited
liability company ("EIS").
R E C I T A L S:
A. Pursuant to a Securities Purchase Agreement dated as of the
date hereof by and between the Company and EIS (the "PURCHASE AGREEMENT"), EIS
has acquired, or will acquire in the future, certain shares of common stock of
the Company (the "COMMON STOCK"), Class E Convertible Exchangeable Preferred
Stock of the Company (the "CLASS E PREFERRED STOCK"), and a convertible
promissory note (the "NOTE"), which Class E Preferred Stock and Note are
convertible into shares of Common Stock.
B. The execution of the Purchase Agreement has occurred on the
date hereof and it is a condition to the closing of the transactions
contemplated thereby that the parties execute and deliver this Agreement.
C. The parties desire to set forth herein their agreement on
the terms and subject to the conditions set forth herein related to the granting
of certain registration rights to the Holders (as defined below) relating to the
Common Stock held by such Holders and the Common Stock underlying the Class E
Preferred Stock and the Note.
A G R E E M E N T:
The parties hereto agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the
following terms shall have the following respective meanings:
"COMMISSION" shall mean the U.S. Securities and Exchange
Commission.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission thereunder, all as
the same shall be in effect from time to time.
"HOLDERS" or "HOLDERS OF REGISTRABLE SECURITIES" shall mean
EIS and any Person who shall have acquired Registrable Securities from EIS as
permitted herein, either individually or jointly, as the case may be, in a
transaction pursuant to which registration rights are transferred pursuant to
Section 12 hereof.
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"PERSON" shall mean an individual, a partnership, a company,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental or quasi-governmental entity, or
any department, agency or political subdivision thereof.
"REGISTRABLE SECURITIES" means (i) any shares of Common Stock
purchased pursuant to the Purchase Agreement, any shares of Common Stock issued
or issuable upon conversion of shares of Class E Preferred Stock (or issued as
dividends thereon) or the Note, and (ii) any Common Stock issued or issuable in
respect of the securities referred to in clause (i) above upon any stock split,
stock dividend, recapitalization or similar event until, in the case of any such
security, it is effectively registered under the Securities Act and disposed of
in accordance with the registration statement covering it; excluding in all
cases, however, any Registrable Securities that may be sold under Rule 144
promulgated under the Securities Act, as such rule may be amended from time to
time, or any similar rule or regulation hereafter adopted by the Commission,
without being subject to the volume limitations under Rule 144, and Registrable
Securities sold by a Person in a transaction (including a transaction pursuant
to a registration statement under this Agreement and a transaction pursuant to
Rule 144 promulgated under the Securities Act) in which registration rights are
not transferred pursuant to Section 12 hereof.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act.
"REGISTRATION EXPENSES" shall mean all expenses, other than
Selling Expenses, incurred by the Company in complying with Sections 3 or 4
hereof, including without limitation, all registration, qualification and filing
fees, exchange listing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses, and the
expense of any special audits incident to or required by any such registration.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SELLING EXPENSES" shall mean all underwriting discounts,
selling commissions and stock transfer taxes and the costs, fees and expenses of
any accountants or other experts, including legal counsel, retained by the
Holders.
"UNDERWRITER(S)" means any one or more investment banking or
brokerage firms to or through whom the Company may offer and sell Common Stock
pursuant to a transaction requiring the filing of a registration statement under
the Securities Act, including one or more of such firms who manage such public
offering through such Underwriters and who are referred to herein as "MANAGING
UNDERWRITER(S)."
2. HOLDERS OF REGISTRABLE SECURITIES. Whenever a number or
percentage of Registrable Securities is to be determined pursuant to this
Agreement, each then-outstanding Preferred Share that is convertible into Common
Stock will be deemed to be equal to the number of shares of Common Stock for
which such Preferred Share is then so convertible.
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3. DEMAND REGISTRATION.
(a) REQUESTS FOR REGISTRATION. In the event that (i) the
Company receives from the Holders a written request that the Company file a
registration statement on Form S-3 (or any successor form to Form S-3), or any
similar short-term registration statement, for a public offering of Registrable
Securities (a "DEMAND REGISTRATION"), the reasonably anticipated aggregate price
to the public of which, net of underwriting discounts and commissions, would be
at least U.S. $1,000,000 and (ii) the Company is a registrant eligible to use
Form S-3 to register the Registrable Securities for such an offering, within 30
days after receipt of any such request, the Company will give written notice of
such requested registration to all other Holders of Registrable Securities. The
Company shall include such other Holders' Registrable Securities in such
offering if they have responded affirmatively within 30 days after the receipt
of the Company's notice. The number of Demand Registrations pursuant to this
Section 3(a) shall not exceed one, PROVIDED, HOWEVER, that a registration will
not count as a permitted Demand Registration until it has become effective,
unless such Demand Registration has not become effective due solely to the fault
of the Holders requesting such registration, including a request by such Holders
that such registration be withdrawn.
(b) PRIORITY ON DEMAND REGISTRATION. If a Demand Registration
is an underwritten offering and the Managing Underwriters advise the Company
that in their opinion the number of Registrable Securities requested to be
included in such offering exceeds the number of Registrable Securities which can
be sold in such offering without adversely affecting the marketability of the
offering, the Company will include in such registration such number of
Registrable Securities allocated pro rata among the Holders thereof based upon
the number of Registrable Securities owned by each such Holder. No securities
other than Registrable Securities hereunder shall be included in such Demand
Registration without the prior written consent of Holders who collectively hold
Registrable Securities representing at least 50% of the Registrable Securities
then outstanding; PROVIDED, HOWEVER, this provision in no way limits the rights
of the Company to amend the Existing Registration Rights Agreement (as defined
in Section 4(b)(ii)) to add additional investors or stockholders as parties
thereto.
(c) RESTRICTIONS ON DEMAND REGISTRATION. The Company may
postpone the filing or the effectiveness of a registration statement for a
Demand Registration if the Company determines in good faith that such Demand
Registration (i) would reasonably be expected to have a material adverse effect
on (x) any proposal or plan by the Company to engage in any financing,
acquisition or disposition of assets (other than in the ordinary course of
business) or (y) any merger, consolidation, tender offer or similar transaction
or (ii) would require disclosure of any information that the board of directors
of the Company determines in good faith the disclosure of which would be
detrimental to the Company; PROVIDED, HOWEVER, that in such event, the Holders
initially requesting such Demand Registration will be entitled to withdraw such
request and, if such request is withdrawn, such Demand Registration will not
count as a permitted Demand Registration hereunder and the Company will pay any
Registration Expenses in connection with such registration.
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(d) OTHER REGISTRATION RIGHTS. Except as provided in this
Agreement, so long as any Holder owns any Registrable Securities, the Company
will not grant to any Persons the right to request the Company to register any
equity securities of the Company, or any securities convertible or exchangeable
into or exercisable for such securities, which conflicts with the rights granted
to the Holders hereunder, without the prior written consent of the Holders of at
least 50% of the Registrable Securities.
4. PIGGYBACK REGISTRATIONS. (a) RIGHT TO PIGGYBACK. If at any
time that the Company shall propose to register Common Stock under the
Securities Act (other than in a registration on Form S-3 relating to sales of
securities to participants in a Company dividend reinvestment plan, S-4 or S-8
or any successor form or in connection with an acquisition or exchange offer or
an offering of securities solely to the existing shareholders or employees of
the Company), the Company will (i) give prompt written notice to all Holders of
Registrable Securities of its intention to effect such a registration and, (ii)
subject to Section 4(b) and the other terms of this Agreement, shall include in
such registration all Registrable Securities that are permitted under applicable
securities laws to be included in the form of registration statement selected by
the Company and with respect to which the Company has received written requests
for inclusion therein by the Holders within 30 days after the receipt of the
Company's notice (each, a "PIGGYBACK REGISTRATION"). The Holders will be
permitted to withdraw all or part of the Registrable Securities from a Piggyback
Registration at any time prior to the effective date of such Piggyback
Registration.
(b) PRIORITY ON PIGGYBACK REGISTRATIONS. If a Piggyback
Registration is an underwritten registration on behalf of the Company, and the
Managing Underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering without adversely affecting the
marketability of the offering, the Company shall include in such registration,
only as may be permitted in the reasonable business judgment of the Managing
Underwriters for such registration:
(i) first, up to that number of securities the Company
proposes to sell;
(ii) second, up to that number of Registrable Securities
requested to be included in such registration by the Holders and that number of
securities requested to be included in such registration by any other Person,
pro rata among the Holders of such Registrable Securities and such other
Persons, on the basis of the number of shares owned by each of such Holders;
PROVIDED, HOWEVER, in the event of a conflict between the provisions of (i) the
Registration Rights Agreement dated March 19, 1996, as amended October 30, 1998,
by and among the Company, certain stockholders of the Company as described
therein (the "Existing Registration Rights Agreement") and the rights of any
holders of registrable securities thereunder, and (ii) this Agreement, the terms
and the rights of the holders of registrable securities contained in the
Existing Registration Rights Agreement will prevail.
(iii) third, up to that number of other securities requested
to be included in such registration.
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(c) RIGHT TO TERMINATE REGISTRATION. If, at any time after
giving written notice of its intention to register any of its securities as set
forth in Section 4(a) and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register such securities, the Company may, at
its election, give written notice of such determination to each Holder of
Registrable Securities that requested inclusion in such registration in
accordance with Section 4(a) and thereupon be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in connection therewith
as provided herein).
5. SELECTION OF UNDERWRITERS. The Company, in its sole
discretion, shall select the Underwriter(s) and Managing Underwriter(s) to
administer an offering pursuant to any Demand Registration or Piggyback
Registration subject to the consent of EIS, which shall not be unreasonably
withheld, delayed or conditioned. The Holders shall take all reasonable steps to
cooperate with the Underwriter(s) so selected to conduct the offering in a
manner customary for such underwritten offering, including without limitation,
entering into an underwriting agreement in customary form and substance with
such Underwriter(s).
6. EXPENSES OF REGISTRATION. All Registration Expenses
incurred in connection with the registration pursuant to Section 3 shall be
borne by the Company. All Registration Expenses relating to securities
registered on behalf of Holders of Registrable Securities incurred in connection
with all registrations pursuant to Section 4 shall be borne by such Holders. All
Selling Expenses relating to securities registered on behalf of Holders of
Registrable Securities incurred in connection with all registrations pursuant to
Section 3 or Section 4 shall be borne by such Holders.
7. HOLDBACK AGREEMENTS.
(a) The Company will (i) not effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, for its own account during the
seven days prior to and during the 90-day period beginning on the effective date
of any underwritten Demand Registration (except (A) as part of such underwritten
registration, (B) pursuant to registration statements on Form S-4 or Form S-8 or
any successor form, (C) pursuant to a registration statement then in effect or
(D) as required under any existing contractual obligation of the Company),
unless the underwriters managing the registered public offering otherwise agree,
and (ii) use reasonable efforts to cause each holder of at least 5% (on a
fully-diluted basis) of its outstanding Common Stock, or any securities
convertible into or exchangeable or exercisable for Common Stock, purchased from
the Company at any time after the date of this Agreement (other than in a
registered public offering) to agree not to effect any public sale or
distribution (including sales pursuant to Rule 144) of any such securities
during such periods (except as part of such underwritten registration, if
otherwise permitted), unless the underwriters managing the registered public
offering otherwise agree.
(b) Each Holder, in the event of a public offering of Common
Stock under a registration statement on Form S-1, S-3 or S-4, will not effect
any offer, sale, distribution or
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transfer, including a sale pursuant to Rule 144 (or any similar provision then
effect) under the Securities Act (except as part of such registration),
beginning on the date of receipt of a written notice from the Company setting
forth its intention to effect such registration and ending on the earlier of (i)
180 days from the date of receipt of such written notice or (ii) 180 days from
the effective date of such Registration Statement; PROVIDED, that the directors
of the Company and holders of securities representing at least 5% of the Common
Stock consent to the 180-day period.
8. REGISTRATION PROCEDURES. Whenever the Company is under the
obligation to register Registrable Securities hereunder, the Company will use
all reasonable efforts to effect the registration and the sale of such
Registrable Securities, and pursuant thereto the Company will as expeditiously
as possible use its reasonable efforts to:
(a) subject to Sections 3(a) and 4(a) hereof, prepare and file
with the Commission a registration statement on any form for which the Company
qualifies with respect to such Registrable Securities and use all reasonable
efforts to cause such registration statement to become effective (provided that
before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company will (i) furnish to the counsel selected by the
Holders copies of all such documents proposed to be filed, and will provide such
counsel a reasonable opportunity to review and comment on such documents which
documents will be subject to the review of such counsel, and (ii) notify each
Holder of Registrable Securities covered by such registration of any stop order
issued or threatened by the Commission);
(b) subject to Sections 3(c) and 4(c) hereof, prepare and file
with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be reasonably
necessary to keep such registration statement effective for, in the case of a
Demand Registration, a period equal to the shorter of (i) 120 days and (ii) the
time by which all securities covered by such registration statement have been
sold, and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement during such
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use all reasonable efforts to register or qualify such
Registrable Securities under the securities or blue sky laws of such
jurisdictions as any seller reasonably requests in writing and do any and all
other acts and things which may be reasonably necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller (provided that the Company will not
be required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify
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but for this Section 8(d), (ii) subject itself to taxation in any jurisdiction,
or (iii) take any action that would subject it to general service of process in
any such jurisdiction);
(e) notify each seller of such Registrable Securities, 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 contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company will prepare
a supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading; PROVIDED, HOWEVER, that the Company
shall not be required to amend the registration statement or supplement the
Prospectus for a period of up to six months if the board of directors determines
in good faith that to do so would reasonably be expected to have a material
adverse effect on any proposal or plan by the Company to engage in any
financing, acquisition or disposition of assets (other than in the ordinary
course of business) or any merger, consolidation, tender offer or similar
transaction or would require the disclosure of any information that the board of
directors determines in good faith the disclosure of which would be detrimental
to the Company, it being understood that the period for which the Company is
obligated to keep the Registration Statement effective shall be extended for a
number of days equal to the number of days the Company delays amendments or
supplements pursuant to this provision. Upon receipt of any notice pursuant to
this Section 8(e), the Holders shall suspend all offers and sales of securities
of the Company and all use of any prospectus until advised by the Company that
offers and sales may resume, and shall keep confidential the fact and content of
any notice given by the Company pursuant to this Section 8(e);
(f) cause all such Registrable Securities to be listed on each
securities exchange, if any, on which similar securities issued by the Company
are then listed;
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the Holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities;
(i) make available for inspection by a representative of the
Holders of Registrable Securities included in the registration statement, any
underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
seller or underwriter, all pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
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(j) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least 12 months beginning with the first day of the
Company's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Common Stock included in such registration statement for sale in any
jurisdiction, use all reasonable efforts promptly to obtain the withdrawal of
such order; and
(l) if the registration is an underwritten offering, use all
reasonable efforts to obtain a so-called "cold comfort" letter from the
Company's independent public accountants in customary form and covering such
matters of the type customarily covered by cold comfort letters.
9. OBLIGATIONS OF HOLDERS. (a) Whenever the Holders of
Registrable Securities sell any Registrable Securities pursuant to a Demand
Registration, such Holders shall be obligated to comply with the applicable
provisions of the Securities Act, including the prospectus delivery requirements
thereunder, and any applicable state securities or blue sky laws.
(b) The Company may require each seller of Registrable
Securities as to which any Demand Registration or Piggyback Registration is
being effected to furnish to the Company such information regarding the
distribution of such Registrable Securities as the Company may, from time to
time, reasonably request in writing and shall promptly notify the Company of any
changes in such information the Company may exclude from such registration the
Registrable Securities of any seller who unreasonably fails to furnish such
information within a reasonable time after receiving such request.
(c) Each holder of Registrable Securities will be deemed to
have agreed by virtue of its acquisition of such Registrable Securities that,
upon receipt of any notice described in Section 8(e), such holder will forthwith
discontinue disposition of such Registrable Securities covered by such
registration statement or prospectus until such holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 8(e) hereof,
or until it is advised in writing by the Company that the use of the applicable
prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such prospectus.
10. INDEMNIFICATION. (a) In connection with any registration
statement for a Demand Registration in which a Holder of Registrable Securities
registered pursuant to this Agreement is participating, the Company agrees to
indemnify, to the fullest extent permitted by applicable law, each such Holder
of Registrable Securities, its officers and directors and each
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Person who controls such Holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities, expenses or any amounts paid
in settlement of any litigation, investigation or proceeding commenced or
threatened to which each such indemnified party may become subject under the
Securities Act (collectively, "CLAIMS") insofar as such Claim arose out of (i)
any untrue or alleged untrue statement of material fact contained, on the
effective date thereof, in any such registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or (ii)
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,
except insofar as the same are caused by or contained in any information
furnished in writing to the Company by such Holder expressly for use therein or
by such Holder's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished such Holder with a sufficient number of copies of the same. In
connection with an underwritten offering, the Company will indemnify the
underwriters, their officers and directors and each Person who controls the
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.
(b) In connection with any registration statements for a
Demand Registration in which a Holder of Registrable Securities is
participating, each Holder will, to the fullest extent permitted by applicable
law, indemnify the Company, its directors and officers and each Person who
controls the Company (within the meaning of the Securities Act) against any and
all Claims to which each such indemnified party may become subject under the
Securities Act insofar as such Claim arose out of (i) any untrue or alleged
untrue statement of material fact contained, on the effective date thereof, in
any such registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or (ii) 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; provided that with respect to a
Claim arising pursuant to clause (i) or (ii) above, the material misstatement or
omission is contained in the information such Seller provided to the Company
pursuant to Section 9(b).
(c) Any Person entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification (but the failure to provide such notice shall
not release the indemnifying party of its obligation under paragraphs (a) and
(b), unless and then only to the extent that, the indemnifying party has been
prejudiced by such failure to provide such notice) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. An indemnifying party who is
not entitled to, or elects not to, assume the defense of a 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, unless in the
reasonable judgment of any indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties with
respect to such claim.
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(d) The indemnifying party shall not be liable to indemnify an
indemnified party for any settlement, or consent to judgment of any such action
effected without the indemnifying party's consent (but such consent will not be
unreasonably withheld, delayed or conditioned). Furthermore, the indemnifying
party shall not, except with the prior written approval 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 each indemnified party of a release from all liability in respect
of such claim or litigation without any payment or consideration provided by
each such indemnified party.
(e) If the indemnification provided for in this Section 10 is
unavailable to an indemnified party under clauses (a) and (b) above in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect not only the relative benefits received by the Company
(if any), the Underwriters, the sellers of Registrable Securities and any other
sellers participating in the registration statement from the sale of shares
pursuant to the registered offering of securities for which indemnity is sought
but also the relative fault of the Company, the Underwriters, the sellers of
Registrable Securities and any other sellers participating in the registration
statement in connection with the statement or omission which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company (if any), the
Underwriters, the sellers of Registrable Securities and any other sellers
participating in the registration statement shall be deemed to be based on the
relative relationship of the total net proceeds from the offering (before
deducting expenses) to the Company (if any), the total underwriting commissions
and fees from the offering (before deducting expenses) to the Underwriters and
the total net proceeds from the offering (before deducting expenses) to the
sellers of Registrable Securities and any other sellers participating in the
registration statement. The relative fault of the Company, the Underwriters, the
sellers of Registrable Securities and any other sellers participating in the
registration statement shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the sellers of Registrable Securities and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(f) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling person
of such indemnified party and will survive the transfer of the Registrable
Securities.
11. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder may
participate in any registration hereunder which is underwritten unless such
Holder (a) agrees to sell such Holder's securities on the basis provided in any
underwriting arrangements approved by the Holder or Holders entitled hereunder
to approve such arrangements, (b) as expeditiously as possible notifies the
Company of the occurrence of any event as a result of which any prospectus
contains an untrue statement of material fact or omits to state a material fact
required to be stated
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therein or necessary to make the statements therein not misleading and (c)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
12. TRANSFER OF REGISTRATION RIGHTS. The rights granted to any
Holder under this Agreement may be assigned to any permitted transferee of
Registrable Securities, in connection with any transfer or assignment of
Registrable Securities by a Holder; PROVIDED, HOWEVER, that: (a) such transfer
is otherwise effected in accordance with applicable securities laws, (b) if not
already a party hereto, the assignee or transferee agrees in writing prior to
such transfer to be bound by the provisions of this Agreement applicable to the
transferor, (c) such transferee shall own Registrable Securities representing at
least 5% of the shares of Common Stock (as adjusted for any combinations,
consolidations, stock distributions, stock dividends or other recapitalizations
with respect to such shares), and (d) EIS shall act as agent and representative
for such Holder for the giving and receiving of notices hereunder.
13. EXCHANGE ACT COMPLIANCE. The Company shall comply with all
of the reporting requirements of the Exchange Act, if any, then applicable to it
and shall comply with all other public information reporting requirements of the
Commission which are conditions to the availability of Rule 144 for the sale of
the Registrable Securities. The Company shall cooperate with each Holder in
supplying such information as may be necessary for such Holder to complete and
file any information reporting forms presently or hereafter required by the
Commission as a condition to the availability of Rule 144.
14. TERMINATION OF REGISTRATION RIGHTS. All registration
rights granted under this Agreement shall terminate and be of no further force
and effect, as to any particular Holder, at such time as all Registrable
Securities held by such Holder can be sold within a four-month period without
compliance with the registration requirements of the Securities Act pursuant to
Rule 144 (including Rule 144(k)) promulgated thereunder or have been resold
pursuant to a Demand Registration.
15. MISCELLANEOUS.
(a) REMEDIES. Any Person having rights under any provision of
this Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement; PROVIDED, HOWEVER, that in no event shall any Holder have the right
to enjoin, delay or interfere with any offering of securities by the Company.
(b) AMENDMENTS AND WAIVERS. This Agreement may not be modified
or amended, or any of the provisions hereof waived, except by written agreement
of the Company and Holders of at least 50% of the Registrable Securities;
PROVIDED, HOWEVER, that without the prior written
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consent of all the Holders, no such amendment or waiver shall reduce the
foregoing percentage required to amend or waive any provision of this Agreement.
(c) SUCCESSORS AND ASSIGNS. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This Agreement may
be transferred by EIS to its Affiliates as well as any special purpose financing
or similar vehicle established by EIS; PROVIDED, HOWEVER, that EIS shall remain
liable for its obligations hereunder after any such assignment. Other than as
set forth above, no party shall transfer or assign this Agreement, without the
prior written consent of the other party, which will not be unreasonably
withheld, delayed or conditioned, except that Athersys may assign its rights in
this Agreement to any wholly owned subsidiary. In addition, whether or not any
express assignment has been made, the provisions of this Agreement which are for
the benefit of Holders of Registrable Securities are also for the benefit of,
and enforceable by, any permitted transferee of Registrable Securities in
accordance with Section 12 hereof.
(d) SEVERABILITY. In case any provision of this Agreement is
deemed to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not be in any way affected or
impaired thereby.
(e) COUNTERPARTS AND FACSIMILE. This Agreement may be executed
in any number of counterparts, and each such counterpart hereof shall be deemed
to be an original instrument, but all such counterparts together shall
constitute one agreement. This Agreement may be signed and delivered to the
other party by facsimile transmission; such transmission shall be deemed a valid
signature.
(f) DESCRIPTIVE HEADINGS; REFERENCES. The section and
paragraph headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of the Agreement.
Unless the context requires otherwise, references to "Sections" in this
Agreement are references to Sections of this Agreement.
(g) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to principles of conflicts of laws, except that all issues
concerning the relative rights of the Company and its shareholders shall be
governed by laws of the State of Delaware, without giving effect to the
principles thereof relating to conflicts of laws.
(h) NOTICES. All notices, demands and requests of any kind to
be delivered to any party in connection with this Agreement shall be in writing
and shall be deemed to have been duly given if personally delivered or if sent
by nationally-recognized overnight courier or by registered or certified
first-class mail, return receipt requested and postage prepaid, or by facsimile
transmission, addressed as follows:
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(i) if to the Company, to:
Athersys, Inc.
11000 Cedar Avenue
Cleveland, Ohio 44106
Facsimile: (216) 231-0905
Attention: President and CEO
with a copy to:
Jones, Day, Reavis &Pogue
901 Lakeside Avenue
Cleveland, Ohio 44114
Facsimile: (216) 579-0212
Attention: Christopher M. Kelly, Esq.
(ii) if to EIS, to:
Elan International Services, Ltd.
Flatts, Smiths Parish
Bermuda, FL 04
Facsimile: (441) 292-2224
Attention: President
with a copy to:
Brock Silverstein LLC
800 Third Avenue
New York, New York 10022
Facsimile: (212) 371-5500
Attention: David Robbins, Esq.
or to such other address as the party to whom notice is to be given may have
furnished to the other party hereto in writing in accordance with provisions of
this Section 15. Any such notice or communication shall be deemed to have been
received (i) in the case of personal delivery, on the date of such delivery,
(ii) in the case of facsimile transmission, on the date of telephone
confirmation of receipt, (iii) in the case of nationally-recognized overnight
courier, on the second business day after the date when sent and (iv) in the
case of mailing, on the fifth business day following that day on which the piece
of mail containing such communication is posted. Notice hereunder may be given
on behalf of the parties by their respective attorneys.
(i) ENTIRE AGREEMENT. This Agreement, the Confidentiality
Agreement and the other Transaction Documents (as defined in the Purchase
Agreement), contain the entire understanding of the parties with respect to the
subject matter hereof and supersede and terminate all prior agreements and
understandings among the parties with respect thereto.
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[Signature page follows]
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IN WITNESS WHEREOF, the parties have caused their respective
duly authorized representative to execute this Registration Rights Agreement as
of the date first written above.
ATHERSYS, INC.
By: /s/ Gil Van Bokkelen
----------------------------
Name: Gil Van Bokkelen
Title: President & CEO
ELAN INTERNATIONAL SERVICES, LTD.
By: /s/ Kevin Insley
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Name:
Title: