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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report (Date of earliest event reported):
May 22, 1995
CHOICE DRUG SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
New York 0-20606 11-2310352
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation) Number)
414 Alfred Avenue, Teaneck, New Jersey 07666
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(Address of principal executive offices)
(201) 833-2800
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(Registrant's telephone number, including area code)
Not applicable
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(Former name, former address and former fiscal year,
if changed since last report)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
The Registrant reports the following sale of securities to inform its
security holders.
On December 22, 1994, pursuant to a Stock Purchase Agreement between
Registrant and Counsel Corporation, an Ontario Corporation ("Counsel"), Counsel
acquired 2,000,000 shares of the Company's Common Stock for $7,300,000. At that
time Counsel was also granted two three-year warrants, the first of which
grants it the right to purchase up to 1,000,000 shares of the Registrant's
Common Stock at the exercise prices of $4.50 per shares, and the second of
which grants it the right to acquire up to 800,000 shares of the Registrant's
Common Stock at the exercise price of $5.50 per share. In connection with the
Stock Purchase Agreement, the Registrant and Counsel entered into a
Registration Rights Agreement which granted Counsel certain demand and
piggyback registration rights. Following this transaction, Counsel
beneficially owned approximately 38.4% of the outstanding Common Stock of the
Company.
On May 22, 1995, the Company completed a private offering (the
"Offering") of units, consisting of Common Stock and two three-year warrants,
one of which granted the right to acquire additional shares of Common Stock at
the price of $4.50 per share, and the other of which granted the right to
acquire additional shares of Common Stock at the exercise price of $5.50 per
share. In connection with the Offering, Counsel acquired 596,362 shares of
Common Stock and warrants to acquire an additional 536,726 shares of the
Registrant's Common Stock for an aggregate consideration of $2,177,000.
Following completion of the Offering, Counsel beneficially owns approximately
40.9% of Registrant's outstanding Common Stock.
In connection with the Offering, Counsel agreed to abandon its rights
under the December 16, 1994 Registration Rights Agreement. Counsel, along with
other investors in the Offering as a group, is now entitled to comparable
piggbyack and demand registration rights pursuant to a Registration Rights
Agreement entered into as of May 22, 1995.
Counsel funded its acquisitions of Registrant's Common Stock and
warrants on December 16, 1994 and May 22, 1995 with its own capital.
Allan C. Silber, a director and officer of Counsel who beneficially
owns approximately 25.0% of Counsel's outstanding securities, also participated
in the Offering. He acquired 50,000 shares of Registrant's Common Stock and
warrants with respect to an aggregate of 45,000 additional shares of such
Common Stock, constituting less than 1.0% beneficial ownership in Registrant's
outstanding Common Stock, for $182,500. Mr. Silber borrowed from the
Registrant the funds used to invest in the Offering. Such borrowing is
evidenced by an interest-bearing five (5) year note in favor of the Registrant
which is secured by the shares of Common Stock Mr. Silber acquired. Mr. Silber
disclaims beneficial ownership of the securities of Registrant held by Counsel.
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The 1994 Stock Purchase Agreement provides that so long as Counsel
continues to own the Common Stock acquired under the Agreement, the Registrant
will use its best efforts to cause the election to its Board of Directors of
four (4) individuals designated by Counsel who are reasonably acceptable to the
Registrant. Initial designees are Allan Silber, Morris Perlis, Edward Sonshine
and Joseph Furlong. The Stock Purchase Agreement also specifies that the
Registrant will use its best efforts to maintain a Board of Directors
consisting of eleven (11) members and use its best efforts to cause the
Executive Committee to consist of five (5) members, including Allan Silber,
Morris Perlis, Robert Kroll, John Haronian and one other individual who, with
Counsel's consent, is no longer a member of the Executive Committee.
Registrant also agreed pursuant to the Stock Purchase Agreement to use its best
efforts to elect Morris Perlis as Chief Executive Officer of the Registrant on
an interim basis, and to elect Allan Silber Co-chairman of the Board of
Directors on an interim basis. Currently Mr. Silber serves as Chairman of the
Board and Mr. Perlis as Vice Chairman. Mr. Perlis was succeeded by Dirk
Allison as Registrant's President and Chief Executive Officer following the
acquisition of the Premier operations, as described below. Mr. Allison
previously served as President and Chief Executive Officer of Premier.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
The Registrant reports the following acquisition and credit line to
inform its security holders:
Pursuant to an Agreement and Plan of Merger dated April 5, 1995, the
Company acquired through arm's-length negotiations the operations of
PremierPharmacy, Inc., a Delaware corporation ("Premier"). The acquisition was
accomplished by a merger of a wholly-owned subsidiary of the Registrant into
Premier. Premier provides pharmacy services to nursing homes and hospitals.
Its nursing home pharmacy business is based in the New York Metropolitan area,
and its hospital pharmacy business operates in Arkansas, California, Georgia,
Iowa, Louisiana, Oklahoma, Tennessee and Texas.
The acquisition will be accounted for as a purchase. The purchase
price was approximately $4,250,000, payable in cash. The purchase price was
funded in part by the proceeds of the Registrant's Offering and, in part,
through a drawing on the Company's line of credit with CreditAnstalt Corporate
Finance, Inc. ("CreditAnstalt"). Registrant has pledged substantially all of
the assets of Premier to CreditAnstalt pursuant to the terms of that certain
Credit Agreement among Registrant and CreditAnstalt dated May 19, 1995 (the
"Credit Agreement").
The closing of the Premier transaction occurred on May 22, 1995, and
the Registrant intends to continue the acquired operations.
Pursuant to the Credit Agreement, the Registrant has established a
three (3) year revolving line of credit for $10,000,000. Terms of the Credit
Agreement were negotiated on an arms-length basis. Proceeds of the line may be
used to fund acquisitions, to satisfy outstanding debt and for general working
capital purposes.
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In connection with establishing the line of credit, the Registrant was
required to pledge to CreditAnstalt substantially all of its assets, including
the newly acquired assets pertaining to the Premier operations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) and (b) It is impracticable to provide the required financial
statements of the acquired business described in Item
2 and pro forma financial information at this time.
Such information will be filed within 60 days.
(c) The exhibits filed as a part of this Report are
listed in the Exhibit Index immediately following the
signature page.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHOICE DRUG SYSTEMS, INC.
By: /s/ R. Dirk Allison
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Name: R. Dirk Allison
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Title: President and Chief Executive Officer
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Date: June 5, 1995
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Exhibit Index
<TABLE>
<CAPTION>
Exhibit No.
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2.1 Agreement and Plan Merger dated April 5, 1995 by and among Premier
Pharmacy, Inc., Registrant and a Delaware corporation to be
organized as a wholly owned subsidiary of Registrant (Incorporated
by reference to Exhibit 2.1 to Registrant's Annual Report on Form
10-K for the year ended February 28, 1995 (the "1995 Annual Report
Form 10-K"))
4.1 Stock Purchase Agreement dated December 16, 1994 between
Registrant and Counsel Corporation. (Incorporated by reference to
Exhibit 4.7 to Registrant's 1995 Annual Report on Form 10-K.)
4.2 Warrants issued to Counsel Corporation pursuant to Stock Purchase
Agreement. (Incorporated by reference to Exhibits 4.8 and 4.9 to
Registrant's 1995 Annual Report on Form 10-K.)
4.3 Form of Warrants issued pursuant to Registrant's private offering
which closed on May 22, 1995. (Incorporated by reference to
Exhibits 4.5 and 4.6 to Registrant's 1995 Annual Report on Form 10-
K.)
4.4 Form of Registration Rights Agreement dated as of May 22, 1995
among Registrant and investors of such Offering.
99.1 Credit Agreement among Registrant and CreditAnstalt Corporate
Finance, Inc., dated May 19, 1995. (Incorporated by reference to
Exhibit 10.19 to Registrant's Annual Report on Form 10-K.)
</TABLE>
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EXHIBIT 4.4
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT is made as of May 22, 1995 among
Choice Drug Systems, Inc. (the "Company"), Counsel Corporation ("Counsel") and
the investors listed on the signature pages attached hereto (the "Investors").
WHEREAS, the Company and Counsel entered into that certain
Registration Rights Agreement Dated December 16, 1994 (the "1994
Agreement") and;
WHEREAS, the Company desires jointly to offer to Counsel and the
Investors registration rights comparable to those set forth in the 1994
Agreement in connection its May 1995 offering of 1,600,000 shares of common
stock (the "Offering"); and
WHEREAS, Counsel has consented to the granting of such registration
rights.
NOW, THEREFORE, in order to induce Counsel to terminate the 1994
Agreement and to induce the Investors to purchase the shares of Common Stock
which are the subject of the Offering, the Company has agreed to provide the
registration rights set forth in this Agreement, and the Holders have agreed to
accept the same, all subject to the current terms and conditions set forth
herein.
1. Definitions.
(a) The term "Registrable Securities" means (i) the Shares of
the Company's common stock issued upon exercise of the Warrants held by Counsel
pursuant to the 1994 Stock Purchase Agreement or by persons to whom Counsel has
transferred any of said shares in a transaction not involving any public
offering, (ii) the Stock and shares of the Company's common stock issued upon
exercise of the Warrants held by the Investors pursuant to the Offering or by
persons to whom Counsel has transferred any of said stock in a transaction not
involving any public offering, and (iii) any securities issued or issuable with
respect to the securities referred to in clauses (i) or (ii) above by way of a
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.
(b) The term "Holders" means Counsel, the Investors and any of
their respective permitted successors and assigns.
(c) Unless otherwise stated, capitalized terms not otherwise
defined herein have the meanings set forth in that certain Stock Purchase
Agreement between the Company and Counsel dated December 16, 1994 and the April
28, 1995 Disclosure Statement pertaining to the Offering.
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2. Piggyback Registrations.
(a) Right to Piggyback. Beginning September 1, 1995, whenever
the Company proposes to register any of its securities under the Securities Act
of 1933, as amended (the "Securities Act") and the registration form to be used
may be used for the registration of Registrable Securities (a "Piggyback
Registration"), the Company will give prompt written notice (in any event at
least 30 days in advance) to all Holders of Registrable Securities of its
intention to effect such a registration and will include in such registration
all Registrable Securities with respect to which the Company has received
written requests for inclusion therein within 15 days after the receipt of the
Company's notice. The number of securities subject to the first such Piggyback
Registration cannot exceed the number of securities proposed to be sold.
(b) Piggyback Expenses. The Registration Expenses of the
Holders of Registrable Securities will be paid by the Company in all Piggyback
Registrations.
(c) Priority on Primary Registrations. If a Piggyback
Registration is, in whole or in part, an underwritten primary 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, the
Company will include in such registration (i) first, the securities the Company
proposes to sell, (ii) second, the Registrable Securities requested to be
included in such registration, pro rata among the Holders of such Registrable
Securities on the basis of the number of shares requested to be included by
such Holders, and (iii) third, other securities requested to be included in
such registration.
(d) Priority on Secondary Registration. If a Piggyback
Registration is an underwritten secondary registration on behalf of Holders of
the Company's securities, 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, the
Company will include in such registration (i) first, the Registrable Securities
requested to be included in such registration, pro rata among the Holders of
such securities on the basis of the number of securities requested to be
included by such Holders, (ii) second, other securities requested to be
included in such registration, and (iii) third, the securities the Company
proposes to sell.
(e) Other Registrations. If the Company has previously filed
a registration statement with respect to Registrable Securities pursuant to this
Section 2 or pursuant to Section 3, and if such previous registration has not
been withdrawn or abandoned, the Company will not file or cause to be filed or
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except in a Rule 145 transaction, or on Form S-8 thereunder
or any successor form), whether on its own behalf or at the request of any
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Holder or Holders of such securities, until a period of at least six months has
elapsed from the effective date of such previous registration.
3. Demand Registration.
(a) Registration. At any time after December 16, 1996, the
Holders of not less than one-half of the Registrable Securities previously not
registered pursuant to Section 2 may request a maximum of two registrations
under the Securities Act of all or part of their Registrable Securities on Form
S-1 under the Securities Act or any other permitted registration form ("Demand
Registration") for which the Company will pay all Registration Expenses as
defined in Section 6 below), in the event that not all Registrable Securities
were previously registered pursuant to Piggyback Registration. A registration
will not count as a Demand Registration until it has become effective.
(b) Priority on Demand Registrations. Within five days after
receipt of any request for a Demand Registration, the Company will give written
notice of such request to all Holders of Registrable Securities previously not
registered pursuant to Section 2 and will include in such Demand Registration
all Registrable Securities with respect to which the Company has received
written requests for inclusion therein within 15 days after the receipt of the
Company's notice. If the managing underwriter of any Demand Registration
advises the Company in writing that in its opinion the number of Registrable
Securities and other securities requested to be included exceeds the number of
Registrable Securities and other securities which can be sold in such offering,
the Company will include in such registration prior to the inclusion of any
securities which are not Registrable Securities, the number of Registrable
Securities requested to be included which in the opinion of such underwriter
can be sold, pro rata among the respective Holders on the basis of their
relative shares of Registrable Securities requested to be included. Any
persons other than Holders of Registrable Securities who participate in the
Demand Registration must pay their share of the Registration Expenses as
provided in Section 6.
(c) Restrictions on Registrations. The Company will not be
obligated to effect any Demand Registration within six months after the
effective date of a previous registration in which the Holders of Registrable
Securities were given piggyback rights pursuant to Section 2 and which there
was no reduction in the number of Registrable Securities requested to be
included. The Company may postpone for up to six months the filing or the
effectiveness of a registration statement for a Demand Registration if the
Company believes that such Demand Registration might reasonably be expected to
have an adverse effect on any proposal or plan by the Company or any of its
subsidiaries to engage in any acquisition of assets (other than in the ordinary
course of business) or any merger, consolidation, tender offer or similar
transaction; provided that in such event, the Holders of Registrable Securities
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
Demand Registration.
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(d) Selection of Underwriters. The Company will have the
right to decide if a Demand Registration shall be underwritten and to select the
investment banker(s) and manager(s) to manage or administer any offering
pursuant to a Demand Registration. Notwithstanding the foregoing, the Company's
unwillingness or inability to select such banker or manager shall not limit the
Company's obligation to proceed with a requested Demand Registration.
(e) Other Registration Rights. Except as provided in this
Agreement, 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 on terms
that are superior to the rights granted herein, without the written consent of
the Holders of at least two-thirds of the Registrable Securities; provided that
the Company will not grant registration rights that are pari passu to the
rights granted herein covering in excess of 3,800,000 shares of Common Stock.
(f) The Registration Expenses of the Holders of Registrable
Securities will be paid by the Company in Demand Registration.
4. Holdback Agreements.
(a) Each Holder of Registrable Securities agrees not to effect
any public sale or distribution of equity securities of the Company, or any
securities convertible into or exchangeable or exercisable for such securities,
during the seven days prior to and the 180 day period beginning on the
effective date of any underwritten Piggyback Registration or any underwritten
Demand Registration in which Registrable Securities are included (except as
part of such underwritten registration), unless the underwriters managing the
registered public offering otherwise agree.
(b) The Company agrees not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and during the 180 day period beginning on the effective date of any
underwritten Piggyback Registration or any underwritten Demand Registration
(except in a Rule 145 transaction, or as part of such underwritten registration
or pursuant to registrations on Form S-8 or any successor form), unless the
underwriters managing the registered public offering otherwise agree.
5. Registration Procedures. Whenever the Holders of Registrable
Securities have requested that any Registrable Securities be registered
pursuant to this Agreement, the Company will use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company will
as expeditiously as possible:
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(a) prepare and file with the Securities and Exchange
Commission (the "SEC") a registration statement with respect to such Registrable
Securities and use its best 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 furnish
to the counsel selected by the Holders of a majority of the Registrable
Securities covered by such registration statement copies of all such documents
proposed to be filed, which documents will be subject to the review of such
counsel);
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for a period of not less than six months 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 its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdiction as any seller reasonably requests 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 but for this subparagraph, (ii) subject itself
to taxation in any such jurisdiction or (iii) consent to general service or
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;
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(f) cause all such Registrable Securities to be listed on each
securities exchange 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 (including, without limitation,
effecting a stock split or a combination of shares);
(i) make available for inspection by any seller of Registrable
Securities, 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 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; and
(j) obtain a 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 as the Holders of a majority of the
Registrable Securities being sold reasonably request (provided that such
Registrable Securities constitute at least 10% of the securities covered by
such registration statement).
6. Registration Expenses.
(a) All expenses incident to the Company's performance under
this Agreement, including without limitation all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, and fees and disbursements of
counsel for the Company and all independent certified public accountants,
underwriters (excluding discounts and commissions, which are the responsibility
of the seller) and other persons retained by the Company (all such expenses
being herein called "Registration Expenses"), will be borne as provided in this
Agreement, except that the Company will, in any event, pay its internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit or quarterly review, the expense of any liability insurance
and the expenses and fees for listing the securities to be registered on each
securities exchange on which similar securities issued by the Company are then
listed.
7. Indemnification
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(a) The Company agrees to indemnify, to the extent permitted
by law, each Holder of Registrable Securities, its officers, directors and
employees and each person who controls such Holder (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities and expenses
caused by any untrue or alleged untrue statement of material fact contained in
any registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of
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 such underwriters, their officers, directors and employees 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. Notwithstanding the foregoing, to the
extent that the provisions on indemnification and contribution contained in any
such underwriting agreement are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall control.
(b) In connection with any registration statement in which a
Holder of Registrable Securities is participating, each such Holder will
furnish to the Company in writing such information and affidavits as the
Company reasonably requests for use in connection with any such registration
statement or prospectus and, to the extent permitted by law, will indemnify the
Company, its directors, officers and employees and each person who controls the
Company (within the meaning of the Securities Act) against any losses, claims,
damages, liabilities and expenses resulting from any untrue or alleged untrue
statement of material fact contained in the registration statement, prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading, but only to the
extent that such untrue statement or omission is contained in any information
or affidavit so furnished in writing by such Holder expressly for use therein.
(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 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. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld).
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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.
8. Participation in Underwritten Registrations. No person may
participate in any registration hereunder which includes an underwritten
offering unless such person (i) agrees to sell such person's securities on the
basis provided in any underwriting arrangements approved by the person or
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
9. Termination of Prior Registration Rights Agreement. The
Company and Counsel hereby agree that, effective as of the date hereof, the
1994 Agreement is terminated. Counsel and the Company acknowledge that no
registrations were requested or undertaken in connection with the 1994 Agreement
prior to its termination hereby.
10. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities which are
superior to the rights granted to the Holders of Registrable Securities in this
Agreement.
(b) Adjustments Affecting Registrable Securities. The Company
will not take any action, or permit any change to occur, with respect to its
securities which would materially and adversely affect the ability of the
Holders of Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement or which would materially
and adversely affect the marketability of such Registrable Securities in any
such registration (including, without limitation, effecting a stock split or a
combination of shares).
(c) 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.
(d) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended and the Company may
take any action herein prohibited, or omit to perform any act herein required
to be performed by it, only if the Company has obtained the written consent of
Holders of at least two-thirds of the Registrable Securities.
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(e) Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto will bind and inure
to the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or Holders of Registrable Securities are also for the benefit of,
and enforceable by, any subsequent Holder of Registrable Securities, provided
that the Company is given written notice at the time of or within a reasonable
time after said assignment, stating the name and address of the assignee or
Holder and identifying the securities with respect to which such registration
rights are being assigned, and provided further, that the assignee or Holder of
such rights assumes the obligations of such Holder under this Agreement.
(f) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.
(g) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signature of more than one party, but all such counterparts taken together
will constitute one and the same Agreement.
(h) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
(i) Governing Law. The construction, validity and
interpretation of this Agreement and the exhibits and schedules hereto will be
governed by the internal law, and not the law of conflicts, of the State of
Maryland.
(j) Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
will be in writing and will be deemed to have been given when delivered
personally or mailed by certified or registered mail, return receipt requested
and postage prepaid, to the recipient. Such notices, demands and other
communications will be sent to each Holder of Registrable Securities at the
address provided by such Holder and to the Company at the address indicated
below:
Choice Drug Systems, Inc.
414 Alfred Avenue
Teaneck, New Jersey 07666
Attn: Secretary
9
<PAGE> 10
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
10
<PAGE> 11
IN WITNESS WHEREOF, the parties have executed this Agreement as of
May __, 1995.
<TABLE>
<S> <C>
CHOICE DRUG SYSTEMS, INC. COUNSEL CORPORATION
By: By:
------------------------------------------------ ------------------------------------------
Its Its
------------------------------------------------ ------------------------------------------
Address:
--------------------------------------
------------------------------------------------
------------------------------------------------
INVESTORS:
- - ----------
COUNSEL CORPORATION
- - ------------------------------------------------------ ------------------------------------------------
Signature Signature
Morris Perlis
- - ------------------------------------------------------ ------------------------------------------------
Name (Type or Print) Name (Type or Print)
Address: Counsel Corporation Address: c/o Counsel Corporation
Exchange Tower Exchange Tower
Suite 1300, P.O. Box 435 Suite 1300, P.O. Box 435
Two First Canadian Place Two First Canadian Place
Toronto, Ontario M5X 1E3 Toronto, Ontario M5X 1E3
- - ------------------------------------------------------ ------------------------------------------------
Signature Signature
Allan Silber
- - ------------------------------------------------------ ------------------------------------------------
Name (Type or Print) Name (Type or Print)
Address: c/o Counsel Corporation Address:
Exchange Tower ---------------------------------------
Suite 1300, P.O. Box 435
Two First Canadian Place ------------------------------------------------
Toronto, Ontario M5X 1E3
</TABLE>
11
<PAGE> 12
<TABLE>
<S> <C>
- - ------------------------------------------------------ ------------------------------------------------------
Signature Signature
- - ------------------------------------------------------ ------------------------------------------------------
Name (Type or Print) Name (Type or Print)
Address: Address:
--------------------------------------------- ---------------------------------------------
- - ------------------------------------------------------ ------------------------------------------------------
- - ------------------------------------------------------ ------------------------------------------------------
Signature Signature
- - ------------------------------------------------------ ------------------------------------------------------
Name (Type or Print) Name (Type or Print)
Address: Address:
--------------------------------------------- ---------------------------------------------
- - ------------------------------------------------------ ------------------------------------------------------
- - ------------------------------------------------------ ------------------------------------------------------
Signature Signature
- - ------------------------------------------------------ ------------------------------------------------------
Name (Type or Print) Name (Type or Print)
Address: Address:
--------------------------------------------- ---------------------------------------------
- - ------------------------------------------------------ ------------------------------------------------------
- - ------------------------------------------------------ ------------------------------------------------------
Signature Signature
- - ------------------------------------------------------ ------------------------------------------------------
Name (Type or Print) Name (Type or Print)
Address: Address:
--------------------------------------------- ---------------------------------------------
- - ------------------------------------------------------ ------------------------------------------------------
</TABLE>
12
<PAGE> 13
<TABLE>
<S> <C>
- - ------------------------------------------------------ ------------------------------------------------------
Signature Signature
- - ------------------------------------------------------ ------------------------------------------------------
Name (Type or Print) Name (Type or Print)
Address: Address:
--------------------------------------------- ---------------------------------------------
- - ------------------------------------------------------ ------------------------------------------------------
- - ------------------------------------------------------ ------------------------------------------------------
Signature Signature
- - ------------------------------------------------------ ------------------------------------------------------
Name (Type or Print) Name (Type or Print)
Address: Address:
--------------------------------------------- ---------------------------------------------
- - ------------------------------------------------------ ------------------------------------------------------
- - ------------------------------------------------------ ------------------------------------------------------
Signature Signature
- - ------------------------------------------------------ ------------------------------------------------------
Name (Type or Print) Name (Type or Print)
Address: Address:
--------------------------------------------- ---------------------------------------------
- - ------------------------------------------------------ ------------------------------------------------------
- - ------------------------------------------------------ ------------------------------------------------------
Signature Signature
- - ------------------------------------------------------ ------------------------------------------------------
Name (Type or Print) Name (Type or Print)
Address: Address:
--------------------------------------------- ---------------------------------------------
- - ------------------------------------------------------ ------------------------------------------------------
</TABLE>
13
