OF SUCH PIGGYBACK
REGISTRATION.
NOTWITHSTANDING ANYTHING IN THIS SECTION 3 TO THE CONTRARY, THE
RIGHTS OF THE HOLDERS UNDER THIS SECTION 3 SHALL BE SUBJECT TO THE RIGHTS,
INCLUDING RIGHTS OF PRIORITY AND RIGHTS RELATED TO THE SELECTION OF
UNDERWRITERS, OF CERTAIN SECURITY HOLDERS OF THE COMPANY TO CAUSE THE COMPANY TO
EFFECT A DEMAND REGISTRATION PURSUANT TO SECTION 2 OF THE EIS REGISTRATION
RIGHTS AGREEMENT, AS IN EFFECT AS OF THE DATE HEREOF.
(B)
PRIORITY ON PIGGYBACK REGISTRATIONS.
IF A PIGGYBACK REGISTRATION
IS TO BE AN UNDERWRITTEN OFFERING, 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 PIGGYBACK REGISTRATION, ONLY AS MAY BE PERMITTED
IN THE REASONABLE BUSINESS JUDGMENT OF THE MANAGING UNDERWRITERS FOR SUCH
PIGGYBACK REGISTRATION:
(I)
FIRST, UP TO THAT NUMBER OF SECURITIES THAT THE COMPANY PROPOSES
TO SELL FOR ITS OWN ACCOUNT, IF ANY;
(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 WITH
REGISTRATION RIGHTS APPLICABLE TO SUCH PIGGYBACK REGISTRATION UNDER AGREEMENTS
EXISTING AS OF THE DATE HEREOF, PRO RATA AMONG THE HOLDERS OF SUCH REGISTRABLE
SECURITIES AND SUCH OTHER PERSONS, ON THE BASIS OF THE NUMBER OF SHARES OWNED;
AND
(III)
THIRD, UP TO THAT NUMBER OF OTHER SECURITIES REQUESTED TO BE
INCLUDED IN SUCH REGISTRATION.
The Holders of any Registrable Securities included in such an underwritten
offering must execute an underwriting agreement, in customary form and in form
and substance satisfactory to the managing underwriters.
(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 3(A) AND PRIOR TO THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT
FILED IN CONNECTION
-6-
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 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).
(D)
SELECTION OF UNDERWRITERS.
THE COMPANY WILL HAVE THE RIGHT TO
SELECT THE INVESTMENT BANKER(S) AND MANAGER(S) TO ADMINISTER AN OFFERING
PURSUANT TO A PIGGYBACK REGISTRATION, SUBJECT TO THE APPROVAL OF BIOVAIL, OR, IN
THE EVENT THAT BIOVAIL (TAKEN TOGETHER WITH ITS SUBSIDIARIES) AT SUCH TIME HOLDS
LESS THAN 25% OF THE REGISTRABLE SECURITIES, THE HOLDERS OF A MAJORITY OF THE
REGISTRABLE SECURITIES, WHICH APPROVAL WILL NOT BE UNREASONABLY WITHHELD OR
DELAYED.
4.
EXPENSES OF REGISTRATION.
EXCEPT AS OTHERWISE PROVIDED HEREIN OR
AS MAY OTHERWISE BE PROHIBITED BY APPLICABLE LAW, ALL REGISTRATION EXPENSES
INCURRED IN CONNECTION WITH