EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of this
10th day of March, 2006, by and among DUSA Pharmaceuticals, Inc., a publicly
traded pharmaceutical company incorporated in the State of New Jersey, with
principal offices at 00 Xxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx ("DUSA"), and the
shareholders of Sirius Laboratories, Inc., a privately held pharmaceutical
company incorporated in the State of Illinois ("Sirius"), named on the signature
pages attached hereto (each a "Participating Shareholder" and, collectively, the
"Participating Shareholders").
RECITALS
WHEREAS, pursuant to a Merger Agreement, dated December 30, 2005, by and
among DUSA, certain of the Participating Shareholders and Sirius, as amended by
the First Amendment to Merger Agreement, dated February 6, 2006 (as so amended,
the "Merger Agreement"), the Participating Shareholders will acquire DUSA
Shares;
WHEREAS, to induce the Participating Shareholders to execute and deliver a
subscription agreement in accordance with the Merger Agreement and in accordance
with the terms of the Merger Agreement, DUSA has agreed to provide the
Participating Shareholders with certain registration rights with respect to the
DUSA Shares in the event a Registration Statement on Form S-4 has not been
prepared in accordance with the Merger Agreement;
WHEREAS, a Registration Statement on Form S-4 has not been prepared in
accordance with the Merger Agreement;
NOW, THEREFORE, in consideration of the foregoing, the premises and the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
1.1 "Additional Registration Statement" has the meaning set forth in
Section 2.2 of this Agreement.
1.2 "Business Day" means any day other than a Saturday, Sunday or federal
holiday.
1.3 "Claims" has the meaning set forth in Section 6.1 of this Agreement.
1.4 "DUSA Indemnitee" has the meaning set forth in Section 6.2 of this
Agreement.
1.5 "DUSA Shares" means shares of common stock, no par value per share, of
DUSA, having the restrictions set forth in Sections 4.8 and 4.9 of the Merger
Agreement.
1.6 "Effective Date" means the date that the applicable Registration
Statement is first declared effective by the SEC.
1.7 "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations promulgated thereunder.
1.8 "Holders' Counsel" means law firm selected by the Shareholder
Representatives, on behalf of the Participating Shareholders, as provided in the
Merger Agreement.
1.9 "Indemnified Damages" has the meaning set forth in Section 6.1 of this
Agreement.
1.10 "Indemnified Person" has the meaning set forth in Section 6.1 of this
Agreement.
1.11 "Initial Registration Statement" has the meaning set forth in Section
2.1 of this Agreement.
1.12 "Party" means DUSA and each Participating Shareholder. "Parties" means
all such persons collectively.
1.13 "Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability partnership,
limited liability company, joint venture, estate, trust, association,
organization, labor union, Governmental Body or other entity.
1.14 "register," "registered," and "registration" refer to a registration
effected by preparing and filing one or more Registration Statement(s) in
compliance with the Securities Act and pursuant to Rule 415, and the declaration
or ordering of effectiveness of such Registration Statement(s) by the SEC.
1.15 "Registrable Shares" means, collectively, (i) the DUSA Shares to be
acquired pursuant to Section 2.2(b) of the Merger Agreement by the Participating
Shareholders, (ii) the DUSA Shares, if any, issued by DUSA to any Participating
Shareholder upon the satisfaction of the conditions set forth in Section 2.2(c)
of the Merger Agreement; and (iii) the DUSA Shares, if any, issued or issuable
to a Participating Shareholder with respect to DUSA Shares issued pursuant to
clauses (i) and (ii) above as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise; provided, however,
that the Registrable Shares shall not include (1) any DUSA Shares which may be
transferred pursuant to Rule 144, and (2) any DUSA Shares which are sold or
otherwise transferred by a Participating Shareholder either by use of a
Registration Statement, Rule 144 or otherwise.
1.16 "Registration Period" means the period beginning after the Effective
Date of any Registration Statement relating to or covering the Registrable
Shares (or any of them) and ending on the earlier of (i) the date on which the
Participating Shareholders may sell all of the Registrable Shares (registered
pursuant to the Registration Statement) pursuant to Rule 144 without regard to
the volume limitation of such Rule, and (ii) the date on which the Participating
shall have sold (or otherwise transferred) all the Registrable Shares registered
pursuant to the respective Registration Statement.
2
1.17 "Registration Statement" means a registration statement of DUSA filed
under the Securities Act covering the Registrable Shares, including the Initial
Registration Statement and the Additional Registration Statement.
1.18 "Rule 144" has the meaning set forth in Section 8 of this Agreement.
1.19 "Rule 415" means Rule 415 under the Securities Act or any successor
rule(s) providing for offering securities on a continuous or delayed basis.
1.20 "SEC" means the United States Securities and Exchange Commission or
any successor agency or commission.
1.21 "Securities Act" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations promulgated thereunder.
1.22 "Violation(s)" has the meaning set forth in Section 6.1 of this
Agreement
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Merger Agreement.
2. Registration.
2.1 As soon as reasonably practicable following the Closing Date under the
Merger Agreement, DUSA shall, at its sole cost and expense, prepare and file
with the SEC a Registration Statement on Form S-3 covering all of the
Registrable Shares issued pursuant to Section 2.2(b) of the Merger Agreement
(the "Initial Registration Statement"). DUSA shall use commercially reasonable
efforts to file the Initial Registration Statement within ninety (90) days
following the Closing Date and use commercially reasonable efforts to have the
Initial Registration Statement declared effective as soon as reasonably
practicable thereafter.
2.2 If Registrable Shares (i) are issued pursuant to Section 2.2(c)(ii) of
the Merger Agreement, (ii) are released from any lock-up provisions applicable
under Section 2.6 of the Merger Agreement (whether due to the expiration of the
restriction period provided thereunder or a change of control of DUSA or
otherwise) or (iii) are released from escrow as provided for in the Shareholders
Escrow Agreement and Section 2.5(b) of the Merger Agreement, and such
Registrable Shares will not be transferable pursuant to Rule 144 or are not
covered by the Initial Registration Statement, then DUSA shall use its
commercially reasonable efforts, at its sole cost and expense, to prepare and
file with the SEC, an additional registration statement on Form S-3 covering all
of the Registrable Shares issued pursuant to Section 2.2 of the Merger Agreement
(the "Additional Registration Statement") within ninety (90) days of the first
to occur of the events described in clauses (i) through (iii) hereof. DUSA shall
use its commercially reasonable efforts to have the Additional Registration
Statement declared effective as soon as reasonably practicable thereafter.
2.3 In the event that Form S-3 is not available for the registration of any
Registrable Shares hereunder, DUSA shall register the Registrable Shares on
another available Registration Statement selected by DUSA in its sole
discretion.
3
2.4 Holders' Counsel shall oversee and participate on behalf of the
Participating Shareholders in the preparation of any registration pursuant to
this Section 2 and shall be responsible for giving and receiving notices and
communications required hereunder on their behalf, taking all actions on behalf
of the Principal Shareholders as is explicitly contemplated by this Agreement
and taking all other actions as deemed necessary or appropriate in the judgment
of the Holders' Counsel for the accomplishment of the foregoing. Notices or
communications to or from the Holders' Counsel shall constitute notice to or
from each Participating Shareholder. Holders' Counsel shall reasonably cooperate
with DUSA in performing DUSA's obligations under this Agreement. DUSA shall
provide Holders' Counsel with information with respect to any registration
pursuant to this Agreement and keep such Holders' Counsel apprised as to the
status thereof.
2.5 In the event the number of Registrable Shares available under a
Registration Statement filed pursuant to Section 2 is insufficient to cover all
of the Registrable Shares required to be covered by such Registration Statement,
DUSA shall amend the applicable Registration Statement, or file a new
Registration Statement, or both, so as to cover 100% of such Registrable Shares
required to be covered. DUSA shall undertake in good faith to have such
amendment and/or new Registration Statement declared effective by the SEC as
soon as reasonably practicable thereafter.
3. Related Obligations.
At such time as DUSA is obligated to file a Registration Statement with the
SEC pursuant to Sections 2.1, 2.2 and/or 2.5, DUSA shall use commercially
reasonable best efforts to promptly file the registration of the Registrable
Shares and, in accordance therewith, DUSA shall have the following obligations:
3.1 DUSA shall submit to the SEC promptly after DUSA learns that no review
of a particular Registration Statement will be made by the staff of the SEC or
that the staff of the SEC has no further comments on a particular Registration
Statement, as the case may be, a request for acceleration of effectiveness of
such Registration Statement. DUSA shall keep each Registration Statement
effective pursuant to Rule 415 at all times during the Registration Period for
such Registration Statement. DUSA shall ensure that each Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein) shall not contain any 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 the case of prospectuses, in the light of the
circumstances in which they were made) not misleading.
3.2 DUSA shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may
be necessary to keep such Registration Statement effective during the
Registration Period, and, during such period, comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Shares covered
by such Registration Statement until such time as all of such Registrable Shares
shall have been disposed of as contemplated herein.
4
3.3 DUSA shall comply with Rule 424 under the Act relating to filing of
prospectuses and furnish to each Participating Shareholder such number of copies
of the Registration Statement and the prospectus included therein (including
each preliminary prospectus) as such persons reasonably may request in order to
facilitate the public sale of the Registrable Shares covered by such
Registration Statement;
3.4 DUSA shall use commercially reasonable efforts to cause the Registrable
Shares covered by such Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be necessary to enable
the Participating Shareholders to consummate the disposition of such Registrable
Shares.
3.5 DUSA shall permit Holders' Counsel to review, comment upon and
participate in the preparation of those portions of each Registration Statement
and all amendments and supplements to a Registration Statement that pertain to
the Participating Shareholders (except for reports on Form 10-K, Form 10-Q and
Form 8-K, any similar or successor reports and any other documents incorporated
by reference into a Registration Statement, which collectively shall be referred
to as the "Incorporated Reports") within a reasonable number of days prior to
the filing of the Registration Statement, amendment or supplement with the SEC.
DUSA shall furnish to Holders' Counsel, without charge: (1) copies of any
correspondence from the SEC or the staff of the SEC to DUSA or its
representatives directly relating to any Registration Statement, and (2) copies
of any Registration Statement and any amendment(s) and exhibits thereto,
including financial statements, schedules and all documents incorporated therein
by reference, if not otherwise available on the XXXXX system. Holder's Counsel
shall reasonably cooperate with DUSA in performing DUSA's obligations pursuant
to this Section 3. Before filing a Registration Statement covering Registrable
Shares, a prospectus constituting a part thereof or amendments or supplements
thereto, DUSA will furnish to Holders' Counsel copies of all such documents
proposed to be filed.
3.6 DUSA shall use its commercially reasonable efforts to: (i) register and
qualify, unless an exemption from registration and qualification applies, the
Registrable Shares covered by a Registration Statement under the securities or
"blue sky" laws of all applicable jurisdictions in the United States, (ii)
prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Shares for sale in such jurisdictions;
provided, however, that DUSA shall not be required in connection therewith or as
a condition thereto to: (A) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3.6, (B) subject
itself to general taxation in any such jurisdiction, and/or (C) file a general
consent to service of process in any such jurisdiction. DUSA shall promptly
notify Holders' Counsel of the receipt by DUSA of any notification with respect
to the suspension of the registration or qualification of any of the Registrable
Shares for sale under the securities or "blue sky" laws of any jurisdiction in
the United States or its receipt of actual notice of the initiation or
threatening of any proceeding for such purpose.
5
3.7 DUSA shall promptly notify Holders' Counsel in writing of the happening
of any event, as promptly as practicable after becoming aware of such event, as
a result of which the prospectus included in a Registration Statement, as then
in effect, includes an untrue statement of a material fact or omission to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (provided that in no event shall such notice contain any
material, nonpublic information), and, subject to Section 3.6, promptly prepare
a supplement or amendment to such Registration Statement to correct such untrue
statement or omission, and deliver a copy of the prospectus contained in such
supplement or amendment to Holders' Counsel; provided, however, DUSA shall not
be required to provide any notice to any security holders or Holders' Counsel
upon the preparation or filing of any Incorporated Report with the SEC pursuant
to the requirements of the Exchange Act. DUSA shall also promptly notify
Holders' Counsel in writing: (i) when a prospectus or any prospectus supplement
or post-effective amendment has been filed, and when a Registration Statement or
any post-effective amendment has become effective, (ii) of any request by the
SEC for amendments or supplements to a Registration Statement or related
prospectus or related information, (iii) of DUSA's determination that a
post-effective amendment to a Registration Statement would be appropriate, (iv)
of the receipt by DUSA of any notification with respect to any comments by the
SEC regarding such Registration Statement or prospectus or any amendment or
supplement thereto, (v) of the receipt by DUSA of any notification with respect
to the issuance by the SEC of any stop order suspending the effectiveness of
such Registration Statement or prospectus or any amendment or supplement thereto
or the initiation or threatening of any proceeding for that purpose and (vi) of
the receipt by DUSA of any notification with respect to the suspension of the
qualification of such Registrable Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purposes.
3.8 DUSA shall use commercially reasonable efforts to obtain the withdrawal
of any order suspending the effectiveness of the Registration Statements.
3.9 DUSA shall use commercially reasonable efforts to prevent the issuance
of any stop order or other suspension of effectiveness of a Registration
Statement, or the suspension of the qualification of any of the Registrable
Shares for sale in any jurisdiction and, if such an order or suspension is
issued, to obtain the withdrawal of such order or suspension at the earliest
possible moment and to notify Holders' Counsel of such order and the resolution
thereof or its receipt of actual notice of the initiation of any proceeding for
such purpose.
3.10 DUSA shall hold in confidence and not make any disclosure of
information concerning a Participating Shareholder provided to DUSA unless (i)
disclosure of such information is deemed necessary by DUSA to comply with
federal or state securities laws, (ii) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in any Registration
Statement, (iii) the release of such information is ordered pursuant to a
subpoena or other final, non-appealable order from a Governmental Body of
competent jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of this Agreement.
3.11 DUSA shall use its commercially reasonable efforts either to cause all
the Registrable Shares covered by a Registration Statement to be listed or
quoted on (i) the
6
NASDAQ National Market, or (ii) such securities exchange on which securities of
the same class or series issued by DUSA are then listed or quoted, if any, if
the listing of such Registrable Shares is then permitted under the rules of such
exchange. DUSA shall pay all reasonable fees and expenses in connection with
satisfying its obligation under this Section 3.8.
3.12 DUSA shall otherwise use its commercially reasonable efforts to comply
with all applicable rules and regulations of the SEC in connection with any
registration hereunder.
3.13 Within ten (10) Business Days after a Registration Statement which
covers Registrable Shares is ordered effective by the SEC, DUSA shall deliver to
the transfer agent for such Registrable Shares (with copies to Holders' Counsel)
confirmation that such Registration Statement has been declared effective by the
SEC.
3.14 Notwithstanding anything to the contrary herein but subject to
applicable law, at any time before or after the Registration Statement has been
declared effective by the SEC, DUSA, in its sole discretion, may delay the
disclosure of material, non-public information concerning DUSA the disclosure of
which at the time is not, in the good faith opinion of DUSA, in the best
interest of DUSA and its shareholders.
3.15 DUSA shall furnish or cause to be furnished to the Shareholder
Representatives on behalf of the Participating Shareholders a reasonably number
of copies of any Registration Statement hereunder and of each amendment and
supplement thereto (in each case including all exhibits), each prospectus,
including a preliminary prospectus, if any, in conformity with the requirements
of the Securities Act, and such other documents as the Shareholder
Representatives or Holders' Counsel may reasonably request in order to
facilitate the public sale or other disposition of such Registrable Shares.
3.16 DUSA shall provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration and provide the transfer agent with printed certificates for
Registrable Shares in a form eligible for deposit with The Depositary Trust
Company.
3.17 DUSA shall list such Registrable Shares on NASDAQ or such other
national securities exchange on which any shares of the Common Stock are listed
at the time of the effective date of the applicable Registration Statement. DUSA
shall cooperate and assist in any filings required to be made with the NASDAQ
Stock Market and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter" that is required
to be retained in accordance with the rules and regulations of the NASD).
3.18 DUSA shall use commercially reasonable efforts to take all other steps
necessary to file the registration of such Registrable Shares contemplated
hereby in accordance with the provisions of Section 2 hereof.
4. Obligations of the Participating Shareholders.
4.1 Prior to the first anticipated filing date of a Registration Statement,
DUSA shall notify Holders' Counsel in writing of the information DUSA requires
from each Participating
7
Shareholder whose Registrable Shares are to be included in such Registration
Statement. It shall be a condition precedent to the obligations of DUSA to
complete the registration pursuant to this Agreement with respect to the
Registrable Shares that each Participating Shareholder furnish to DUSA such
information regarding himself/herself/itself, the Registrable Shares held by
him/her/it and the intended method of disposition of the Registrable Shares held
by him/her/it as shall be reasonably required to effect the filing and
effectiveness of the registration of such Registrable Shares and shall execute
such documents in connection with such registration as DUSA may reasonably
request. Notwithstanding the foregoing, no Participating Shareholder shall be
required to make any representations, warranties or indemnities except as they
relate to such Participating Shareholder's ownership of shares and authority to
enter into the underwriting agreement and to such Participating Shareholder's
intended method of distribution, and the liability of such Participating shall
be limited to an amount equal to the net proceeds from the offering received by
such Participating Shareholder.
4.2 To the extent commercially reasonable, each Participating Shareholder,
by such Participating Shareholder's acceptance of the Registrable Shares, agrees
to cooperate with DUSA as reasonably required by DUSA in connection with the
preparation and filing of any Registration Statement hereunder.
4.3 Each Participating Shareholder agrees that, upon receipt of any notice
from DUSA of the happening of any event of the kind described in 3.6 or first
sentence of Section 3.5, such Participating Shareholder will immediately
discontinue disposition of Registrable Shares pursuant to any Registration
Statement(s) covering such Registrable Shares until such Participating
Shareholder's receipt of a copy of the supplemented or amended prospectus
contemplated by Section 3.5 or 3.6 or receipt of notice that no supplement or
amendment is required.
4.4 Each Participating Shareholder covenants and agrees that he/she/it will
comply with any applicable prospectus delivery requirements of the Securities
Act as applicable to him/her/it in connection with the sale of Registrable
Shares pursuant to any Registration Statement.
5. Expenses of Registration.
All expenses in preparing and filing any Registration Statement referred to
herein, or any amendment thereto, including, without limitation, reasonable fees
of Holders' Counsel, all registration, listing and qualification fees, printer
and accounting fees, fees of transfer agents and registrars, fees and
disbursements of counsel for DUSA, and all fees and expenses (including counsel
fees and disbursements) incurred in connection with complying with state
securities or "blue sky" laws shall be paid by DUSA. Fees and disbursements of
any [OTHER] counsel retained independently by a Participating Shareholder shall
be paid by such Participating Shareholder, respectively.
6. Indemnification.
In the event any Registrable Shares are included in a Registration
Statement under this Agreement:
8
6.1 DUSA shall indemnify, hold harmless and defend each Participating
Shareholder and the agents and representatives of each Participating
Shareholder, if any (each an "Indemnified Person") against any losses, claims,
damages or liabilities, including reasonable attorneys' fees (collectively,
"Indemnified Damages"), incurred by such Participating Shareholder in preparing
or defending any action, claim, suit, inquiry, proceeding, investigation or
appeal taken from the foregoing by or before any Governmental Body, whether
pending or threatened (collectively, "Claims"), to which any such Participating
Shareholder may become subject insofar as such Claims arise out of or are based
upon: (i) any untrue statement of a material fact in a Registration Statement or
any post-effective amendment thereto or in any filing required in connection
with the qualification of the offering under the securities or "blue sky" laws
of any jurisdiction in which Registrable Shares are offered, or the omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement of a material fact
contained in any preliminary prospectus if used prior to the Effective Date of
such Registration Statement, or contained in the final prospectus (as amended or
supplemented, if DUSA files any amendment thereof or supplement thereto with the
SEC) or the omission to state therein any material fact necessary to make the
statements made therein, in the light of the circumstances under which the
statements therein were made, not misleading, (iii) any violation by DUSA of the
Securities Act, the Exchange Act, any state securities law, any rule or
regulation thereunder, or any rule or regulation of any applicable securities
exchange relating to the offer or sale of the Registrable Shares pursuant to a
Registration Statement, or (iv) any material violation of this Agreement (the
matters in the foregoing clauses (i) through (iv) being, collectively,
"Violations"). Subject to Section 6.3, DUSA shall reimburse the Indemnified
Persons, for any reasonable legal fees or other reasonable expenses incurred by
them in connection with defending any such Claim. Notwithstanding anything to
the contrary contained herein, the indemnification agreement contained in this
Section 6.1 and the agreement with respect to contribution contained in Section
7: (i) shall not apply to a Claim arising out of or based upon a Violation which
occurs in reliance upon and in conformity with information furnished to DUSA by
or on behalf of such Indemnified Person for use in connection with the
preparation of any Registration Statement or any amendment thereof or supplement
thereto, (ii) with respect to any preliminary prospectus, shall not inure to the
benefit of any Indemnified Person from whom the Person asserting any such Claim
purchased the Registrable Shares that are the subject thereof (or to the benefit
of any Person controlling such Person) if the untrue statement or omission of
material fact contained in the preliminary prospectus was corrected in the
prospectus, as then amended or supplemented, and the Indemnified Person was
advised in writing not to use the incorrect prospectus prior to the use giving
rise to a Violation and such Indemnified Person, notwithstanding such advice,
used it or failed to deliver the correct prospectus as required by the
Securities Act, (iii) shall not be available to the extent such Claim is based
on a failure of the Participating Shareholder to deliver or to cause to be
delivered the prospectus made available by DUSA, including a corrected
prospectus, and (iv) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of DUSA, which
consent shall not be unreasonably withheld or delayed. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person.
6.2 In connection with any Registration Statement in which a Participating
Shareholder is participating, each such Participating Shareholder agrees to
indemnify, hold harmless and defend, to the same extent and in the same manner
as is set forth in Section 6.1,
9
DUSA, each of its directors, officers, employees, agents and representatives and
each Person, if any, who controls DUSA within the meaning of the Securities Act
or the Exchange Act (each, a "DUSA Indemnitee"), against any Claim for
Indemnified Damages to which any or all of them may become subject, under the
Securities Act, the Exchange Act, the securities or "blue sky" laws of any
jurisdiction or otherwise, insofar as such Claim or Indemnified Damages arise
out of or are based upon any Violation, in each case to the extent that such
Violation occurs in reliance upon, in connection with and/or in conformity with
information furnished to DUSA by or on behalf of such Participating Shareholder
and will reimburse any reasonable legal or other expenses reasonably incurred by
a DUSA Indemnitee in connection with defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 6.2 and the
agreement with respect to contribution contained in Section 7 shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of Participating Shareholder, which consent shall not
be unreasonably withheld or delayed; provided, further, however, that a
Participating Shareholder shall be liable under this Section 6.2 for only that
amount of Indemnified Damages as does not exceed the net proceeds to such
Participating Shareholder as a result of the sale of Registrable Shares pursuant
to such Registration Statement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such DUSA
Indemnitee. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6.2 with respect to any
preliminary prospectus shall not inure to the benefit of any DUSA Indemnitee if
the untrue statement or omission of material fact contained in the preliminary
prospectus was corrected on a timely basis in the prospectus, as then amended or
supplemented.
6.3 Promptly after receipt by an Indemnified Person or DUSA Indemnitee
under this Section 6 of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) involving a Claim, such
Indemnified Person or DUSA Indemnitee shall, if a Claim in respect thereof is to
be made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the DUSA Indemnitee, as the case may be; provided, however, that an Indemnified
Person or DUSA Indemnitee shall have the right to retain his/her/its own counsel
with the fees and expenses of not more than one counsel for such Indemnified
Person or DUSA Indemnitee to be paid by the indemnifying party. In the case of
an Indemnified Person, legal counsel referred to in the immediately preceding
sentence shall be selected by the Participating Shareholders of at least a
majority of the Registrable Shares included in the Registration Statement to
which the Claim relates. The DUSA Indemnitee or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any negotiation
or defense of any such action or Claim by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to the
DUSA Indemnitee or Indemnified Person which relates to such action or Claim. The
indemnifying party shall keep the DUSA Indemnitee or Indemnified Person fully
informed as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its prior written consent;
provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior
written consent of the DUSA Indemnitee
10
or Indemnified Person, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such DUSA Indemnitee or
Indemnified Person a release from all liability in respect to such Claim or
litigation. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the DUSA Indemnitee or
Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or DUSA Indemnitee under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.
6.4 The indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills and appropriate supporting documentation are
received.
6.5 The indemnity agreements contained herein shall be in addition to (i)
any cause of action or similar right of the DUSA Indemnitee or Indemnified
Person against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.
7. Contribution.
To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law; provided, however, that: (i) no Person
involved in the sale of Registrable Shares which Person is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) in
connection with such sale shall be entitled to contribution from any Person
involved in such sale of Registrable Shares who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any Shareholder of Registrable
Shares shall be limited in amount to the net amount of proceeds received by such
Shareholder under the Merger Agreement (or in the case of a Dissenting
Shareholder such other agreement(s) effectuating the transfer of Sirius Shares
to DUSA) from the sale of such Registrable Shares pursuant to such Registration
Statement.
8. Reports Under the Exchange Act.
With a view to making available to Participating Shareholders the benefits
of Rule 144 promulgated under the Securities Act or any other similar rule or
regulation of the SEC that may at any time permit the Participating Shareholders
to sell DUSA Shares to the public without registration ("Rule 144"), DUSA agrees
to:
8.1 make and keep public information available, as those terms are
understood and defined in Rule 144;
8.2 file with the SEC in a timely manner all reports and other documents
required of DUSA under the Securities Act and the Exchange Act; and
11
8.3 furnish to Holders' Counsel on behalf of each Participating Shareholder
of Registrable Shares, promptly upon request, (i) a written statement by DUSA,
if true, that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting) or that it qualifies as a registrant whose securities may be
resold pursuant to Form S-3 (at any time it so qualifies), (ii) a copy of the
most recent annual or quarterly report of DUSA and such other reports and
documents so filed by DUSA, if not otherwise available on XXXXX, and (iii) such
other information as may be reasonably requested to permit the Participating
Shareholders to sell such securities pursuant to any rule or regulation of the
SEC which permits the selling of any securities without registration.
9. Amendment; Waiver.
9.1 Except as set forth in Section 9.2 and Section 10, this Agreement may
be terminated, amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of DUSA and the Participating
Shareholders holding a majority of the Registrable Shares.
9.2 Any terminating amendment or waiver effected in accordance with this
Section 9 shall be binding upon each Participating Shareholder and DUSA. No
amendment shall be effective unless it applies to all of the Participating
Shareholders. No consideration shall be offered or paid to any Person to
terminate, amend or consent to a waiver or modification of any provision of any
of this Agreement unless the same consideration also is offered to all of the
parties to this Agreement.
10. Termination. This Agreement shall terminate upon the earlier of (i) the date
on which the Principal Shareholders may sell or otherwise transfer all of the
Registrable Shares pursuant to Rule 144, without regard to the volume limitation
of such Rule, (ii) the date on which the Principal Shareholders shall have
disposed of all the Registrable Shares, and (iii) the date of any termination by
DUSA and certain Principal Shareholders in accordance with Section 9.1 hereof.
11. Miscellaneous.
11.1 A Person is deemed to be a Principal Shareholder of Registrable Shares
whenever such Person owns or is deemed to own of record, or has the right to own
pursuant to the terms and conditions of the Merger Agreement, such Registrable
Shares. If DUSA receives conflicting instructions, notices or elections from two
or more Persons with respect to the same Registrable Shares, DUSA shall act upon
the basis of instructions, notice or election received from the record owner of
such Registrable Shares.
11.2 Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally, (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party), or (iii) one Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same, assuming written confirmation from such overnight
delivery service has been received. All communications to a Participating
Shareholder shall be made by providing notice to the
12
Shareholders' Representative(s) appointed pursuant to the Merger Agreement. The
addresses and facsimile numbers for such communications to DUSA and the
Shareholders' Representative(s) shall be as provided for in the Merger
Agreement. The address and facsimile number for communications to Holders'
Counsel shall be provided to DUSA and its counsel in accordance with this
Section as soon as practicable following the selection of Holders' Counsel.
Written confirmation of receipt: (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission, or (C)
provided by a nationally recognized overnight delivery service, shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from a
nationally recognized overnight delivery service in accordance with subclause
(i), (ii) or (iii) above, respectively.
11.3 Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
11.4 This Agreement shall be governed by the laws of the State of New York
without regard to conflicts of laws principles. Any action or proceeding seeking
to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the Parties in the courts of the State
of New York, or, if it has or can acquire jurisdiction, in the United States
District Court for the Southern District of New York, and each of the Parties
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding
sentence may be served on any party anywhere in the world.
11.5 This Agreement, the Merger Agreement and the instruments referenced
herein and therein constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein and therein. This Agreement, the Merger Agreement and the instruments
referenced herein and therein supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.
11.6 The rights to cause DUSA to register Registrable Securities pursuant
to this Agreement may be assigned in whole or in part by a Participating
Shareholder to one or more of its Affiliates (including, without limitation, in
the case of Participating Shareholders, transfers between them and to their
respective members and partners and any members or partners thereof) or to one
or more transferees or assignees of the Registrable Securities owned by such
Participating Shareholder, provided that (in each case) such transferee or
assignee delivers to the DUSA a written instrument by which such transferee or
assignee agrees to be bound by the obligations imposed on Participating
Shareholders under this Agreement to the same extent as if such transferee or
assignee was a party hereto; provided, further, such assignment shall not
require registration under the Securities Act. Except a specifically permitted
in the preceding sentence, neither this Agreement nor any Participating
Shareholder's rights or privileges under this Agreement can be assigned or
transferred in whole or in part without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement will apply to, be
binding in all respects upon, and inure to the benefit of the successors, heirs,
devisees, personal
13
representatives and permitted assigns of the parties. Nothing expressed or
referred to in this Agreement will be construed to give any Person other than
the parties to this Agreement and their respective heirs, devisees, personal
representatives any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and exclusive benefit of
the Parties to this Agreement and their successors, heirs, devisees, personal
representatives and permitted assigns.
11.7 The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
11.8 This Agreement may be executed in identical counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a Party, may be delivered to
the other Party hereto by facsimile transmission bearing the signature of the
Party so delivering this Agreement.
11.9 Each Party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other Party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
11.10 All consents and other determinations required to be made by the
Participating Shareholders pursuant to this Agreement shall be made, unless
otherwise specified in this Agreement, by Participating Shareholders holding at
least a majority of the Registrable Shares.
11.11 This Agreement is intended for the benefit of the Parties hereto and
their respective successors and permitted assigns, and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person.
11.12 Any disputes arising hereunder shall be subject to the provisions
contained in Article XVI of the Merger Agreement as if such provisions were set
forth herein.
* * * * * *
14
IN WITNESS WHEREOF, the Parties have executed and delivered this
Registration Rights Agreement, or have cause this Registration Rights Agreement
to be executed and delivered by a duly authorized representative, as of the date
first written above.
DUSA PHARMACEUTICALS, INC.
By: /s/ D. Xxxxxxxx Xxxxxxx
------------------------------------
Name: D. Xxxxxxxx Xxxxxxx
Title: Chairman and CEO
SHAREHOLDERS:
----------------------------------------
Xxxxxx Xxxxxxxxx
----------------------------------------
Xxxxx Xxxxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxxxx Ph.D.
----------------------------------------
Xxxx Xxxxxxxxx, M.D.
----------------------------------------
Xxxxx X. Xxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxx, Xx.
----------------------------------------
Xxxx X. Xxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxx
----------------------------------------
Xxxxxxx Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx
----------------------------------------
Xxxxxx Xxxxxx
----------------------------------------
Xxxxxxxxx Xxxxxxx
----------------------------------------
Xxxxx Xxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxx
Shareholder Representatives, on behalf
of each of the Participating
Shareholders listed on Schedule A
attached hereto pursuant to
powers-of-attorney included in duly
executed Subscription Agreements
delivered by each Participating
Shareholder:
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Xxxxx X. Xxxxxxx
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxxx Ph.D.
[Signature Page to Registration Rights Agreement]
Schedule A
Participating Shareholders Pursuant to Powers-of-Attorney
SCHEDULE A
SCHEDULE OF PARTICIPATING SHAREHOLDERS
Xxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx JTWROS Xxxx Xxxxxxxxx, M.D.
Xxxxxx Xxxxxxxxx Xxxxx Xxxxxxxxx
Bioglan Pharma PLC Xxxxx X. Xxxxxxx, Xx.
Xxxxxxx Xxxxxx Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx Xxxxx Xxxxxxx, M.D.
Xxxxxxxxx Xxxxxxx Madakat Capital Ventures, LLC
Saeed Xxxxxxx Xxxx Xxxxxx Xxxxxx Xx.
Xxxxx X. Xxxxxx and Xxxxxx Xxxxxx JTWROS Xxxxxxx X. Xxxxxxxxx, M.D.
Xxxxxx Xxxxxx and Xxxxx X. Xxxxxx JTWROS Xxxx Xxxxxxx
Xxxxx Xxxxxxxx, M.D. Xxxxxx Xxxxxxx
Xxxx Xxxxxxx, M.D. Xxxxxxx Xxxxx, M.D.
Xxxxxx Xxxxxxx Xxxx Xxxxx
Xxxxxx Xxxxxxx Xxxxxx X. XxXxxxxxx
Xxxxxxxx X. Xxxxxx Xxxxxx Xxxxxx and Xxxxxx Xxxxxx JTWROS
Xxxxxxxx X Xxxxxx, M.D. XXX Xxxxxx Xxxxxx and Xxxxxx Xxxxxx JTWROS
Maibach Trust Xxxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxx Xxxxxxxx
Xxxxxx Xxxxxx Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxx Xxxxxx Xxxxxx Xxxxxx and Xxxxxxxx Xxxxxx, JTWROS
Xxxxx Xxxxxxx Xxxxxxxx Xxxxxx and Xxxxxx Xxxxxx Xxxxxx JTWROS
Xxxxxxxx Xxxxx Xxxxxx Xxxxxx Xxxx Xxxxxx
Xxxxx Xxxxxx Xxxxx Xxxxxx
A-1
Xxxxxx Xxxxxx Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxxx Xxxxx Xxxx, M.D.
Xxxx Xxxxxx
OPTION HOLDERS
Xxxxxxx Xxxxx Xxxxx Xxxxx
Xxxxx Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx Xxxxxxx Xxxxxxxx
Xxxxxx Xxxxxxx Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxxxxx Xxxxx Xxxxxxxxx
Xxxxx Xxxxxx Xxxxxx Xxxxxxx
Xxxxx Xxxxxxxxx Xxxx Xxxxxxxx
Xxxxx Xxxx Xxxxxxx Xxxxxxx
Xxxxxxxx Xxxxx Xxxxx Xxxxx
Xxxxx XxXxxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxx Xxxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxx Xxxxxx Xxxxxx
Xxxxx Xxxxxxxx Xxxxx Xxxxxx
Xxxx Xxxxx Xxxxxxx Xxxx
Xxxxxxx Xxxxxxx Xxxxxx Xxxx
Xxxxxx Xxxxxx Xxxxxxx Xxxx
Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxx Xxxxxxxx Xxxxxxxx Xxxxxxxx
Xxxxx Xxxxxx Xxxxxx Xxxx
A-2
Xxxxx Xxxxxx Xxxxxxx Xxxxxxxx
Xxxxxxxx Xxxxxx Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx Xxxxxx Xxxxxxx
Xxxxxxx Xxxxx Xxxxxx Xxxxx
Xxxx Xxxxx Xxxx Xxxxxxxxxxx
Xxxxxx Xxxx Xxxx Xxxxx
Xxxxxx Xxxxx Xxxx Xxxxxxx
Xxxxx Xxxxxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxx Xxxx Xxxxxxxxxx
Xxxxxxx Xxxx Xxxx Xxxx
Xxxxx Xxxxxx Xxxxx Xxxxxx
Xxxx Xxxxx Xxxx Xxxxxxx
Xxxxxxx Xxxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx Xxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx Xxxxx Xxxxxx
Xxxxx Van Dam Xxx Xxxxxxxx
Xxxxx Xxxxxxxxx Xxxxxxxx Xxxxxxx Xxxxxxxxxxxx
Xxxxxxxx Xxxxxxx Xxxxxx Xxxxx
A-3
