EXECUTION COPY
DOV PHARMACEUTICAL, INC.
2.50% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2025
REGISTRATION RIGHTS AGREEMENT
December 22, 2004
Citigroup Global Markets Inc.
Banc of America Securities LLC
CIBC World Markets Corp.
As Representatives of the Initial Purchasers
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
DOV Pharmaceutical, Inc., a corporation organized under the laws of
Delaware (the "Company"), proposes to issue and sell to certain purchasers (the
"Initial Purchasers"), for whom you (the "Representatives") are acting as
representatives, its 2.50% Convertible Subordinated Debentures Due 2025 (the
"Securities"), upon the terms set forth in the Purchase Agreement between the
Company and the Initial Purchasers dated December 16, 2004 (the "Purchase
Agreement") relating to the initial placement (the "Initial Placement") of the
Securities. The Securities will be convertible into fully paid, nonassessable
shares of common stock, par value $0.0001 per share, of the Company (the "Common
Stock") on the terms, and subject to the conditions, set forth in the Indenture
(as defined herein). To induce the Initial Purchasers to enter into the Purchase
Agreement and to satisfy a condition to your obligations thereunder, the Company
agrees with you for your benefit and the benefit of the holders from time to
time of the Securities and the Common Stock issued upon conversion of the
Securities (including the Initial Purchasers) (each a "Holder" and,
collectively, the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following capitalized defined terms shall have the
following meanings:
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 405 under the
Act and the terms "controlling" and "controlled" shall have meanings correlative
thereto.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Closing Date" shall mean the date of the first issuance of the
Securities.
"Commission" shall mean the Securities and Exchange Commission.
"Damages Payment Date" shall mean each Interest Payment Date.
"Deferral Period" shall have the meaning indicated in Section 3(h)
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Final Memorandum" shall mean the offering memorandum, dated
December 16, 2004, relating to the Securities, including any and all exhibits
thereto and any information incorporated by reference therein as of such date.
"Holder" shall have the meaning set forth in the preamble hereto.
"Indenture" shall mean the Indenture relating to the Securities,
dated as of December 22, 2004, between the Company and Xxxxx Fargo Bank,
National Association, as trustee, as the same may be amended from time to time
in accordance with the terms thereof.
"Initial Placement" shall have the meaning set forth in the preamble
hereto.
"Initial Purchasers" shall have the meaning set forth in the
preamble hereto.
"Interest Payment Date" shall have the meaning set forth in the
Indenture.
"Liquidated Damages" shall have the meaning set forth in Section 7
hereof.
"Losses" shall have the meaning set forth in Section 5(d) hereof.
"Majority Holders" shall mean, on any date, Holders of a majority of
the then outstanding shares of Common Stock constituting Registrable Securities
(with Holders of Securities deemed to be Holders, for purposes of this
definition, of the number of outstanding shares of Common Stock into which such
Securities would be convertible as of such date).
"Managing Underwriters" shall mean the investment banker or
investment bankers and manager or managers that administer an underwritten
offering, if any, conducted pursuant to Section 6 hereof.
"Notice and Questionnaire" shall mean a written notice delivered to
the Company substantially in the form attached as Annex A to the Final
Memorandum.
"Notice Holder" shall mean, on any date, any Holder of Registrable
Securities that has delivered a completed and executed Notice and Questionnaire
and any other information reasonably requested by the Company pursuant to
Section 3(l) hereof to the Company on or prior to such date.
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"Prospectus" shall mean a prospectus included in the Shelf
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A under the Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Shelf Registration Statement, and all amendments and supplements thereto,
including any and all exhibits thereto and any information incorporated by
reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble hereto.
"Record Holder" shall mean with respect to any Damages Payment Date,
each person who is a Holder on the record date with respect to the Interest
Payment Date on which such Damages Payment Date shall occur.
"Registrable Securities" shall mean Securities and each share of
Common Stock issued upon conversion of Securities other than those that have
been (i) registered under the Shelf Registration Statement and disposed of in
accordance therewith, (ii) distributed to the public pursuant to Rule 144 under
the Act or any successor rule or regulation thereto that may be adopted by the
Commission, or (iii) are eligible to be sold by non-Affiliates of the Company to
the public pursuant to Rule 144(k) under the Act or any successor rule or
regulation thereto that may be adopted by the Commission.
"Registration Default" shall have the meaning set forth in Section 7
hereof.
"Securities" shall have the meaning set forth in the preamble
hereto.
"Shelf Registration Period" shall have the meaning set forth in
Section 2(c) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2 hereof which
covers some or all of the Registrable Securities on an appropriate form under
Rule 415 under the Act, or any similar rule that may be adopted by the
Commission, amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Special Counsel" means Xxxxx Xxxx & Xxxxxxxx or one such other
successor counsel as shall be specified by the Majority Holders, but which may,
with the written consent of the Initial Purchasers, be another nationally
recognized law firm experienced in securities law matters designated by the
Company.
"Trustee" shall mean the trustee with respect to the Securities
under the Indenture.
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"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"underwriter" shall mean any underwriter of Registrable Securities
in connection with an offering thereof under the Shelf Registration Statement.
2. Shelf Registration. (a) The Company shall use it reasonable best
efforts to file within 100 days after the Closing Date with the Commission a
Shelf Registration Statement providing for the registration of, and the sale on
a continuous or delayed basis by the Holders of, all of the Registrable
Securities, from time to time in accordance with the methods of distribution
elected by such Holders, pursuant to Rule 415 under the Act or any similar rule
that may be adopted by the Commission.
(b) The Company shall use its reasonable best efforts to cause the
Shelf Registration Statement to become or be declared effective under the Act as
promptly as practicable (but in no event more than 240 days after the Closing
Date).
(c) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective, supplemented and amended as
required by the Act, in order to permit the Prospectus forming part thereof to
be usable by Holders for a period (the "Shelf Registration Period") from the
date the Shelf Registration Statement is declared effective by the Commission
until the earlier of (i) the date upon which there are no Registrable Securities
outstanding, (ii) the date as of which all the Registrable Securities have been
sold either under Rule 144 under the Act (or any similar provision then in
force) or pursuant to the Shelf Registration Statement, or (iii) the date on
which all Registrable Securities held by non-Affiliates are eligible to be sold
to the public pursuant to Rule 144(k) under the Act or any successor provision.
(d) The Company shall cause the Shelf Registration Statement and the
related Prospectus and any amendment or supplement thereto, as of the effective
date of the Shelf Registration Statement or such amendment or supplement, (i) to
comply in all material respects with the applicable requirements of the Act; and
(ii) not to contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading.
(e) At the time the Shelf Registration Statement is declared to be
effective, each Holder that became a Notice Holder on or prior to the tenth
Business Day prior to such time of effectiveness shall be named as a selling
securityholder in the Shelf Registration Statement and the related Prospectus in
such a manner as to permit such Holder to deliver such Prospectus to purchasers
of Registrable Securities in accordance with applicable law, subject to the
terms and conditions hereof. Following the date that the Shelf Registration
Statement is declared effective, each Holder that is not a Notice Holder wishing
to sell Registrable Securities pursuant to a Shelf Registration Statement and
related Prospectus agrees to deliver a Notice and Questionnaire (and such other
information as is required by Section 3(l)) to the Company prior to any intended
distribution by it of Registrable Securities under the Shelf Registration
Statement. From and after the date the Shelf Registration Statement is declared
effective and during the
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Shelf Registration Period (but excluding any Deferral Period), the Company shall
as promptly as is reasonably practicable after the date a Notice and
Questionnaire (and such other information as is required by Section 3(l)) is
delivered, and in any event within the later of (x) 15 Business Days after such
date or (y) 15 Business Days after the expiration of any Deferral Period in
effect when the Notice and Questionnaire (and such other information as is
required by Section 3(l)) is delivered, file a supplement to the Shelf
Registration Statement and related Prospectus as is necessary and permitted to
name such Holder as a selling securityholder or if not permitted to name such
Holder as a selling securityholder by supplement, file any necessary
post-effective amendments to the Shelf Registration Statement or prepare and, if
required by applicable law, file an amendment or supplement to any document
incorporated by reference or file any other required document so that such
Holder is named as selling securityholder, and use its reasonable best efforts
to cause such post-effective amendment to be declared effective under the Act as
promptly as practicable, but in no event later than the date (the "Amendment
Effectiveness Deadline Date") that is 45 days after the date such post-effective
amendment is required to be filed; provided that the Company shall not be
obligated to file more than one post-effective amendment in any 60-day period.
In connection with such filing, the Company agrees to:
(i) provide such Holder copies of any documents filed pursuant
to Section 2(e) hereof; and
(ii) notify such Holder as promptly as reasonably practicable
after the effectiveness under the Act of any post-effective
amendment filed pursuant to Section 2(e) hereof.
Notwithstanding anything contained herein to the contrary, the Company shall be
under no obligation to name any Holder that is not a Notice Holder as a selling
securityholder in the Shelf Registration Statement or related Prospectus;
provided, however, that any Holder that becomes a Notice Holder pursuant to the
provisions of this Section 2(e) (whether or not such Holder was a Notice Holder
at the time the Shelf Registration Statement was declared effective) shall be
named as a selling securityholder in the Shelf Registration Statement or related
Prospectus in accordance with the requirements of this Section 2(e).
3. Registration Procedures. The following provisions shall apply in
connection with the Shelf Registration Statement.
(a) The Company shall:
(i) furnish to the Representatives and to the Special Counsel,
not less than five Business Days (or three Business Days for
documents to be filed pursuant to Section 2(e) hereof) prior to the
filing with the Commission a copy of the Shelf Registration
Statement and each amendment thereof and each amendment or
supplement, if any, to the Prospectus included therein (excluding
all documents incorporated by reference therein after the initial
filing, unless specifically requested in writing) and shall use its
reasonable best efforts to reflect in each such document, when so
filed with the Commission, such comments as the Representatives
reasonably propose; and
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(ii) include information regarding the Notice Holders and the
methods of distribution they have elected for their Registrable
Securities provided to the Company in Notices and Questionnaires as
necessary to permit such distribution by the methods specified
therein.
(b) The Company shall give notice to the Representatives, the Notice
Holders and, subject to Section 6 hereof, any underwriter that has provided in
writing to the Company a telephone or facsimile number and address for notices,
and confirm such advice by notice in writing (which notice pursuant to clauses
(ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the
Prospectus until the Company shall have remedied the basis for such suspension):
(i) when the Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has
become effective;
(ii) of any request by the Commission for any amendment or
supplement to the Shelf Registration Statement or the Prospectus or
for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or
the institution of any proceeding for that purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable
Securities included therein for sale in any jurisdiction or the
institution of any proceeding for such purpose; and
(v) of the happening of any event that requires any change in
the Shelf Registration Statement or the Prospectus so that, as of
such date, they (A) do not contain any untrue statement of a
material fact and (B) do not omit to state a material fact required
to be stated therein or necessary to make the statements therein (in
the case of the Prospectus, in the light of the circumstances under
which they were made) not misleading.
(c) The Company shall use its reasonable best efforts to prevent the
issuance of any order suspending the effectiveness of the Shelf Registration
Statement or the qualification of the securities therein for sale in any
jurisdiction, and if issued, to obtain as soon as reasonably possible the
withdrawal thereof.
(d) The Company shall furnish to each Notice Holder, without charge, at
least one copy of the Shelf Registration Statement and any post-effective
amendment thereto, and, if a Notice Holder so requests in writing, all material
incorporated therein by reference and all exhibits thereto (including exhibits
incorporated by reference therein).
(e) During the Shelf Registration Period, the Company shall promptly
deliver to each Initial Purchaser, each Notice Holder, and, subject to Section 6
hereof, any sales or placement agents or underwriters acting on their behalf,
without charge, as many copies of the Prospectus (including the preliminary
Prospectus) included in the Shelf Registration Statement and any amendment or
supplement thereto as any such person may reasonably request. The Company
consents to the use of the Prospectus or any amendment or supplement thereto by
each of the foregoing in connection with the offering and sale of the
Registrable Securities in the manner set forth therein (except during any
Deferral Period, as defined below).
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(f) Prior to any offering of Registrable Securities pursuant to the Shelf
Registration Statement, the Company shall use its reasonable best efforts to
arrange for the qualification of the Registrable Securities for sale under the
laws of such jurisdictions as any Notice Holder shall reasonably request and
shall use its reasonable best efforts to maintain such qualification in effect
for so long as required; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not then so
qualified or to take any action in connection therewith that would subject it to
taxation or service of process in suits, other than those arising out of the
Initial Placement, in any jurisdiction where it is not then so subject.
(g) Upon the occurrence of any event contemplated by subsections (b)(ii)
through (v) above, the Company shall as promptly as reasonably practicable (or
within the time period provided for by Section 3(h) hereof, if applicable)
prepare a post-effective amendment to the Shelf Registration Statement or an
amendment or supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to purchasers of the securities
included therein, the Prospectus will not include an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(h) The Company may suspend each Holder's use of the Shelf Registration
and any Prospectus for a maximum of 45 days in any 90-day period, and not to
exceed an aggregate of 90 days in any 12 month period, if (i) the Company, in
its reasonable judgment, believes it may possess material non-public information
the disclosure of which would be seriously detrimental to the Company and its
subsidiaries taken as a whole or (ii) the Shelf Registration Statement and any
Prospectus would, in the Company's judgment, contain a material misstatement or
omission as a result of an event that has occurred or is continuing. However, if
the disclosure relates to a proposed or pending material business transaction,
the disclosure of which the Company determines in good faith would be reasonably
likely to impede its ability to consummate such transaction, or would otherwise
be seriously detrimental to the Company and its subsidiaries taken as a whole,
the Company may extend the suspension period from 45 days to 60 days. Any
suspension period described in this Section 3(h) shall be referred to herein as
the "Deferral Period." The Company shall give notice to the Notice Holders that
the availability of the Shelf Registration is suspended and upon notice duly
given pursuant to Section 10 hereof, each Notice Holder agrees not to sell any
Registrable Securities pursuant to the Shelf Registration until such Notice
Holder's receipt of copies of the supplemented or amended Prospectus provided
for in Section 3(h) hereof, or until it is advised in writing by the Company
that the Prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such Prospectus. The Company need not specify the nature of the event giving
rise to a suspension in any notice to holders of the Securities of the existence
of such a suspension.
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(i) Not later than the effective date of the Shelf Registration Statement,
the Company shall provide a CUSIP number for the Registrable Securities
registered under the Shelf Registration Statement and, if required, provide the
Trustee with printed certificates for such Securities, free of any restrictive
legends, in a form eligible for deposit with The Depository Trust Company.
(j) The Company shall comply with all applicable rules and regulations of
the Commission and shall make generally available to its security holders an
earnings statement satisfying the provisions of Section 11(a) of the Act as soon
as practicable after the effective date of the Shelf Registration Statement and
in any event no later than 45 days after the end of a 12-month period (or 90
days, if such period is a fiscal year) beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the Shelf
Registration Statement.
(k) The Company shall cause the Indenture to be qualified under the Trust
Indenture Act in a timely manner.
(l) The Company may require each Holder of Registrable Securities to be
sold pursuant to the Shelf Registration Statement to deliver to the Company a
completed and executed Notice and Questionnaire and to furnish to the Company
such other information regarding the Holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably require
for inclusion in the Shelf Registration Statement. The Company may exclude (i)
from the initial Shelf Registration Statement the Registrable Securities of any
Holder that fails to return a completed and executed Notice and Questionnaire
and fails to furnish such other information no later than ten Business Days
before the initial effectiveness of the Shelf Registration Statement and (ii)
from any post-effective amendment or supplement the Registrable Securities of
any Holder that fails to return a completed and executed Notice and
Questionnaire and fails to furnish such other information no later than 15
Business Days before the date of filing any post-effective amendment or
supplement to the Shelf Registration Statement contemplated by Section 2(e)(i),
as applicable.
(m) Subject to the provisions of Section 6 hereof, the Company shall enter
into customary agreements (including, if requested, an underwriting agreement in
customary form, including customary indemnification provisions and procedures)
and take all other appropriate actions as reasonably requested by the Notice
Holders in order to expedite or facilitate the registration or the disposition
of the Registrable Securities.
(n) The Company shall (subject to reasonable confidentiality restrictions
as may be requested by the Company):
(i) make reasonably available for inspection during normal
business hours by the Notice Holders of Registrable Securities to be
registered thereunder, any underwriter participating in any
disposition pursuant to the Shelf Registration Statement, and any
attorney, accountant or other agent retained by the Holders or any
such underwriter all relevant financial and other records and
pertinent corporate documents of the Company and its subsidiaries;
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(ii) cause the Company's officers, directors, employees,
accountants and auditors to supply all relevant information
reasonably requested by the Notice Holders or any such underwriter,
attorney, accountant or agent in connection with any the Shelf
Registration Statement as is customary for similar due diligence
examinations; provided that the inspection and information gathering
pursuant to clause (i) and (ii) shall be coordinated by a single
party (or a single counsel (which shall be the Special Counsel) on
behalf of the parties so inspecting and gathering);
(iii) make such representations and warranties to the Holders
of Registrable Securities registered thereunder and the underwriters
in form, substance and scope as are customarily made by issuers to
underwriters in primary underwritten offerings;
(iv) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the Managing Underwriters, if
any) addressed to each selling Holder, if reasonably requested, and
the underwriters, if any, covering such matters as are customarily
covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such Holders and
underwriters;
(v) obtain "comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company
for which financial statements and financial data are, or are
required to be, included in the Shelf Registration Statement),
addressed to the underwriters, if any, in customary form and
covering matters of the type customarily covered in "comfort"
letters in connection with primary underwritten offerings; and
(vi) deliver such documents and certificates as may be
reasonably requested by the Majority Holders or the Managing
Underwriters, if any, including those to evidence compliance with
any customary conditions contained in the underwriting agreement or
other agreement entered into by the Company.
Notwithstanding the foregoing, the actions set forth in clauses (iii), (iv), (v)
and (vi) of this paragraph (n) shall only be performed in connection with an
underwritten offering pursuant to Section 6 hereof and only if requested by the
underwriters thereof.
(o) The Company shall cooperate and assist in any filings required
to be made with the National Association of Securities Dealers, Inc. (the
"NASD") and in the performance of any due diligence investigation by any
underwriter that is required to be retained in accordance with the rules and
regulations of the NASD.
(p) The Company shall upon (i) the filing of the initial Shelf
Registration Statement and (ii) the effectiveness of the initial Shelf
Registration Statement, announce the same, in each case by release to the PR
Newswire. Notwithstanding Section 10 hereof, the making of the announcement as
set forth in this Section 3(p) shall be deemed to satisfy the notice
requirements of Section 3(b)(i) hereof with respect to the filing or
effectiveness of the initial Shelf Registration Statement.
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(q) The Company shall use its reasonable best efforts to take such
other steps as are necessary to effect the registration of the Registrable
Securities for resales under the Act.
4. Registration Expenses. The Company shall bear all expenses
incurred in connection with the performance of its obligations under Sections 2
and 3 hereof and shall reimburse the Holders for the reasonable fees and
disbursements of one firm or counsel (which shall be the Special Counsel) to act
as counsel for the Holders in connection therewith. The Holders will bear their
individual selling expenses, including commissions and discounts and transfer
taxes.
5. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Holder of Registrable Securities covered by the
Shelf Registration Statement, each Initial Purchaser, the directors, officers,
employees, Affiliates and agents of each such Holder or Initial Purchaser and
each person who controls any such Holder or Initial Purchaser within the meaning
of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Shelf Registration Statement or in any amendment thereof,
in each case at the time such became effective under the Act, or in any
preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of any preliminary
Prospectus or the Prospectus, in the light of the circumstances under which they
were made) not misleading, and agrees to reimburse each such indemnified party,
as incurred, for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the party claiming indemnification specifically for inclusion therein. This
indemnity agreement shall be in addition to any liability that the Company may
otherwise have.
(b) Each Holder of securities covered by the Shelf Registration
Statement (including each Initial Purchaser that is a Holder, in such capacity)
severally and not jointly agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers who signs the Shelf Registration
Statement and each person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Company to each such Holder, but only with reference to written information
relating to such Holder furnished to the Company by or on behalf of such Holder
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement shall be acknowledged by each Notice Holder
that is not an Initial Purchaser in such Notice Holder's Notice and
Questionnaire and shall be in addition to any liability that any such Notice
Holder may otherwise have.
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(c) Promptly after receipt by an indemnified party under this
Section 5 or notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 5, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses;
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel (including local counsel) of the indemnifying party's choice
at the indemnifying party's expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying party
shall not thereafter be responsible for the fees and expenses of any separate
counsel, other than local counsel if not appointed by the indemnifying party,
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel
(including local counsel) to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest; (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party; (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action; or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party shall
have a joint and several obligation to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending loss, claim, liability,
damage or action) (collectively "Losses") to which such indemnified party may be
subject in such proportion as is appropriate to reflect the relative benefits
received by such indemnifying party, on the one hand, and such indemnified
party, on the other hand, from the Initial Placement and
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the Shelf Registration Statement which resulted in such Losses; provided,
however, that in no case shall any Initial Purchaser be responsible, in the
aggregate, for any amount in excess of the purchase discount or commission
applicable to such Security received by such Initial Purchaser in connection
with the Initial Placement, nor shall any underwriter be responsible for any
amount in excess of the underwriting discount or commission applicable to the
securities purchased by such underwriter under the Shelf Registration Statement
which resulted in such Losses. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the indemnifying party and the
indemnified party shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party, on the other
hand, in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from the
Initial Placement (before deducting expenses) as set forth in the Final
Memorandum. Benefits received by the Initial Purchasers shall be deemed to be
equal to the total purchase discounts and commissions received in connection
with the Initial Placement, and benefits received by any other Holders shall be
deemed to be equal to the value of receiving Securities registered under the
Act. Benefits received by any underwriter shall be deemed to be equal to the
total underwriting discounts and commissions, as set forth on the cover page of
the Prospectus forming a part of the Shelf Registration Statement which resulted
in such Losses. Relative fault shall be determined by reference to, among other
things, whether any untrue or any alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
provided by the indemnifying party, on the one hand, or by the indemnified
party, on the other hand, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The parties agree that it would not be just and
equitable if contribution were determined by pro rata allocation (even if the
Holders were treated as one entity for such purpose) or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 5, each person who
controls a Holder within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of such Holder shall have the same
rights to contribution as such Holder, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Shelf Registration Statement and each director
of the Company shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this paragraph
(d).
(e) The provisions of this Section 5 shall remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder or
the Company or any of the indemnified persons referred to in this Section 5, and
shall survive the sale by a Holder of Registrable Securities covered by the
Shelf Registration Statement.
6. Underwritten Registrations. (a) Notwithstanding anything to the
contrary in this Agreement, the Registrable Securities may be sold in an
underwritten offering only with the consent of the Company, and, in such event,
the Managing Underwriters shall be selected by the Majority Holders and shall be
reasonably acceptable to the Company.
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(b) No person may participate in any underwritten offering pursuant
to the Shelf Registration Statement unless such person (i) agrees to sell such
person's Registrable Securities on the basis reasonably provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements; (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements; and (iii) agrees to
be responsible for their individual selling expenses, including commissions and
discounts and transfer taxes.
7. Registration Defaults. (a) If:
(i) the Shelf Registration Statement is not filed with the
Commission on or prior to the 100th day following the Closing Date;
or
(ii) the Shelf Registration Statement is not declared
effective by the Commission on or prior to the 240th day following
the Closing Date; or
(iii) the Company has failed to perform its obligations set
forth in Section 2(e) within the time required therein; or
(iv) any post-effective amendment to a Shelf Registration
Statement filed pursuant to Section 2(e) has not become effective
under the Securities Act on or prior to the Amendment Effectiveness
Deadline Date; or
(v) the aggregate duration of Deferral Periods in any period
exceeds the number of days permitted in respect of such period
pursuant to Section 3(i) hereof (in each case except as the result
of filing a post-effective amendment solely to add additional
selling securityholders);
(each such event referred to in the foregoing clauses (i) through (v), a
"Registration Default"), the Company hereby agrees to pay liquidated damages
("Liquidated Damages") with respect to the Registrable Securities that are
Securities from and including the day following the Registration Default to but
excluding the earlier of (1) the day after the end of the Shelf Registration
Period and (2) the day on which the Registration Default has been cured:
(A) with respect to the first 90-day period during which
a Registration Default shall have occurred and be continuing,
in an amount per year equal to an additional 0.25% of the
principal amount of the Registrable Securities; and
(B) with respect to the period commencing on the 91st
day following the day the Registration Default shall have
occurred and be continuing, in an amount per year equal to an
additional 0.50% of the principal amount of the Registrable
Securities;
provided, however, that in no event shall Liquidated Damages accrue at a rate
per year exceeding 0.50% of the principal amount of the Securities. For the
avoidance of doubt, Holders of Registrable Securities that are shares of Common
Stock shall not be entitled to Liquidated Damages.
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(b) All accrued Liquidated Damages shall be paid in arrears to
Record Holders by the Company on each Damages Payment Date by wire transfer of
immediately available funds or by federal funds check. Following the cure of all
Registration Defaults relating to any particular Registrable Securities, the
accrual of Liquidated Damages with respect to such Registrable Securities will
cease.
All obligations of the Company set forth in this Section 7 that are
outstanding with respect to any Registrable Securities at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such Registrable Security shall have been satisfied
in full.
The parties hereto agree that the Liquidated Damages provided for in this
Section 7 constitute a reasonable estimate of the damages that may be incurred
by Holders of Registrable Securities by reason of a Registration Default and
that such Liquidated Damages are the only monetary damages available to such
Holders with respect to a Registration Default.
8. No Inconsistent Agreements. The Company has not entered into, and
agrees not to enter into, any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders herein or that otherwise
conflicts with the provisions hereof.
9. Amendments and Waivers. The provisions of this Agreement may not
be amended, qualified, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the Company has
obtained the written consent of the Holders of a majority of the then
outstanding shares of Common Stock constituting Registrable Securities (with
Holders of Securities deemed to be Holders, for purposes of this Section, of the
number of outstanding shares of Common Stock into which such Securities would be
convertible as of the date on which such consent is requested); provided that,
with respect to any matter that adversely affects the rights of any Initial
Purchaser hereunder, the Company shall obtain the written consent of each such
Initial Purchaser against which such amendment, qualification, supplement,
waiver or consent is to be effective; provided, further, that no amendment,
qualification, supplement, waiver or consent with respect to Section 7 hereof
shall be effective as against any Holder of Registered Securities unless
consented to in writing by such Holder; and provided, further, that the
provisions of this Article 9 may not be amended, qualified, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of the
Initial Purchasers and each Holder.
10. Notices. All notices, requests and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, facsimile or air courier guaranteeing overnight
delivery:
(a) if to a Holder, at the most current address given by such holder
to the Company in accordance with the provisions of the Notice and
Questionnaire, which address initially is, with respect to each Holder, the
address of such Holder maintained by the Registrar under the Indenture;
14
(b) if to the Initial Purchasers or the Representatives, initially
at the address or addresses set forth in the Purchase Agreement; and
(c) if to the Company, initially at its address set forth in the
Purchase Agreement.
All such notices and communications shall be deemed to have been
duly given on the earliest of (i) at the time delivered, if delivered by
hand-delivery; (ii) three business days after being deposited in the mail,
postage prepaid, if mailed by first-class mail; (iii) when receipt is
acknowledged and confirmed as sent by sender's telex or facsimile machine, if
sent by telex or facsimile transmission; and (iv) on the day delivered, if sent
by overnight air courier guaranteeing next day delivery.
The Initial Purchasers or the Company by notice to the other parties
may designate additional or different addresses for subsequent notices or
communications.
11. Remedies. Each party, in addition to being entitled to exercise
all rights provided to it herein, in the Indenture or in the Purchase Agreement
or granted by law, including recovery of liquidated or other damages, will be
entitled to specific performance of its rights under this Agreement. Each party
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Agreement and
hereby agrees to waive in any action for specific performance the defense that a
remedy at law would be adequate.
12. Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their respective successors and assigns,
including, without the need for an express assignment or any consent by the
Company thereto, subsequent Holders of Registrable Securities, and the
indemnified persons referred to in Section 5 hereof. The Company hereby agrees
to extend the benefits of this Agreement to any Holder of Registrable
Securities, and any such Holder may specifically enforce the provisions of this
Agreement as if an original party hereto.
13. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
14. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
15. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York. The parties hereto
each hereby waive any right to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement.
15
16. Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
17. Securities Held by the Company, etc. Whenever the consent or
approval of Holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company or its Affiliates
(other than subsequent Holders of Securities if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such Registrable
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.
18. Termination This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Shelf Registration Period, except
for any liabilities or obligations under Section 4 or Section 5 hereof and the
obligations to make payments of and provide for Liquidated Damages under Section
7 hereof to the extent such Liquidated Damages accrue prior to the end of the
Shelf Registration Period, each of which shall remain in effect in accordance
with its terms.
16
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Company and the several Initial Purchasers.
Very truly yours,
DOV Pharmaceutical, Inc.
By: /s/ J.R. XXXXXX
---------------------------------------
Name: J.R. Xxxxxx
Title: V.P. & General Counsel
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
Citigroup Global Markets Inc.
Banc of America Securities LLC
CIBC World Markets Corp.
By: Citigroup Global Markets Inc.
By: /s/ XXXXX XXXX
--------------------------------
Name: Xxxxx Xxxx
Title: Vice President
For themselves and the other several
Initial Purchasers named in
Schedule I to the Purchase Agreement.
