NPS PHARMACEUTICALS, INC.
REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (this "Agreement") is made effective as
of June 4, 2003 (the "Closing Date") by and between NPS Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), and Enzon Pharmaceuticals, Inc., a
Delaware corporation (the "Holder").
RECITALS
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A. The Company and the Holder have entered into a Restricted Stock Purchase
Agreement, dated as of the date hereof (the "Purchase Agreement"), whereby the
Holder will purchase shares of the Company's Common Stock.
B. The Company is entering into this Agreement to provide liquidity to
Holder following Holder's acquisition of the shares of the Company's Common
Stock.
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the terms below shall
have the following respective meanings:
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar federal rule or statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Form S-3 Registration Statement" means a registration statement of
the Company, on Form S-3 or any successor form filed by the Company pursuant to
this Agreement permitting registration of the Registrable Securities for resale
by the Holder (and in the event that pursuant to the Securities Act the Company
is unable to use Form S-3 (or any successor form), another appropriate form
permitting registration of the Registrable Securities for resale by the Holder).
"Prospectus" means the prospectus included in a Form S-3 Registration
Statement (including without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as a part of an effective
Registration Statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by amendment or prospectus
supplement, including post-effective amendments, and all materials incorporated
by reference or explicitly deemed to be incorporated by reference in such
prospectus.
"Registrable Securities" means the shares of the Company's Common
Stock purchased by Holder under the Purchase Agreement, or issuable in respect
thereof upon any conversion, stock split, stock dividend, recapitalization,
merger or other reorganization; provided, however, that securities shall only be
treated as Registrable Securities if and so long as they have not been
registered or sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction.
"Register," "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.
"Registration Expenses" means all expenses, except Selling Expenses,
incurred by the Company in complying with Section 5 hereof, including without
limitation, all registration, qualification and filing fees, printing expenses,
reasonable fees and disbursements of counsel for the Company, blue sky fees and
expenses, the expense of any special audits incident to or required by any such
registration.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal rule or statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" means (i) all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holder and (ii) all fees and disbursements of counsel for the Holder.
"Transfer" means a transfer or disposition, including but not limited
to by way of sale, assignment, encumberance, hypothecation, pledge, conveyance,
gift, or transfer.
2. Restrictions on Transferability.
(a) The Registrable Securities shall not be Transferred, except upon
the conditions specified in this Agreement. The Holder will cause any transferee
who receives the Registrable Securities in a Transfer other than a sale pursuant
to (i) an effective registration statement under the Securities Act or (ii) Rule
144 under the Securities Act to assume in writing the obligations and
restrictions of the Holder under this Agreement, including without limitation
the restrictions set forth in Section 4 (a "Permitted Transferee").
(b) Standstill. Each of the Company and the Holder hereby acknowledge
that the Company and the Holder have previously executed a letter agreement,
effective December 18, 2002 (the "Confidentiality Agreement"), under which each
of the Company and the Holder agreed to certain "standstill" provisions in
Section 7 therein regarding the acquisition of securities or control of the
other. Each of the Company and the Holder acknowledge that the Confidentiality
Agreement,
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including the "standstill" provisions under Section 7 therein,
continues in full force and effect in accordance with its terms. Notwithstanding
the "standstill" provisions in the Confidentiality Agreement, the Company and
the Holder acknowledge and agree that the negotiation and execution of the
Mutual Termination and Release Agreement dated of even date herewith between the
Company and the Holder, the Purchase Agreement and this Agreement and the
Company's issuance of shares of its Common Stock to the Holder pursuant to the
Purchase Agreement and the completion of any other transactions contemplated
therein and in this Agreement and any transactions in which the Holder may
engage to hedge its position in the shares of Common Stock it receives pursuant
to the Purchase Agreement do not and will not cause a breach or violation of
such standstill provisions by the Holder.
(c) Volume Limitation on Sales. The Holder hereby agrees and covenants
that after the Form S-3 Registration Statement is declared effective by the
Commission (the "Effective Date") the Holder may Transfer no more than 125,000
shares (as appropriately adjusted for stock splits, stock dividends,
combinations and similar events) of Registrable Securities in each monthly
period after the Effective Date, however, any shares of Registrable Securities
not Transferred in preceding monthly periods, which could have been Transferred
under the volume limits of this Section 2(c), may be accumulated and Transferred
subsequently provided, however, that in no instance may the Holder Transfer more
than 375,000 shares of Registrable Securities in any one (1) month period. The
Holder hereby acknowledges and agrees that the Company may place stop transfer
restrictions on the Registrable Securities where such Transfer would exceed the
volume limitations in the preceding sentence. In calculating the volume
limitations of this Section 2(c), Transfers by the Holder shall be aggregated
with any Transfers by Permitted Transferees. The limitations of this Section
2(c) shall cease to be effective if the Company consummates a Controlling
Acquisition. For the purposes of this Section 2, the term "Controlling
Acquisition" means, with reference to the Company, any of the following
transactions: (i) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company pursuant to which the stockholders of the Company immediately preceding
such transaction hold less than sixty percent (60%) of the aggregate equity
interests in the surviving or resulting entity of such transaction or any direct
or indirect parent thereof, (ii) a sale or other disposition by the Company of
assets representing in excess of forty percent (40%) of the aggregate fair
market value of the Company's business immediately prior to such sale, or (iii)
the acquisition by any Person or group (including by way of a tender offer or an
exchange offer or issuance by the Company or such Person or group), directly or
indirectly, of beneficial ownership or a right to acquire beneficial ownership
of shares representing in excess of forty percent (40%) of the voting power of
the then outstanding shares of capital stock of the Company.
3. Restrictive Legends. Each certificate representing the Registrable
Securities shall be stamped or otherwise imprinted with the following or similar
legends:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE
TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER SAID ACT IS
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IN EFFECT AS TO SUCH TRANSFER OR, IN THE OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER, SUCH TRANSFER MAY BE MADE WITHOUT
REGISTRATION UNDER SAID ACT.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
SET FORTH IN A REGISTRATION RIGHTS AGREEMENT TO WHICH THE ORIGINAL
HOLDER OF THESE SHARES WAS A PARTY, A COPY OF WHICH MAY BE OBTAINED AT
THE PRINCIPAL OFFICE OF THE COMPANY. SUCH RESTRICTIONS ARE BINDING ON
TRANSFEREES OF THESE SHARES.
The Holder consents to the making of a notation by the Company on its records
and giving instructions to any transfer agent of its capital stock in order to
implement the restrictions on transfer established in this Agreement.
4. Notice of Proposed Transfers. The Holder agrees to comply in all
respects with the provisions of this Agreement. Without in any way limiting the
immediately preceding sentence or the provisions of Section 2, no sale,
assignment, transfer or pledge (other than (i) a sale made pursuant to a
registration statement filed under the Securities Act and declared effective by
the Commission for which no stop order has been issued and is then existing or
(ii) a sale made in accordance with the applicable provisions of Rule 144) of
Registrable Securities shall be made by the Holder to any person unless such
person shall first agree in writing to be bound by the restrictions of this
Agreement, including without limitation this Section 4. Prior to any proposed
sale, assignment, transfer or pledge of any Registrable Securities, unless there
is in effect a registration statement under the Securities Act covering the
proposed transfer or such sale is made pursuant to Rule 144, the holder thereof
shall give written notice to the Company of such holder's intention to effect
such transfer, sale, assignment or pledge. Each such notice shall describe the
manner and circumstances of the proposed transfer, sale, assignment or pledge in
reasonable detail, and, if requested by the Company, the holder shall also
provide, at such holder's expense, a written opinion of legal counsel (who shall
be, and whose legal opinion shall be, reasonably satisfactory to the Company)
addressed to the Company, to the effect that the proposed transfer of the
Registrable Securities may be effected without registration under the Securities
Act and under applicable state securities laws and regulations. Upon delivery to
the Company of such notice and, if required, such opinion, the holder of such
Registrable Securities shall be entitled to transfer such Registrable Securities
in accordance with the terms of such notice. The Company agrees that it shall
not request such an opinion of counsel with respect to (i) a transfer not
involving a change in beneficial ownership or (ii) a transaction involving the
transfer without consideration of Registrable Securities by an individual holder
during such holder's lifetime by way of gift or on death by will or the laws of
descent and distribution. Each certificate evidencing the Registrable Securities
transferred as above provided shall bear, except if such transfer is made
pursuant to Rule 144 or pursuant to an effective registration statement, the
appropriate restrictive legend set forth in Section 3 above, except that such
certificate shall not bear such restrictive legend if, in the opinion of counsel
for such
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Holder and counsel for the Company, such legend is not required in order to
establish or ensure compliance with the provisions of the Securities Act and
this Agreement.
5. Registration on Form S-3.
(a) Registration. The Company shall use commercially reasonable
efforts to file with the Commission a Form S-3 Registration Statement covering
all Registrable Securities within thirty (30) days after the Closing Date (the
"Filing Deadline Date"). The Company shall use its commercially reasonable
efforts to cause such Form S-3 Registration Statement to be filed and declared
effective within ninety (90) days following the Closing Date (the "Effectiveness
Deadline Date"). The Company shall use its commercially reasonable efforts to
keep such Form S-3 Registration Statement effective until the earlier of (i) the
date all Registrable Securities then held by the Holder represents less than one
percent (1%) of the total issued and outstanding shares of the Common Stock of
the Company or (ii) the date all Registrable Securities then held by the Holder
may be sold pursuant to Rule 144(k) (the "Effective Period").
(b) Limitations on Registration and Sale of Registrable Securities.
Notwithstanding anything in this Agreement to the contrary, the Company's
obligations and the Holder's rights under this Section 5 are subject to the
limitations and qualifications set forth below, which may be waived in writing
by the Company.
(i) The Company shall have no obligation to keep effective a
registration statement hereunder following the Effective Period.
(ii) Upon (i) the issuance by the Commission of a stop order
suspending the effectiveness of the Form S-3 Registration Statement or the
initiation of proceedings with respect to the Form S-3 Registration Statement,
(ii) the occurrence of any event or the existence of any fact or circumstance as
a result of which the Form S-3 Registration Statement shall contain any 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 not misleading, or
any Prospectus shall contain any 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 (a "Material Event"), or (iii) the occurrence, existence or
pendency of any corporate development that, in the reasonable discretion of the
Company, makes it detrimental to the Company for the Form S-3 Registration
Statement and the related Prospectus to be available for a period of time, the
Company shall (A) in the case of clause (ii) above, subject to the next
sentence, as promptly as practicable prepare and file, if necessary pursuant to
applicable law, a post-effective amendment to the Form S-3 Registration
Statement or a supplement to the related Prospectus or any document incorporated
therein by reference or file any other required document that would be
incorporated by reference into the Form S-3 Registration Statement and
Prospectus so that the Form S-3 Registration Statement does not contain any
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 not misleading,
and such Prospectus does not contain any 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, as thereafter delivered
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to the purchasers of the Registrable Securities being sold thereunder, and, in
the case of a post-effective amendment to a Registration Statement, subject to
the next sentence, use its commercially reasonable efforts to cause it to be
declared effective as promptly as is reasonably practicable, and (B) give notice
to the Holder, counsel for the Holder and underwriter, if any, that the
availability of the Form S-3 Registration Statement is suspended (a "Deferral
Notice") and, upon receipt of any Deferral Notice, the Holder agrees not to sell
any Registrable Securities pursuant to the Registration Statement until the
Holder's receipt of copies of the supplemented or amended Prospectus provided
for in clause (A) above, 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 will use its commercially reasonable efforts to
ensure that the use of the Prospectus may be resumed (x) in the case of clause
(i) above, as promptly as is reasonably practicable, (y) in the case of clause
(ii) above, as soon as, is reasonably practicable after the occurrence of the
Material Event and (z) in the case of clause (iii) above, as soon as in the
reasonable discretion of the Company, such suspension is no longer appropriate.
The Company shall be entitled to exercise its right under this Section 5(b)(ii)
to suspend the availability of the Form S-3 Registration Statement or any
Prospectus no more than one (1) time in any three-month period or two (2) times
in any twelve-month period, and any such period during which the availability of
the Registration Statement and any Prospectus is suspended (the "Deferral
Period") shall not exceed 30 days; provided, that the aggregate duration of any
Deferral Periods shall not exceed 45 days in any three- month period (or 55 days
in any three-month period in the event of a Material Event pursuant to which the
Company has delivered a second notice as required below) or 60 days in any
twelve-month period; provided, that in the case of a Material Event relating to
an acquisition or a probable acquisition or financing, recapitalization,
business combination or other similar transaction, the Company may deliver to
the Holder a second notice to the effect set forth above, which shall have the
effect of extending the Deferral Period by up to an additional 10 days, or such
shorter period of time as is specified in such second notice.
(c) Registration Procedures. In connection with any registration
required under this Agreement, the Company shall take the actions set forth
below (subject to Section 5(b)(ii) below).
(i) Prepare and file with the Commission and use its commercially
reasonable efforts to cause to become effective a Form S-3 Registration
Statement with respect to the Registrable Securities in accordance with the
provisions of Section 5(a).
(ii) Prepare and file with the Commission such amendments and
supplements to such Form S-3 Registration Statement and the Prospectus as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such Form S-3 Registration
Statement.
(iii) The Company shall permit a single firm of counsel
designated by the Holder to review the Form S-3 Registration Statement and all
amendments and supplements thereto a reasonable period of time prior to the
filing of the Form S-3 Registration Statement with the Commission.
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(iv) The Company shall notify the Holder of any stop order issued
or threatened by the Commission or other suspension of effectiveness of the Form
S-3 Registration Statement and will take all reasonable actions necessary or
appropriate to prevent the entry of such stop order or to remove it if entered
and will notify the Holder of the resolution of such situation.
(v) The Company shall furnish to the Holder and each underwriter,
if any, of Registrable Securities covered by the Form S-3 Registration Statement
filed pursuant to this Agreement (A) promptly after the same is prepared and
publicly distributed, filed with the Commission, or received by the Company, one
copy of the Form S-3 Registration Statement and any amendment thereto, each
Prospectus and each amendment or supplement thereto, and, as promptly as
practicable after the date of effectiveness of the Form S-3 Registration
Statement or any amendment thereto, a notice stating that the Form S-3
Registration Statement or amendment thereto has been declared effective, and (B)
such number of copies of such registration statement, each amendment and
supplement thereto (in each case including all exhibits thereto), and the
Prospectus included in such registration statement, in conformity with the
requirements of the Securities Act, and such other documents as the Holder may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by the Holder. Such delivery of documents pursuant to (B) above
shall be made by the Company within three (3) trading days of receipt of a
request therefor from the Holder.
(vi) The Company shall use its commercially reasonable efforts to
register or qualify the Registrable Securities under the securities or "blue
sky" laws of each State of the United States of America as any of the Holder or
underwriters, if any, of the Registrable Securities covered by a registration
statement filed hereunder reasonably requests, and shall do any and all other
acts and things which may be reasonably necessary or advisable to enable the
Holder and each underwriter, if any, to consummate the disposition in such
States of the Registrable Securities owned by the Holder; provided that the
Company shall not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subsection (vi), (B) subject itself to taxation in any such jurisdiction or (C)
consent to general service of process in any such jurisdiction.
(vii) As promptly as reasonably practicable give notice to the
Holder and counsel for the Holder, (i) when any Prospectus, Prospectus
supplement, Form S-3 Registration Statement or post-effective amendment to the
Form S-3 Registration Statement has been filed with the Commission and, with
respect to the Form S-3 Registration Statement or any post-effective amendment,
when the same has been declared effective, (ii) of any written request,
following the effectiveness of the Form S-3 Registration Statement under the
Securities Act, by the Commission or any other federal or state governmental
authority for amendments or supplements to any Form S-3 Registration Statement
or related Prospectus or for additional information, (iii) of the issuance by
the Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of the Form S-3 Registration Statement or the
initiation or written threat of any proceedings for that purpose, (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or the written threat
of any proceeding for such
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purpose, (v) of the occurrence of a Material Event (as defined below) (but not
the nature of or details concerning such Material Event) and (vi) of the
determination by the Company that a post-effective amendment to the Form S-3
Registration Statement will be filed with the Commission, which notice may, at
the discretion of the Company (or as required pursuant to Section 5(b)(ii)),
state that it constitutes a Deferral Notice (as defined below), in which event
the provisions of Section 5(b)(ii) shall apply.
(viii) The Company shall enter into customary agreements
(including an underwriting agreement in customary form) and take all such other
reasonable and customary actions as the Holder or the underwriters, if any, may
reasonably request in order to expedite or facilitate the disposition of the
Registrable Securities in accordance with the terms of this Agreement.
(ix) Make reasonably available for inspection during normal
business hours by a representative for the Holder, and any broker-dealers,
counsel for the Holder, accountants or underwriter, all relevant financial and
other records and pertinent corporate documents and properties of the Company
and its subsidiaries, and cause the appropriate officers, directors and
employees of the Company and its subsidiaries to make reasonably available for
inspection during normal business hours on reasonable notice all relevant
information reasonably requested by such representative for the Holder, or any
such broker-dealers, counsel for the Holder, accountants or underwriter in
connection with such disposition, in each case as is customary for similar "due
diligence" examinations; provided, however, that the Holder (and its agents and
representatives) shall hold in confidence and shall not make any disclosure of
any such information, unless (i) disclosure of such information is necessary to
comply with federal or state securities laws, (ii) disclosure of such
information is necessary to avoid or to correct a misstatement or omission in
the Form S-3 Registration Statement (and only for the purpose of correcting such
misstatement or omission in the Form S-3 Registration Statement), (iii) release
of such information is ordered pursuant to a subpoena or other order from a
court or government body of competent jurisdiction, (iv) such information has
been made generally available to the public other than by disclosure in
violation of this or any other agreement, or (v) the Company consents to any
such disclosure. The Holder agrees that it shall, upon learning that disclosure
of such information is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the information deemed
confidential. Nothing herein shall be deemed to limit the Holder's ability to
sell Registrable Securities in a manner which is otherwise consistent with
applicable laws and regulations.
(x) The Company shall hold in confidence and not make any
disclosure of information concerning the Holder provided to the Company pursuant
to this Agreement unless (A) disclosure of such information is necessary to
comply with federal or state securities laws, provided that the Holder shall be
given reasonable notice of the proposed disclosure and that such disclosure is
limited to the maximum extent permitted under such securities laws, (B)
disclosure of such information is necessary to avoid or correct a misstatement
or omission in the Form S-3 Registration Statement, (C) release of such
information is ordered pursuant to a subpoena or other order from a
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court or governmental body of competent jurisdiction, (D) such information has
been made generally available to the public other than by disclosure in
violation of this or any other agreement, or (E) the Holder consents to the form
and content of any such disclosure. The Company agrees that it shall, upon
learning that disclosure of such information concerning the Holder is sought in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to the Holder prior to making such disclosure, and
allow the Holder, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.
(xi) The Company shall cause all Registrable Securities
registered under this Agreement to be listed on the Nasdaq National Market
("Nasdaq"), and shall pay any fees for the additional listing of the shares of
its common stock on Nasdaq as required by Nasdaq, or such other principal market
as the Company's Common Stock may then be listed or traded, and take such other
acts as may be necessary to secure such listing.
6. Other Registration Rights. The Holder acknowledges that certain other
securityholders of the Company may now or hereafter have registration rights,
and that such other securityholders may be entitled to sell their securities at
the same time as the Holder hereunder.
7. Expenses of Registration. All Registration Expenses incurred in
connection with the Company's obligations hereunder shall be borne by the
Company. All Selling Expenses relating to securities proposed to be registered
hereunder and all other registration expenses shall be borne by the Holder.
8. Indemnification.
(a) The Company will indemnify and hold harmless the Holder, each of
its officers and directors, employees, partners, advisors and agents, and each
person controlling the Holder within the meaning of Section 15 of the Securities
Act, with respect to a registration that has been effected pursuant to this
Agreement, against all expenses, claims, losses, damages or liabilities (or
actions or proceedings in respect thereof), including reasonable costs of
investigation and reasonable legal fees and expenses and any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on (i) any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement, preliminary Prospectus,
Prospectus, offering circular or other document, or any amendment or supplement
thereto, incident to any such registration, or arising out of or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading or (ii) any violation or
alleged violation by the Company of the Securities Act, the Exchange Act, any
other applicable securities law, including, without limitation, any state
securities law, or any rule or regulation thereunder or under the Securities Act
or the Exchange Act relating to the offer or sale of the Registrable Securities
and, in either case, the Company will reimburse each Indemnified Party (as
defined in Section 8(c)), for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, provided that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in
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reliance upon and contained in written information furnished to the Company by
the Holder or controlling person or their authorized agent, specifically for use
therein; and provided, further, that the foregoing indemnity agreement is
subject to the condition that, insofar as it relates to any such untrue
statement, alleged untrue statement, omission or alleged omission made in a
preliminary Prospectus, such indemnity agreement shall not inure to the benefit
of any person, if a copy of the final Prospectus or an amended or supplemented
Prospectus, as applicable, was furnished to the Holder or an underwriter within
the period of time required by the Securities Act, and if the final Prospectus
or the amended or supplemented Prospectus, as applicable, would have cured the
defect giving rise to the loss, liability, claim or damage. In no event,
however, shall the Company have any indemnification obligation to the extent
that the expenses, claims, losses, damages or liabilities as to which
indemnification is sought are in connection with an offer or sale made by a
person other than the Company during a period in which the availability of the
Form S-3 Registration Statement and Prospectus are suspended pursuant to Section
5(b)(ii) hereof; provided a Deferral Notice was delivered by the Company to the
person making such sale prior to the time such sale was effected (a
"Violation"). The Company also agrees to indemnify underwriters participating in
the distribution, their officers, directors, employees, partners and agents, and
each person who controls such underwriters (within the meaning of the Securities
Act) to the same extent as provided above, if so requested.
(b) The Holder will indemnify the Company, each of its directors and
officers, employees, partners, advisors and agents and each person controlling
the Company within the meaning of Section 15 of the Securities Act against all
claims, losses, damages and liabilities (or actions or proceedings in respect
thereof) arising out of or based on (i) a Violation by the Holder or (ii) any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, Prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Indemnified Party, for any legal or any
other expenses reasonably incurred in connection with investigating, preparing
or defending any such claim, loss, damage, liability or action, but, in the case
of clause (ii) above, only to the extent that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in reliance upon and
contained in written information furnished to the Company by such Holder or
controlling person or their agent specifically for use therein; provided,
however, that the foregoing indemnity is subject to the condition that, insofar
as it relates to any untrue statement, alleged untrue statement, omission or
alleged omission made in a preliminary Prospectus, such indemnity agreement
shall not inure to the benefit of any person, if a copy of the final Prospectus
or an amended or supplemented Prospectus, as applicable, was not furnished by
the Company to the Holder or underwriter within the time period required by the
Securities Act, and if the final Prospectus, as amended or supplemented, as
applicable, would have cured the defect giving rise to the loss, liability,
claim or damage; and provided further, however, that the Holder shall be liable
for only that amount as does not exceed the net proceeds actually received by
the Holder as a result of the offering of Registrable Securities to which the
loss, liability, claim or damage relates. The Holder also agrees to indemnify
underwriters participating in the distribution, their officers, directors,
employees, partners and agents, and each person who controls such underwriters
(within the meaning of the Securities Act) to the same extent as provided above,
if so requested.
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(c) Each party entitled to indemnification under this Section 8 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that (i) counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, (ii) that the failure of any Indemnified Party to give notice
as provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 8 unless the failure to give such notice is materially
prejudicial to an Indemnifying Party's ability to defend such action, and then
only to the extent that such Indemnifying Party is materially prejudiced, and
(iii) that the Indemnifying Party shall not assume the defense for matters as to
which, in the reasonable opinion of counsel retained by the Indemnified Party,
there is a conflict of interest or there are separate and different defenses. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which (i) does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation and a covenant not to xxx, (ii) includes admission of fault by the
Indemnified Party or (iii) commits the Indemnified Party to pay any money
damages. The indemnification required by this Section 8 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as such expense, loss, damage or liability is incurred and is due
and payable.
9. Contribution. If the indemnification provided for in Section 8 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
or insufficient to hold it harmless as contemplated by Section 8, then the
Indemnifying Party, in lieu of indemnifying the Indemnified Party hereunder,
shall contribute to the amount paid or payable by the Indemnified Party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnifying Party and the Indemnified Party, but also the relative fault of the
Indemnifying Party and the Indemnified Party in connection with the statements
or omissions that resulted in such loss, claim, damage or liability, as well as
any other relevant equitable considerations, provided that no Holder shall be
required to contribute an amount greater than the dollar amount of the net
proceeds received by such Holder with respect to the sale of the Registrable
Securities giving rise to such indemnification obligation. The relative fault of
any Indemnifying Party or of any Indemnified Party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
relates to information supplied by such Indemnifying Party or the Indemnified
Party or their affiliates or representatives, and the parties' relative intent,
knowledge, access to information and the opportunity to correct or prevent such
statement or omission. The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by (i) pro
rata allocation (even if all Holders or any agents for the Holders or any
underwriters of the Registrable Securities, or all of them, were treated as one
entity for such purpose), or (ii) by any other method that does not take into
account the equitable considerations referred to in this Section 9. The amount
paid or payable by an Indemnified Party as a result of the
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losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action, proceeding or claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person.
10. Liquidated Damages.
(a) If by the Effectiveness Deadline Date, the Form S-3 Registration
Statement is not declared effective by the Commission (a "Registration
Default"), then the Company shall be required to pay a cash amount equal to
$20,000 per week (the "Liquidated Damages") to the Holder from and including the
day following such Registration Default until the time that the Form S-3
Registration Statement is declared effective.
(b) If the Form S-3 Registration Statement is declared effective, and
then for any reason ceases to be effective or becomes the subject of a stop
order or is otherwise unavailable to the Holder pursuant to the restrictions
contained herein for a period in excess of any Deferral Periods allowed under
Section 5(b)(ii) or any valid extensions thereof (an "Effectiveness Default"),
the Company will pay a cash amount of $20,000 per week to the Holder from and
including the day following such Effectiveness Default until the time that the
Form S-3 Registration Statement once again becomes effective or such stop order
is lifted.
11. Information by Holder. The Holder shall furnish to the Company such
information regarding the Holder, the Registrable Securities held by it and the
distribution proposed by the Holder as the Company may reasonably request in
writing and as shall be required in connection with any registration referred to
in this Agreement. Notwithstanding anything contained herein to the contrary,
the Company shall have no obligation to effect any registration hereunder prior
to its receipt of such information.
12. Rule 144 Reporting. With a view to making available to the Holder the
benefits of certain rules and regulations of the Commission which may permit the
sale of the Registrable Securities to the public without registration the
Company agrees to use commercially reasonable efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) Furnish to the Holder, so long as the Holder owns or has the right
to acquire any Registrable Securities, promptly after the Holder's written
request, a written statement by the Company as to its compliance with the
foregoing requirements and such other information as may be reasonably requested
in availing the Holder of any rule or regulation of the Commission which permits
the selling of any such securities without registration.
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13. Transfer of Registration Rights. The rights to cause the Company to
register securities granted to the Holder by the Company pursuant to Section 5
may be transferred or assigned by the Holder to a Permitted Transferee who
acquires no less than 500,000 shares of Registrable Securities, provided, that,
such transfer or assignment is in compliance with the terms of this Agreement
and the Company is provided with prior written notice of the securities with
respect to which such registration rights are being transferred or assigned.
14. Amendment. Except as otherwise provided above, any provision of this
Agreement may be amended or the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holder.
15. Governing Law. This Agreement shall be governed in all respects by the
laws of the State of Delaware, without regard to conflict of laws provisions.
16. Entire Agreement. This Agreement, the Purchase Agreement, the
Confidentiality Agreement and that certain Mutual Termination and Release
Agreement and the Annexes, Exhibits and Schedules attached hereto and thereto
and delivered in connection herewith and therewith, as the case may be,
constitute the full and entire understanding and agreement among the parties
regarding the matters set forth herein. Except as otherwise expressly provided
herein, all other agreements regarding the registration rights of the Holder
shall hereby expire. The provisions hereof shall inure to the benefit of, and be
binding upon the successors, permitted assigns, heirs, executors and
administrators of the parties hereto.
17. Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified
mail, postage prepaid, by hand, by messenger or by overnight courier, addressed:
(a) if to a Holder, to:
Enzon Pharmaceuticals, Inc.
000 Xxxxx 000/000
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
or at such other address as such Holder shall have
furnished to the Company, with a copy to:
Xxxxxx & Whitney LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
(b) if to the Company, to:
NPS Pharmaceuticals, Inc.
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000 Xxxxxxx Xxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: General Counsel
or at such other address as the Company shall have furnished
to the Holder, with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation
0000 Xxxx Xxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxxxxx X. X'Xxxxxx, Esq.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when actually delivered
as provided above, if delivered personally or by messenger, or, on the day shown
on the return receipt, if sent by mail or other delivery service.
18. Counterparts. This Agreement may be executed in any number of
counterparts, including a facsimile counterpart, each of which shall be an
original, but all of which together shall constitute one instrument.
(Remainder of page intentionally left blank.)
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first written above.
COMPANY: HOLDER:
NPS PHARMACEUTICALS, INC. ENZON PHARMACEUTICALS, INC.
By: /s/ By: /s/
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Name: Name:
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Title: Title:
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