Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of March 16, 2005 by and among Encysive Pharmaceuticals Inc., a Delaware
corporation (the "Company") and ▇.▇. ▇▇▇▇▇▇ Securities Inc., UBS Securities LLC
and ▇▇ ▇▇▇▇▇ & Co., LLC (collectively, the "Initial Purchasers"), pursuant to
that certain Purchase Agreement, dated as of March 11, 2005 (the "Purchase
Agreement") among the Company and the Initial Purchasers.
In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement. The execution of this Agreement is a condition to the closing
under the Purchase Agreement.
The Company agrees with the Initial Purchasers (i) for their benefit as
Initial Purchasers and (ii) for the benefit of the beneficial owners (including
the Initial Purchasers) from time to time of the Bonds (as defined herein) and
the beneficial owners from time to time of the Underlying Common Stock (as
defined herein) issued upon conversion of the Bonds (each of the foregoing a
"Holder" and together the "Holders"), as follows:
Section 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 terms shall have the following meanings:
"Additional Interest Amount" has the meaning set forth in Section 2(e)
hereof.
"Affiliate" means with respect to any specified person, an "affiliate," as
defined in Rule 144, of such person.
"Amendment Effectiveness Deadline Date" has the meaning set forth in
Section 2(d) hereof.
"Applicable Conversion Price" means, as of any date of determination,
$1,000 divided by the Conversion Rate then in effect as of the date of
determination or, if no Bonds are then outstanding, the Conversion Rate that
would be in effect were Bonds then outstanding.
"Bonds" means the 2-1/2% Convertible Senior Notes due 2012 of the Company
to be purchased pursuant to the Purchase Agreement.
"Business Day" means each day on which the New York Stock Exchange, Inc. is
open for trading.
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"Common Stock" means the shares of common stock, par value $.005 per share,
of the Company and any other shares of capital stock as may constitute "Common
Stock" for purposes of the Indenture, including the Underlying Common Stock.
"Conversion Rate" has the meaning assigned to such term in the Indenture.
"Damages Accrual Period" has the meaning set forth in Section 2(e) hereof.
"Damages Payment Date" means each interest payment date under the Indenture
in the case of Bonds, and each March 15 and September 15 in the case of the
Underlying Common Stock.
"Effectiveness Deadline Date" has the meaning set forth in Section 2(a)
hereof.
"Effectiveness Period" means a period (subject to extension pursuant to
Section 3(i) hereof) of two years after the later of (1) the original issuance
of the Bonds and (2) the last date that the Company or any of its Affiliates was
the owner of such Bonds (or any predecessor thereto), or such shorter period of
time (x) as permitted by Rule 144(k) under the Securities Act or any successor
provisions thereunder or (y) that will terminate when each of the Registrable
Securities covered by the Shelf Registration Statement ceases to be a
Registrable Security.
"Event" has the meaning set forth in Section 2(e) hereof.
"Event Date" has the meaning set forth in Section 2(e) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Filing Deadline Date" has the meaning set forth in Section 2(a) hereof.
"Holder" has the meaning set forth in the third paragraph of this
Agreement.
"Indenture" means the Indenture, dated as of March 16, 2005, between the
Company and The Bank of New York Trust Company, N.A., as trustee, pursuant to
which the Bonds are being issued.
"Initial Purchasers" has the meaning set forth in the preamble hereto.
"Initial Shelf Registration Statement" has the meaning set forth in Section
2(a) hereof.
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"Issue Date" means the first date of original issuance of the Bonds.
"Material Event" has the meaning set forth in Section 3(i) hereof.
"Notice and Questionnaire" means a written notice and questionnaire
delivered to the Company containing substantially the information called for by
the Selling Securityholder Notice and Questionnaire attached as Annex A to the
Offering Memorandum dated March 11, 2005 relating to the Bonds.
"Notice Holder" means, on any date, any Holder that has delivered a Notice
and Questionnaire to the Company on or prior to such date, so long as all of
their Registrable Securities that have been registered for resale pursuant to a
Notice and Questionnaire have not been sold in accordance with a Shelf
Registration Statement.
"Purchase Agreement" has the meaning set forth in the preamble hereof.
"Prospectus" means the prospectus included in any 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 415 promulgated under the
Securities Act), as amended or supplemented by any 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.
"Record Holder" means (i) with respect to any Damages Payment Date relating
to any Bonds as to which any such Additional Interest Amount has accrued, the
holder of record of such Bond on the record date with respect to the interest
payment date under the Indenture on which such Damages Payment Date shall occur
and (ii) with respect to any Damages Payment Date relating to the Underlying
Common Stock as to which any such Additional Interest Amount has accrued, the
registered holder of such Underlying Common Stock fifteen (15) days prior to
such Damages Payment Date.
"Registrable Securities" means the Bonds until such Bonds have been
converted into the Underlying Common Stock and, at all times the Underlying
Common Stock and any securities into or for which such Underlying Common Stock
has been converted, and any security issued with respect thereto upon any stock
dividend, split or similar event until, in the case of any such security, the
earliest of (x) the date on which such security has been effectively registered
under the Securities Act and disposed of, whether or not in accordance with the
Shelf Registration Statement and (y) the date that is two years after the later
of (1) the original issuance of the Bonds and (2) the last date that the Company
or any of its Affiliates was the owner of such Bonds (or any predecessor
thereto), or such shorter period of time as permitted by Rule 144(k) under the
Securities Act or any successor provisions thereunder.
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"Registration Expenses" has the meaning set forth in Section 5 hereof.
"Registration Statement" means any registration statement of the Company
that covers any of the Registrable Securities pursuant to the provisions of this
Agreement including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.
"Rule 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
"Rule 144A" means Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
"Shelf Registration Statement" has the meaning set forth in Section 2(a)
hereof.
"Subsequent Shelf Registration Statement" has the meaning set forth in
Section 2(b) hereof.
"Suspension Notice" has the meaning set forth in Section 3(i) hereof.
"Suspension Period" has the meaning set forth in Section 3(i) hereof.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Trustee" means The Bank of New York Trust Company, N.A., the Trustee under
the Indenture.
"Underlying Common Stock" means the Common Stock into which the Bonds are
convertible or issued upon any such conversion.
Section 2. Shelf Registration. (a) The Company shall prepare and file or
cause to be prepared and filed with the SEC, as soon as practicable but in any
event by the date (the "Filing Deadline Date") that is ninety (90) days after
the Issue Date, a Registration Statement for an offering to be made on a delayed
or continuous basis pursuant to Rule 415 of the Securities Act (a "Shelf
Registration Statement") registering the resale from time to time by Holders
thereof of all of the Registrable Securities (the "Initial Shelf Registration
Statement").The Initial
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Shelf Registration Statement shall be on Form S-1 or S-3 or another appropriate
form permitting registration of such Registrable Securities for resale by such
Holders in accordance with the reasonable methods of distribution elected by the
Holders, approved by the Company, and set forth in the Initial Shelf
Registration Statement. The Company shall use its reasonable best efforts to
cause the Initial Shelf Registration Statement to be declared effective under
the Securities Act as promptly as is practicable but in any event by the date
(the "Effectiveness Deadline Date") that is one hundred eighty (180) days after
the Issue Date, and to keep the Initial Shelf Registration Statement (or any
Subsequent Shelf Registration Statement) continuously effective under the
Securities Act until the expiration of the Effectiveness Period. At the time the
Initial Shelf Registration Statement is declared effective, each Holder that
became a Notice Holder on or prior to the date that is ten (10) Business Days
prior to such time of effectiveness shall be named as a selling securityholder
in the Initial 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.
(b) If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period, the Company shall use its reasonable best efforts to
obtain the prompt withdrawal of any order suspending the effectiveness thereof,
and in any event shall within thirty (30) days of such cessation of
effectiveness amend the Shelf Registration Statement in a manner reasonably
expected to obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional Shelf Registration Statement covering all of the
securities that as of the date of such filing are Registrable Securities (a
"Subsequent Shelf Registration Statement"). If a Subsequent Shelf Registration
Statement is filed, the Company shall use its reasonable best efforts to cause
the Subsequent Shelf Registration Statement to become effective as promptly as
is practicable after such filing and to keep such Shelf Registration Statement
(or subsequent Shelf Registration Statement) continuously effective until the
end of the Effectiveness Period.
(c) The Company shall supplement and amend the Shelf Registration Statement
if required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement, if
required by the Securities Act, by the SEC or as reasonably requested by the
Initial Purchasers or by the Trustee on behalf of the Holders of the Registrable
Securities covered by such Shelf Registration Statement.
(d) Each Holder of Registrable Securities agrees that if such Holder wishes
to sell Registrable Securities pursuant to a Shelf Registration Statement and
related Prospectus, it will do so only in accordance with this Section 2(d) and
Section 3(i). Each Holder of Registrable Securities wishing to sell Registrable
Securities pursuant to a Shelf Registration Statement and related Prospectus
agrees to deliver a completed and executed Notice and Questionnaire to the
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Company prior to any attempted or actual distribution of Registrable Securities
under the Shelf Registration Statement; provided that Holders of Registrable
Securities shall have at least twenty (20) Business Days from the date on which
the Notice and Questionnaire is first sent to such Holders by the Company to
complete and return the Notice and Questionnaire to the Company. From and after
the date the Initial Shelf Registration Statement is declared effective, the
Company shall, as promptly as practicable after the date a Notice and
Questionnaire is delivered, and in any event within the later of (x) five (5)
Business Days after such date or (y) five (5) Business Days after the expiration
of any Suspension Period (1) in effect when the Notice and Questionnaire is
delivered or (2) put into effect within five (5) Business Days of such delivery
date, (i) if required by the rules, regulations or instructions of the SEC or
other applicable law, file with the SEC a post-effective amendment to the Shelf
Registration Statement or, if required by the rules, regulations or instructions
of the SEC or other applicable law, prepare and file a supplement to the related
Prospectus or a supplement or amendment to any document incorporated therein by
reference or file any other required document so that the Holder delivering such
Notice and Questionnaire is 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 the Registrable
Securities in accordance with applicable law and, if the Company shall file a
post-effective amendment to the Shelf Registration Statement, use its reasonable
best efforts to cause such post-effective amendment to be declared effective
under the Securities Act as promptly as is practicable, but in any event by the
date (the "Amendment Effectiveness Deadline Date") that is forty-five (45) days
after the date such post-effective amendment is required by this clause to be
filed; (ii) provide such Holder a reasonable number of copies of any documents
filed pursuant to Section 2(d)(i); and (iii) notify such Holder as promptly as
practicable after the effectiveness under the Securities Act of any
post-effective amendment filed pursuant to Section 2(d) (i); provided that if
such Notice and Questionnaire is delivered during a Suspension Period, or a
Suspension Period is put into effect within five (5) Business Days after such
delivery date, the Company shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in clauses (i), (ii) and
(iii) above within five (5) Business Days after expiration of the Suspension
Period in accordance with Section 3(i); provided further that if under
applicable law, the Company has more than one option as to the type or manner of
making any such filing, the Company shall make the required filing or filings in
the manner or of a type that is reasonably expected to result in the earliest
availability of the Prospectus for effecting resales of Registrable Securities.
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 any Shelf Registration Statement or related Prospectus;
provided, however, that any Holder that becomes a Notice Holder pursuant to the
provisions of this Section 2(d) (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
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Statement or related Prospectus in accordance with the requirements of this
Section 2(d).
(e) The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if (i) the Initial Shelf Registration Statement
has not been filed on or prior to the Filing Deadline Date, (ii) the Initial
Shelf Registration Statement has not been declared effective under the
Securities Act on or prior to the Effectiveness Deadline Date or (iii) the
Initial Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective (without being succeeded immediately by an
additional registration statement filed and declared effective) or usable for
the offer and sale of Registrable Securities for a period of time (including any
Suspension Period) which shall exceed forty-five (45) days in the aggregate in
any three (3) month period or ninety (90) days in the aggregate in any twelve
(12) month period (each of the events of a type described in any of the
foregoing clauses (i) through (iii) are individually referred to herein as an
"Event," and the Filing Deadline Date in the case of clause (i), the
Effectiveness Deadline Date in the case of clause (ii), the date on which the
duration of the ineffectiveness or unusability of the Initial Shelf Registration
Statement in any period exceeds the number of days permitted by clause (iii)
hereof in the case of clause (iii), being referred to herein as an "Event
Date"). Events shall be deemed to continue until the following dates with
respect to the respective types of Events: the date the Initial Shelf
Registration Statement is filed in the case of an Event of the type described in
clause (i), the date the Initial Shelf Registration Statement is declared
effective under the Securities Act in the case of an Event of the type described
in clause (ii), and the date the Initial Shelf Registration Statement becomes
effective or usable again in the case of an Event of the type described in
clause (iii).
Accordingly, commencing on (and including) any Event Date and ending on
(but excluding) the next date on which there are no Events that have occurred
and are continuing (a "Damages Accrual Period"), the Company agrees to pay, as
liquidated damages and not as a penalty, an amount (the "Additional Interest
Amount") at the rate described below, payable periodically on each Damages
Payment Date to Record Holders of Bonds that are Registrable Securities to the
extent of, for each such Damages Payment Date, accrued and unpaid Additional
Interest Amount to (but excluding) such Damages Payment Date (or, if the Damages
Accrual Period shall have ended prior to such Damages Payment Date, the date of
the end of the Damages Accrual Period); provided that any Additional Interest
Amount accrued with respect to any Bond or portion thereof called for redemption
on a redemption date or converted into Underlying Common Stock on a conversion
date prior to the Damages Payment Date, shall, in any such event, be paid
instead to the Holder who submitted such Bond or portion thereof for redemption
or conversion on the applicable redemption date or conversion date, as the case
may be, on such date (or promptly following the conversion date, in the case of
conversion). The Additional Interest Amount shall accrue at a rate per
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annum equal to one-quarter of one percent (0.25%) for the first 90-day period
from the Event Date, and thereafter at a rate per annum equal to one-half of one
percent (0.5%) of the principal amount of such Bonds determined as of the
Business Day immediately preceding the next Damages Payment Date.
Notwithstanding the foregoing, no Additional Interest Amounts shall accrue as to
any Registrable Security from and after the earlier of (x) the date such
security is no longer a Registrable Security, (y) the date such security is
converted into Underlying Common Stock, and (z) expiration of the Effectiveness
Period. The rate of accrual of the Additional Interest Amount with respect to
any period shall not exceed the rate provided for in this paragraph
notwithstanding the occurrence of multiple concurrent Events. Following the cure
of all Events requiring the payment by the Company of Additional Interest
Amounts to the Holders of Registrable Securities pursuant to this Section, the
accrual of Additional Interest Amounts shall cease (without in any way limiting
the effect of any subsequent Event requiring the payment of Additional Interest
Amount by the Company).
The Trustee shall be entitled, on behalf of Holders of Bonds, to seek any
available remedy for the enforcement of this Agreement, including for the
payment of any Additional Interest Amount. Notwithstanding the foregoing, the
parties agree that the sole damages payable for a violation of the terms of this
Agreement with respect to which additional interest is expressly provided shall
be such additional interest.
All of the Company's obligations set forth in this Section 2(e) that are
outstanding with respect to any Registrable Security at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 8(k)).
The parties hereto agree that the additional interest provided for in this
Section 2(e) as liquidated damages constitutes a reasonable estimate of the
damages that may be incurred by Holders of Registrable Securities by reason of
the failure of the Shelf Registration Statement to be filed or declared
effective or available for effecting resales of Registrable Securities in
accordance with the provisions hereof.
Section 3. Registration Procedures. In connection with the registration
obligations of the Company under Section 2 hereof, the Company shall:
(a) Prepare and file with the SEC a Shelf Registration Statement or Shelf
Registration Statements on Form S-1 or S-3 or any other appropriate form under
the Securities Act available for the sale of the Registrable Securities by the
Holders thereof in accordance with the intended method or methods of
distribution thereof, and use its reasonable best efforts to cause each such
Shelf Registration Statement to become effective and remain effective as
provided herein; provided that before filing any Shelf Registration Statement or
Prospectus
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or any amendments or supplements thereto with the SEC, the Company shall furnish
to the Initial Purchasers and counsel for the Holders and for the Initial
Purchasers (or, if applicable, separate counsel for the Holders) copies of all
such documents proposed to be filed and use its reasonable best efforts to
reflect in each such document when so filed with the SEC such comments as such
counsel reasonably shall propose within three (3) Business Days of the delivery
of such copies to the Initial Purchasers and such counsel.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration Statement as may be necessary to keep such
Shelf Registration Statement continuously effective until the expiration of the
Effectiveness Period; cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act; and
use its reasonable best efforts to comply with the provisions of the Securities
Act applicable to it with respect to the disposition of all securities covered
by such Shelf Registration Statement during the Effectiveness Period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such Shelf Registration Statement as so amended or such Prospectus as
so supplemented.
(c) As promptly as practicable give notice to the Notice Holders, the
Initial Purchasers and counsel for the Holders and for the Initial Purchasers
(or, if applicable, separate counsel for the Holders) (i) when any Prospectus,
Prospectus supplement, Shelf Registration Statement or post-effective amendment
to a Shelf Registration Statement has been filed with the SEC and, with respect
to a Shelf Registration Statement or any post-effective amendment, when the same
has been declared effective, (ii) of any request, following the effectiveness of
the Initial Shelf Registration Statement under the Securities Act, by the SEC or
any other federal or state governmental authority for amendments or supplements
to any Shelf Registration Statement or related Prospectus or for additional
information, (iii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of any
Shelf Registration Statement or the initiation or threatening 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 threatening of any proceeding for such purpose, (v) after the
effective date of any Shelf Registration Statement filed pursuant to this
Agreement of the occurrence of (but not the nature of or details concerning) a
Material Event and (vi) of the determination by the Company that a
post-effective amendment to a Shelf Registration Statement will be filed with
the SEC, which notice may, at the discretion of the Company (or as required
pursuant to Section 3(i)), state that it constitutes a Suspension Notice, in
which event the provisions of Section 3(i) shall apply.
(d) Use its reasonable best efforts to prevent the issuance of, and, if
issued, to obtain the withdrawal of any order suspending the effectiveness of a
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Shelf Registration Statement or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction in which they have been qualified for
sale, in either case at the earliest possible moment, and provide prompt notice
to each Notice Holder and the Initial Purchasers of the withdrawal of any such
order.
(e) If requested by the Initial Purchasers or any Notice Holder, as
promptly as practicable incorporate in a Prospectus supplement or post-effective
amendment to a Shelf Registration Statement such information as the Initial
Purchasers, such Notice Holder or counsel for the Holders and for the Initial
Purchasers (or, if applicable, separate counsel for the Holders) shall determine
to be required to be included therein by applicable law and make any required
filings of such Prospectus supplement or such post-effective amendment; provided
that the Company shall not be required to take any actions under this Section
3(e) that, in the written opinion of counsel for the Company, are not in
compliance with applicable law.
(f) As promptly as practicable furnish to each Notice Holder, counsel for
the Holders and for the Initial Purchasers (or, if applicable, separate counsel
for the Holders) and the Initial Purchasers, without charge, at least one (1)
conformed copy of the Shelf Registration Statement and any amendment thereto,
including financial statements but excluding schedules, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits
(unless requested in writing to the Company by such Notice Holder, such counsel
or the Initial Purchasers).
(g) During the Effectiveness Period, deliver to each Notice Holder, counsel
for the Holders and for the Initial Purchasers (or, if applicable, separate
counsel for the Holders) and the Initial Purchasers, in connection with any sale
of Registrable Securities pursuant to a Shelf Registration Statement, without
charge, as many copies of the Prospectus or Prospectuses relating to such
Registrable Securities (including each preliminary prospectus) and any amendment
or supplement thereto as such Notice Holder and the Initial Purchasers may
reasonably request; and the Company hereby consents (except during such periods
that a Suspension Notice is outstanding and has not been revoked) to the use of
such Prospectus or each amendment or supplement thereto by each Notice Holder,
in connection with any offering and sale of the Registrable Securities covered
by such Prospectus or any amendment or supplement thereto in the manner set
forth therein.
(h) Prior to any public offering of the Registrable Securities pursuant to
the Shelf Registration Statement, use its reasonable best efforts to register or
qualify or cooperate with the Notice Holders in connection with the registration
or qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Notice Holder reasonably
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requests in writing (which request may be included in the Notice and
Questionnaire); prior to any public offering of the Registrable Securities
pursuant to the Shelf Registration Statement, use its reasonable best efforts to
keep each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period in connection with such Notice Holder's offer
and sale of Registrable Securities pursuant to such registration or
qualification (or exemption therefrom) and do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of such Registrable Securities in the manner set forth in the
relevant Shelf Registration Statement and the related Prospectus; provided that
the Company will not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Agreement or (ii) take any action that would
subject it to general service of process in suits or to taxation in any such
jurisdiction where it is not then so subject.
(i) Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence of any event or the existence
of any fact as a result of which any Shelf 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 necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (C) the occurrence or existence of any pending
corporate development (a "Material Event") that, in the reasonable discretion of
the Company, makes it appropriate to suspend the availability of the Shelf
Registration Statement and the related Prospectus, (i) in the case of clause (B)
or (C) above, subject to the next sentence, as promptly as practicable, prepare
and file, if necessary pursuant to applicable law, a post-effective amendment to
such Shelf 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 such Shelf Registration
Statement and Prospectus so that such Shelf 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 necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that the Company may rely on
information provided by each Notice Holder with respect to such Notice Holder),
as thereafter delivered to the purchasers of the Registrable Securities being
sold thereunder, and, in the case of a post-effective amendment to a Shelf
Registration Statement, subject to the next sentence, use its reasonable best
efforts to cause it to be declared effective as promptly as is practicable, and
(ii) give notice to the Notice Holders and counsel for the Holders and for the
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Initial Purchasers (or, if applicable, separate counsel for the Holders) that
the availability of the Shelf Registration Statement is suspended (a "Suspension
Notice") and, upon receipt of any Suspension Notice, each Notice Holder agrees
not to sell any Registrable Securities pursuant to such Shelf Registration
Statement until such Notice Holder's receipt of copies of the supplemented or
amended Prospectus provided for in clause (i) 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
reasonable best efforts to ensure that the use of the Prospectus may be resumed
(x) in the case of clause (A) above, as promptly as is practicable, (y) in the
case of clause (B) above, as soon as, in the reasonable judgment of the Company,
the Shelf Registration Statement does not contain any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and the Prospectus
does not contain any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and (z) in the
case of clause (C) above, as soon as, in the reasonable discretion of the
Company, such suspension is no longer appropriate. The period during which the
availability of the Shelf Registration Statement and any Prospectus may be
suspended (the "Suspension Period") without the Company incurring any obligation
to pay additional interest pursuant to Section 2(e) shall not exceed thirty (30)
days in any three (3) month period and sixty (60) days in any twelve (12) month
period. The Effectiveness Period shall be extended by the number of days from
and including the date of the giving of the Suspension Notice to and including
the date on which the Notice Holder received copies of the supplemented or
amended Prospectus provided in clause (i) above, or the date on which 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.
(j) Make available for inspection during normal business hours by
representatives for the Notice Holders of such Registrable Securities, and any
broker-dealers, attorneys and accountants retained by such Notice Holders, 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
available for inspection during normal business hours all relevant information
reasonably requested by such representatives for the Notice Holders, or any such
broker-dealers, attorneys or accountants in connection with such disposition, in
each case as is customary for similar "due diligence" examinations; provided,
however, that such persons shall, at the Company's request, first agree in
writing with the Company that any information that is reasonably and in good
faith designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such persons and
shall be used solely for the
12
purposes of exercising rights under this Agreement, unless (i) disclosure of
such information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities, (ii) disclosure of such
information is required by law (including any disclosure requirements pursuant
to federal securities laws in connection with the filing of any Shelf
Registration Statement or the use of any Prospectus referred to in this
Agreement), (iii) such information becomes generally available to the public
other than as a result of a disclosure or failure to safeguard by any such
person or (iv) such information becomes available to any such person from a
source other than the Company and such source is not bound by a confidentiality
agreement or is not otherwise under a duty of trust to the Company, and provided
that the foregoing inspection and information gathering shall, to the greatest
extent possible, be coordinated on behalf of all the Notice Holders and the
other parties entitled thereto by the counsel referred to in Section 5.
(k) Comply with all applicable rules and regulations of the SEC and make
generally available to its securityholders earning statements (which need not be
audited) satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days after the
end of any 12-month period if such period is a fiscal year) commencing on the
first day of the first fiscal quarter of the Company commencing after the
effective date of a Shelf Registration Statement, which statements shall cover
said 12-month periods.
(l) Cooperate with each Notice Holder to facilitate the timely preparation
and delivery of certificates representing Registrable Securities sold pursuant
to a Shelf Registration Statement, which certificates shall not bear any
restrictive legends, and cause such Registrable Securities to be in such
denominations as are permitted by the Indenture and registered in such names as
such Notice Holder may request in writing at least (2) Business Days prior to
any sale of such Registrable Securities.
(m) Provide a CUSIP number for all Registrable Securities covered by each
Shelf Registration Statement not later than the effective date of such Shelf
Registration Statement and provide the Trustee and the transfer agent for the
Common Stock with certificates for the Registrable Securities that are in a form
eligible for deposit with The Depository Trust Company.
(n) Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc.
(o) Upon (i) the filing of the Initial Registration Statement and (ii) the
effectiveness of the Initial Registration Statement, announce the same, in each
case by release to Reuters Economic Services and Bloomberg Business News.
13
(p) Enter into such customary agreements and take all such other necessary
actions in connection therewith (including those requested by the holders of a
majority of the Registrable Securities being sold) in order to expedite or
facilitate disposition of such Registrable Securities.
(q) Cause the Indenture to be qualified under the TIA not later than the
effective date of any Shelf Registration Statement; and in connection therewith,
cooperate with the Trustee to effect such changes to the Indenture as may be
required for the Indenture to be so qualified in accordance with the terms of
the TIA and use its reasonable best efforts to cause the Trustee to execute, all
documents as may be required to effect such changes, and all other forms and
documents required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner.
Section 4. Holder's Obligations. Each Holder agrees, by acquisition of the
Registrable Securities, that no Holder of Registrable Securities shall be
entitled to sell any of such Registrable Securities pursuant to a Shelf
Registration Statement or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with a Notice and Questionnaire as required
pursuant to Section 2(d) hereof (including the information required to be
included in such Notice and Questionnaire) and the information set forth in the
next sentence. Each Notice Holder agrees promptly to furnish to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Notice Holder not misleading and any other
information regarding such Notice Holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably request.
Any sale of any Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the information relating to such
Holder and its plan of distribution is as set forth in the Prospectus delivered
by such Holder in connection with such disposition, that such Prospectus does
not as of the time of such sale contain any untrue statement of a material fact
relating to or provided by such Holder or its plan of distribution and that such
Prospectus does not as of the time of such sale omit to state any material fact
relating to or provided by such Holder or its plan of distribution necessary in
order to make the statements in such Prospectus, in the light of the
circumstances under which they were made, not misleading.
Section 5. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Section 2 and 3 of this Agreement whether or not any of the
Shelf Registration Statements are declared effective. Such fees and expenses
("Registration Expenses") shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses
(x) with respect to filings required to be made with the National Association of
Securities Dealers, Inc. and (y) of compliance with federal and state securities
or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of not more than
14
one counsel for the Holders in connection with Blue Sky qualifications of the
Registrable Securities under the laws of such jurisdictions as the Notice
Holders of a majority of the Registrable Securities being sold pursuant to a
Shelf Registration Statement may designate), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
in a form eligible for deposit with The Depository Trust Company), (iii)
duplication and mailing expenses relating to copies of any Shelf Registration
Statement or Prospectus delivered to any Holders hereunder, (iv) fees and
disbursements of counsel for the Company and the fees and disbursements of not
more than one counsel for the Holders in connection with the Shelf Registration
Statement, (v) fees and disbursements of the Trustee and its counsel and of the
registrar and transfer agent for the Common Stock and (vi) Securities Act
liability insurance obtained by the Company in its sole discretion. In addition,
the Company shall pay the internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees performing legal
or accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing by the Company of the Registrable
Securities on any securities exchange on which similar securities of the Company
are then listed and the fees and expenses of any person, including special
experts, retained by the Company.
Section 6. Indemnification; Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each Holder
and each person who controls any Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (each, a "Holder Indemnified
Party"), from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which such Holder Indemnified
Party may incur under the Securities Act, the Exchange Act or otherwise, insofar
as such loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact contained in
any Shelf Registration Statement or Prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated in
any Shelf Registration Statement or in any amendment or supplement thereto or
necessary to make the statements therein not misleading, or arises out of or is
based upon any omission or alleged omission to state a material fact necessary
in order to make the statements made in any Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, in the light of the
circumstances under which they were made, not misleading, except insofar as any
such loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or omission or alleged untrue statement or omission of a
material fact contained in, or omitted from, and in conformity with information
furnished in writing by or on behalf of any Holder to the Company expressly for
use therein.
15
(b) Each Holder, severally and not jointly, agrees to indemnify, defend and
hold harmless the Company, its directors and officers and any person who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (each, a "Company Indemnified Party") from and
against any loss, damage, expense, liability or claim (including the reasonable
cost of investigation) which such Company Indemnified Party may incur under the
Securities Act, the Exchange Act or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in information
furnished in writing by or on behalf of such Holder to the Company expressly for
use in any Shelf Registration Statement or Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arises out of or is
based upon any omission or alleged omission to state a material fact required to
be stated in any Shelf Registration Statement or in any amendment or supplement
thereto or necessary to make the statements therein not misleading, or arises
out of or is based upon any omission or alleged omission to state a material
fact necessary in order to make the statements in any Prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, in the light
of the circumstances under which they were made, not misleading, in connection
with such information. In no event shall the liability of any selling Holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the proceeds received by such Holder upon the sale of the Registrable Securities
pursuant to the Shelf Registration Statement giving rise to such indemnification
obligation.
(c) If any action, suit or proceeding (each, a "Proceeding") is brought
against any person in respect of which indemnity may be sought pursuant to
either subsection (a) or (b) of this Section 6, such person (the "Indemnified
Party") shall promptly notify the person against whom such indemnity may be
sought (the "Indemnifying Party") in writing of the institution of such
Proceeding and the Indemnifying Party shall assume the defense of such
Proceeding; provided, however, that the omission to notify such Indemnifying
Party shall not relieve such Indemnifying Party from any liability which it may
have to such Indemnified Party or otherwise. Such Indemnified Party shall have
the right to employ its own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless the
employment of such counsel shall have been authorized in writing by such
Indemnifying Party in connection with the defense of such Proceeding or such
Indemnifying Party shall not have employed counsel to have charge of the defense
of such Proceeding within 30 days of the receipt of notice thereof or such
Indemnified Party shall have reasonably concluded upon the written advice of
counsel that there may be one or more defenses available to it that are
different from, additional to or in conflict with those available to such
Indemnifying Party (in which case such Indemnifying Party shall not have the
right to direct that portion of the defense of such Proceeding on behalf of the
Indemnified Party, but such Indemnifying Party may employ counsel and
participate in the defense thereof but the fees and expenses of
16
such counsel shall be at the expense of such Indemnifying Party), in any of
which events such reasonable fees and expenses shall be borne by such
Indemnifying Party and paid as incurred (it being understood, however, that such
Indemnifying Party shall not be liable for the expenses of more than one
separate counsel in any one Proceeding or series of related Proceedings together
with reasonably necessary local counsel representing the Indemnified Parties who
are parties to such action). An Indemnifying Party shall not be liable for any
settlement of such Proceeding effected without the written consent of such
Indemnifying Party, but if settled with the written consent of such Indemnifying
Party, such Indemnifying Party agrees to indemnify and hold harmless an
Indemnified Party from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
Indemnified Party shall have requested an Indemnifying Party to reimburse such
Indemnified Party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then such Indemnifying Party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 Business Days after receipt
by such Indemnifying Party of the aforesaid request, (ii) such Indemnifying
Party shall not have reimbursed such Indemnified Party in accordance with such
request prior to the date of such settlement and (iii) such Indemnified Party
shall have given such Indemnifying Party at least 30 days' prior notice of its
intention to settle. No Indemnifying Party shall, without the prior written
consent of any Indemnified Party, effect any settlement of any pending or
threatened Proceeding in respect of which such Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of such Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such Indemnified Party.
(d) If the indemnification provided for in this Section 6 is unavailable to
an Indemnified Party under subsections (a) and (b) of this Section 6 in respect
of any losses, damages, expenses, liabilities or claims referred to therein,
then each applicable Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, damages, expenses, liabilities or
claims (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Holders on the other hand from
the offering of the Registrable Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Holders on the other in connection with the statements or omissions which
resulted in such losses, damages, expenses, liabilities or claims, as well as
any other relevant equitable considerations. The relative fault of the Company
on the one hand and of the Holders on the other shall be determined by reference
to, among other things, whether the untrue statement or alleged untrue statement
of a material fact or
17
omission or alleged omission relates to information supplied by the Company or
by the Holders and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, damages,
expenses, liabilities and claims referred to above shall be deemed to include
any reasonable legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending any Proceeding.
(e) The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 6 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in subsection (d) above.
Notwithstanding the provisions of this Section 6, no Holder shall be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities sold by it were offered to the public exceeds the
amount of any damages which it has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. 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
who was not guilty of such fraudulent misrepresentation. The Holders' respective
obligations to contribute pursuant to this Section 6 are several in proportion
to the respective amount of Registrable Securities they have sold pursuant to a
Shelf Registration Statement, and not joint. The remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 6
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder or any person controlling any Holder, or the Company, or the
Company's officers or directors or any person controlling the Company and (iii)
the sale of any Registrable Security by any Holder.
Section 7. Information Requirements. (a) The Company covenants that, if at
any time before the end of the Effectiveness Period it is not subject to the
reporting requirements of the Exchange Act, it will cooperate with any Holder of
Registrable Securities and take such further action as any Holder of Registrable
Securities may reasonably request in writing (including, without limitation,
making such representations as any such Holder may reasonably request), all to
the extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144, Rule 144A, Regulation S and Regulation D
under the Securities Act and customarily taken in connection with sales pursuant
to such exemptions. Upon the written request of any Holder of Registrable
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such filing requirements, unless such a statement
18
has been included in the Company's most recent report filed with the SEC
pursuant to Section 13 or Section 15(d) of Exchange Act. Notwithstanding the
foregoing, nothing in this Section 7 shall be deemed to require the Company to
register any of its securities (other than the Common Stock) under any section
of the Exchange Act.
(b) The Company shall file the reports required to be filed by it under the
Exchange Act and shall comply with all other requirements set forth in the
instructions to Form S-1 or Form S-3, as the case may be, in order to allow the
Company to be eligible to file registration statements on Form S-1 or Form S-3.
Section 8. Miscellaneous.
(a) No Conflicting Agreements. The Company is not, as of the date hereof, a
party to, nor shall it, on or after the date of this Agreement, enter into, any
agreement with respect to its securities that conflicts with the rights granted
to the Holders of Registrable Securities in this Agreement. The Company
represents and warrants that the rights granted to the Holders of Registrable
Securities hereunder do not in any way conflict with the rights granted to the
holders of the Company's securities under any other agreements.
(b) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, 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 Holders of a majority of
the then outstanding Underlying Common Stock constituting Registrable Securities
(with Holders of Bonds deemed to be the Holders, for purposes of this Section,
of the number of outstanding shares of Underlying Common Stock into which such
Bonds are or would be convertible as of the date on which such consent is
requested). Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders of Registrable Securities may be
given by Holders of at least a majority of the Registrable Securities being sold
by such Holders pursuant to such Shelf Registration Statement; provided that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the immediately preceding sentence. Each
Holder of Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant to
this Section 8(b), whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.
19
(c) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, by telecopier, by courier
guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:
(x) if to a Holder of Registrable Securities, at the most current address
given by such Holder to the Company in a Notice and Questionnaire or any
amendment thereto;
(y) if to the Company, to:
Encysive Pharmaceuticals Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. Given
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(z) if to the Initial Purchasers, to:
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Syndicate Desk
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Syndicate Department
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to (for informational purposes only):
UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
and
20
▇▇ ▇▇▇▇▇ & Co., LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇, Esq
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.
(d) Approval of Holders. 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 (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial Purchasers
or subsequent Holders of Registrable Securities if such subsequent Holders are
deemed to be such 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.
(e) Successors and Assigns. Any person who purchases any Registrable
Securities from the Initial Purchasers or any Holder shall be deemed, for
purposes of this Agreement, to be an assignee of the Initial Purchasers or such
Holder, as the case may be. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties and shall inure
to the benefit of and be binding upon each Holder of any Registrable Securities.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF THAT WOULD REQUIRE THE APPLICATION OF ANY OTHER LAW.
(i) Severability. If any term, provision, covenant or restriction of this
Agreement is held to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby, and the parties hereto shall use its reasonable best
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction, it being
21
intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.
(j) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and the registration rights granted by the
Company with respect to the Registrable Securities. Except as provided in the
Purchase Agreement, there are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and undertakings
among the parties with respect to such registration rights. No party hereto
shall have any rights, duties or obligations other than those specifically set
forth in this Agreement.
(k) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for additional interest under
Section 2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.
22
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
ENCYSIVE PHARMACEUTICALS INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President, Finance and
Administration
Confirmed and accepted as of the date
first above written:
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/ ▇▇▇▇ ▇'▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇'▇▇▇▇▇
Title: Vice President
UBS SECURITIES LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
▇▇ ▇▇▇▇▇ & CO., LLC
By: /s/ ▇▇▇▇▇▇ ▇. Powiss
------------------------------------
Name: ▇▇▇▇▇▇ ▇. Powiss
Title: Managing Director
23