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EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement dated as of July 16, 1999 (this
"Agreement"), among ILEX Oncology, Inc., a Delaware corporation (the "Company"),
and Xxxxx Xxxxxxxx, Xxxxxxxx Xxxxxxx, Xxxxx Xxxxxxxxxxxx, Xxxxxx Xxxx, Xxxxx X.
Xxxx, Tsuneya Xxxx, Xxxx Israel Deaconess Medical Center, Arch Development
Corporation and Xxxxxxx Xxxxxxxxx (collectively, the "Stockholders" or, if
singular, a "Stockholder").
PRELIMINARY STATEMENT
The Company and certain holders of its securities (the "Holders", or if
singular, a "Holder") are parties to the Fourth Amended and Restated
Registration Rights Agreement dated December 11, 1996 (the "Prior Agreement"),
the Registration Rights Agreement dated as of July 9, 1997 ("the "PRN
Agreement") and the Registration Rights Agreement dated as of January 22, 1999
(the "Lilly Agreement"). The Company and certain of the Stockholders are parties
to a Plan of Merger and Acquisition Agreement dated effective July 16, 1999 (the
"Merger Agreement"), pursuant to which the Stockholders shall be issued shares
of Common (as defined herein). The Company desires to grant certain registration
rights to the Stockholders in connection with such issuance of shares.
Therefore, in consideration of the mutual representations and agreements set
forth in this Agreement, the Company and the Stockholders agree as follows:
AGREEMENT
SECTION 1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
"Affiliate" means any entity controlling, controlled by or under common
control with a designated Person. For the purposes of this definition, "control"
shall have the meaning specified as of the date of this Agreement for that word
in Rule 405 promulgated by the Commission under the Securities Act.
"Board" means the Board of Directors of the Company.
"Commission" means the Securities and Exchange Commission, and any
successor thereto.
"Common" means the Company's Common Stock, $.01 par value per share.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Immediate Family" shall mean spouses, descendants (including adopted
children) and spouses of descendants.
"Lilly Stock" means, for purposes of this definition, the Registrable
Stock (as defined in the Lilly Agreement) of Lilly under the Lilly Agreement.
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"PRN Stock" means, for purposes of this definition, the Registrable
Stock (as defined in the PRN Agreement) of PRN under the PRN Agreement.
"Person" means an individual, partnership, corporation, business trust,
limited liability company, joint stock company, trust, unincorporated
association, joint venture, or other entity of whatever nature.
"Registrable Stock" means any shares of Common acquired by the
Stockholders pursuant to the terms and provisions of the Merger Agreement and
any and all shares of Common or other securities issued with respect to such
shares by way of stock splits, stock combinations and similar events affecting
the Registrable Stock. As to any particular Registrable Stock, such securities
will cease to be Registrable Stock when they shall have been (x) effectively
registered under the Securities Act and sold by the holder thereof in accordance
with such registration, or (y) sold to the public pursuant to Rule 144 or Rule
701 of the Commission, or any successor rules.
"Rule 144" means Rule 144 promulgated by the Commission under the
Securities Act, as such rule may be amended from time to time, or any successor
rule thereto.
"Rule 701" means Rule 701 promulgated by the Commission under the
Securities Act, as such rule may be amended from time to time, or any successor
rule thereto.
"Securities" means any debt or equity securities of the Company,
whether now or hereafter authorized, and any instrument convertible into, or
exercisable or exchangeable for, Securities or a Security.
"Securities Act" means the Securities Act of 1933, as amended prior to
or after the date of this Agreement, or any federal statute or statutes which
shall be enacted to take the place of such Act, together with all rules and
regulations promulgated thereunder.
SECTION 2. DEMAND REGISTRATION.
2.1 The Stockholders shall be entitled to two (2) demand
registrations (a "Demand Registration") between July 16, 1999 and July 16, 2001,
by providing a written notice to the Company requesting that the Company
register any eligible Registrable Stock specified in the notice, under the
Securities Act and under other relevant securities laws, for disposition in
accordance with methods stated in the notice.
2.2 When it receives a registration notice under SECTION 2.1
above, the Company shall use its best efforts to effect the Demand Registration
under the Securities Act of Registrable Stock specified in the registration
notice under SECTION 2.1 to the extent requisite to permit disposition by the
Stockholders in accordance with the intended methods of disposition described in
the registration notice.
2.3 The Company shall use its best efforts to qualify for
registration on Form S-3 or any comparable or successor form or forms.
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SECTION 3. INCIDENTAL/PIGGYBACK REGISTRATION. Each time the Company
proposes to register any of its Securities under the Securities Act for its own
account or for the account of other Security holders or both, it will give at
least 30 days advance written notice of its intention to do so to the
Stockholders. The Stockholders may then specify, by written notice to the
Company within 25 days of the date of the Company's notice, the number of shares
of Registrable Stock held by it that it wishes to include in the Company's
proposed registration (a "Piggyback Registration"). Subject to the market
cutback limitations of SECTION 8 of this Agreement, the Company will use its
best efforts to effect the Piggyback Registration under the Securities Act of
Registrable Stock specified by the Stockholders under this SECTION 3.
SECTION 4. LIMITATIONS ON REGISTRATION RIGHTS. Notwithstanding any
contrary provision of this Agreement:
(a) the Company shall not be required to effect (i) any Demand
Registration that seeks to register and offer less than $500,000
aggregate amount of Registrable Stock, and (ii) per each twelve (12)
month period, more than one Demand Registration; provided, however,
that a demand for a Demand Registration shall not count as a
registration under this SECTION 4(a) if the registration statement
filed with respect to such registration covering all shares of
Registrable Stock specified in notices received as aforesaid (subject
to the provisions of SECTION 8.1), for sale in accordance with the
method of disposition specified by the Stockholders, is not declared
effective by the Commission and kept effective by the Company in
accordance with the planned distribution thereunder, subject to SECTION
5.2, (unless, except as provided in SECTION 14(b), such Demand
Registration has not become effective due solely to the fault of the
Stockholders and the Stockholders fail to bear all Registration
Expenses in connection therewith, in which case such registration shall
count as a Demand Registration), and the last of any subsequent Demand
Registration will not count as one of the permitted Demand
Registrations unless the Stockholders are able to register and sell at
least 90% of the shares of the Registrable Stock requested to be
included in such registration; and
(b) The Company will not be obligated to effect any Demand
Registration within ninety (90) days after the effective date of a
Demand Registration or a registration in which the Stockholders were
given piggyback rights pursuant to SECTION 3, provided in either case
all shares of Registrable Stock requested to be included were sold in
such registration. The Company may postpone for up to ninety (90) days
the filing or the effectiveness of a registration statement for a
Demand Registration if the Company, in its sole discretion, determines
that such registration would reasonably be expected to have an adverse
effect (i) on any proposal or plan by the Company or any of its
subsidiaries to engage in any acquisition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer
or similar transaction, or (ii) any material corporate development,
provided that in such event, the Stockholders will be entitled to
withdraw such request and, if such request is withdrawn, such
registration will not count as one of the permitted Demand
Registrations and the Company will pay all Registration Expenses (as
defined in Section 6 hereof) in connection with such registration.
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(c) SECTION 3 of this Agreement shall not apply to a
registration effected solely to offer securities for sale pursuant to,
or in connection with (i) an employee benefit plan, or (ii) a
transaction subject to Rule 145 under the Securities Act or in an
exchange offer registered on Form S-4 or any successor form to Form
S-4, or to any registration on a form which does not permit inclusion
of Registrable Stock pursuant to Commission rule or practice.
SECTION 5. REGISTRATION PROCEDURES.
5.1 Whenever the Company is required by this Agreement to
include any Registrable Stock in a registration under the Securities Act, the
Company will, as expeditiously as possible:
(a) before filing each registration statement or prospectus or
amendment or supplement thereto with the Commission, furnish counsel
for the Stockholders with copies of all such documents proposed to be
filed, which shall be subject to the reasonable approval of such
counsel;
(b) prepare and file with the Commission a registration
statement with respect to such Registrable Stock with respect to such
securities including executing an undertaking to file post-effective
amendments and use its best efforts to cause such registration
statement to become and remain effective for the period of distribution
contemplated thereby (subject to Section 5.2 below);
(c) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for the period of distribution contemplated thereby
(subject to SECTION 5.2 below) and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all
Registrable Stock covered by such registration statement in accordance
with the sellers' intended methods of disposition set forth in such
registration statement for such period;
(d) promptly prepare and file with the Commission, and notify
the Stockholders immediately after the filing of, such amendment or
supplement to such registration statement or prospectus as may be
necessary to correct any statements or omissions if, during such
periods as a prospectus relating to such Securities is required to be
delivered under the Securities Act, any event shall have occurred as
the result of which any such prospectus or any other prospectus as then
in effect would include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in
the light of the circumstances in which they were made, not misleading,
and notify the Stockholders and underwriter immediately after its
discovery of such event;
(e) furnish to the underwriters and the Stockholders such
numbers of copies of such registration statement, each amendment and
supplement thereto (in each case, including all exhibits), the
prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such underwriters
or the Stockholders may
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reasonably request in order to facilitate the disposition of the
Registrable Stock in accordance with such registration statement;
(f) use its best efforts to register or qualify any
Registrable Stock covered by such registration statement under the
securities or blue sky laws of such jurisdictions within the United
States of America as the Stockholders or the underwriters reasonably
request, and to take any other acts which a seller or the underwriters
may reasonably request under such securities or blue sky laws to enable
the consummation of the disposition in such jurisdictions of such
Registrable Stock (provided, however, that the Company shall not be
required under this Agreement (i) to qualify generally to do business
as a foreign corporation in any jurisdiction (other than Massachusetts)
in which it would not otherwise be required to qualify, or (ii) to
consent to general service of process in any such jurisdiction (other
than Massachusetts) unless the Company is already subject to service in
such jurisdiction);
(g) provide a transfer agent and registrar for all Registrable
Stock sold under the registration statement not later than the
effective date of the registration statement;
(h) use its best efforts to cause all Registrable Stock sold
under the registration statement to be listed on each securities
exchange or to be qualified and eligible for trading in any automated
quotation system, if any, on which similar Securities issued by the
Company are then listed or traded or, if no such listing or
qualification has then occurred, to use its best efforts to cause such
Securities to be so listed or qualified on an exchange or in a trading
system that is reasonably acceptable to the Company and the Holders of
such Registrable Stock;
(i) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other
actions as the underwriters, if any, or the Stockholders may reasonably
request in order to expedite or facilitate the disposition of such
Registrable Stock (including, without limitation, effecting a stock
split or a combination of shares);
(j) advise the Stockholders, immediately after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop
order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any
proceeding for such purpose and promptly use reasonable efforts to
prevent the issuance of any stop order or to obtain its withdrawal if
such stop order should be issued;
(k) make available for inspection by the Stockholders, any
underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent
retained by the Stockholders or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such
seller or underwriter in connection with such registration statement,
all subject to such limitations as the Company reasonably deems
appropriate in order to protect the Company's confidential or
proprietary information;
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(l) comply with all applicable rules and regulations under the
Securities Act and Exchange Act;
(m) if the offering is underwritten and at the request of the
Stockholders, use its best efforts to furnish on the date that
Registrable Stock are delivered to the underwriters for sale pursuant
to such registration: (i) an opinion dated such date of counsel
representing the Company for the purposes of such registration,
addressed to the underwriters to such effects as reasonably may be
requested by counsel for the underwriters and (ii) a letter dated such
date from the independent public accountants retained by the Company,
addressed to the underwriters stating that they are independent public
accountants within the meaning of the Securities Act and that, in the
opinion of such accountants, the financial statements of the Company
included in the registration statement or the prospectus, or any
amendment or supplement thereof, comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act, and such letter shall additionally cover such other financial
matters (including information as to the period ending no more than
five (5) business days prior to the date of such letter) with respect
to such registration as such underwriters reasonably may request;
(n) make available for inspection by the Stockholders, any
underwriter participating in any distribution pursuant to such
registration statement, and any attorney, accountant or other agent
retained by the Stockholders or underwriter, reasonable access to all
financial and other records, pertinent corporate documents and
properties of the Company, as such parties may reasonably request, and
cause the Company's officers, directors and employees to supply all
information reasonably requested by the Stockholders, underwriter,
attorney, accountant or agent in connection with such registration
statement;
(o) cooperate with the Stockholders and the managing
underwriter, if any, to facilitate the timely preparation and delivery
of certificates representing Registrable Stock to be sold, such
certificates to be in such denominations and registered in such names
as the Stockholders or the managing underwriter may request at least
two (2) business days prior to any sale of Registrable Stock; and
(p) permit any Stockholder, if, in the sole and exclusive good
faith judgment of the Company, such Stockholder might be deemed to be a
controlling person of the Company, to participate in good faith in the
preparation of such registration statement.
5.2 For purposes of this Agreement, the period of distribution of
Registrable Stock in a firm commitment underwritten public offering shall be
deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Registrable Stock
in any other registration shall be deemed to extend until the earlier of the
sale of all Registrable Stock covered thereby or 180 days after the effective
date thereof, provided, however, in the case of any registration of Registrable
Stock on Form S-3 or a comparable or successor form which are intended to be
offered on a continuous or delayed basis, such 180-day period shall be extended,
if necessary, to keep the registration statement effective until all such
Registrable Stock are sold, provided that Rule 415, or any successor rule under
the Securities Act, permits an offering on a continuous or delayed basis, and
provided further that applicable rules under the Securities Act
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governing the obligation to file a post-effective amendment, permit, in lieu of
filing a post-effective amendment which (y) includes any prospectus required by
Section 10(a)(3) of the Securities Act or (z) reflects facts or events
representing a material or fundamental change in the information set forth in
the registration statement, the incorporation by reference of information
required to be included in (y) and (z) above contained in periodic reports filed
pursuant to Section 13 or 15(d) of the Exchange Act in the registration
statement.
SECTION 6. EXPENSES. The Company will pay all Registration Expenses (as
defined below) in connection with each Demand Registration and Piggyback
Registration of Registrable Stock permitted pursuant to SECTIONS 2 AND 3 of this
Agreement; provided, however, that the aggregate maximum Registration Expenses
for legal fees and disbursements, accounting fees and disbursements and filing
fees payable by the Company to third parties in connection with all Demand
Registrations shall be $100,000 and any such expenses payable to third parties
in excess of $100,000 shall be borne pro rata by the selling stockholders based
on the number of shares to be sold in such registration. For purposes of this
SECTION 6, "Registration Expenses" means all expenses incident to the Company's
performance of or compliance with SECTION 2 OR SECTION 3 of this Agreement,
including, without limitation, all registration, filing and National Association
of Securities Dealers, Inc. fees, all fees and expenses of complying with
securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the reasonable fees and disbursements
of counsel for the Company and of its independent public accountants, including
the expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, the reasonable fees and
disbursements of one law firm retained by the holders of Registrable Stock being
registered, premiums and other costs of policies of insurance obtained by the
Company against liabilities arising out of the public offering of the
Registrable Stock being registered but excluding all agency fees and
commissions, underwriting discounts and commissions and transfer taxes, if any.
SECTION 7. INDEMNIFICATION.
7.1 In the event of any registration of any of its Registrable
Stock under the Securities Act pursuant to this Agreement, the Company agrees,
to the fullest extent permitted by law, to indemnify and hold harmless the
Stockholders, and each officer, partner, director and Affiliate of such seller,
against any losses, claims, damages or liabilities, joint or several, arising
out of or based upon:
(a) any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in any
registration statement under which such Securities were registered
under the Securities Act, any preliminary prospectus or final
prospectus contained in any registration statement, or any other
materials deemed to be a prospectus pursuant to the Securities Act, or
any Securities being registered, or any amendment or supplement
thereto, or any blue sky application or other document executed by the
Company specifically for that purpose or based upon written information
furnished by the Company filed in any state or other jurisdiction in
order to qualify any or all of the Registrable Stock under the
securities laws thereof (any such application, document or information
herein called a "Blue Sky Application"), or
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(b) any omission or any alleged omission to state in any such
document a material fact required to be stated therein or necessary to
make the statements therein not misleading, or
(c) any violation by the Company or its agents (other than by
the indemnitee claiming indemnification hereunder) of the Securities
Act or any rule or regulation promulgated under the Securities Act
applicable to the Company or its agents (other than by the indemnitee
claiming indemnification hereunder) and relating to action or inaction
required of the Company in connection with such registration,
except insofar as any such loss, claim, damage or liability is:
(i) caused by or contained in any information furnished in
writing to the Company by the Stockholders expressly for use in
connection with such registration; or
(ii) caused by the Stockholders' failure to deliver a copy of
the registration statement or prospectus or any amendment or supplement
thereto as required by the Securities Act or the rules or regulations
thereunder to be delivered by such seller, if such delivery would have
cured the defect giving rise to such loss, claim, damage or liability;
or
(iii) caused by the delivery by the Stockholders of a
prospectus or preliminary prospectus or any amendment or supplement
thereto after receipt of notice from the Company that it should no
longer be used.
In connection with an underwritten offering, the Company will indemnify
such underwriters, their officers and directors and each Person who
controls (within the meaning of the Securities Act) such underwriters
to the same extent as provided above with respect to the Stockholders.
The Company shall reimburse each Person indemnified pursuant to this
SECTION 7.1 for any reasonable legal or other expenses incurred in
connection with investigating or defending any loss, claim, damage,
liability or action indemnified against. The reimbursements required by
this SECTION 7.1 shall be made by periodic payments during the course
of the investigation or defense, as and when bills are received or
expenses incurred. The indemnities provided pursuant to this SECTION
7.1 shall remain in force and effect regardless of any investigation
made by or on behalf of the indemnified party and shall survive any
transfer of Registrable Stock by the Stockholders.
7.2 In the event of any registration of any Registrable Stock
under the Securities Act pursuant to this Agreement, each Stockholder agrees to
furnish to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any registration statement,
prospectus and any amendment or supplement thereto in connection with the
registration.
7.3 To the fullest extent permitted by law, and subject to the
limitation set forth in the last sentence of this Section 7.3, each Stockholder
agrees to indemnify and hold harmless the Company, its directors and officers,
and each Affiliate of the Company, against:
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(a) any losses, claims, damages or liabilities, joint or several,
arising out of or based upon:
(i) any alleged untrue statement of any material fact
contained on the effective date thereof, in any registration statement
under which such Securities were registered under the Securities Act,
any preliminary prospectus or final prospectus contained therein, or
any summary prospectus contained therein, or any amendment or
supplement thereto, or
(ii) any alleged omission to state in any such document a
material fact required to be stated therein or necessary to make the
statements therein not misleading,
but only insofar as any such loss, claim, damage or liability is caused
by any information furnished in writing to the Company by such
Stockholder expressly for use in connection with such registration, and
excluding any such loss, claim, damage or liability which is caused by
such statements, or caused by such omissions, based upon the authority
of an expert as defined in the Securities Act (but only if such
Stockholder had no grounds to believe, and did not believe, that the
statements made on the authority of an expert were untrue or that there
was an omission to state a material fact); and
(b) any losses, claims, damages or liabilities, joint or
several, arising out of or based upon any failure by such Stockholder
to deliver a copy of the registration statement or prospectus or any
amendment or supplement thereto if required by the Securities Act or
the rules or regulations thereunder to be delivered by such
Stockholder, if such delivery would have cured the defect giving rise
to such loss, claim, damage or liability. In connection with an
underwritten offering, each Stockholder will indemnify such
underwriters, their officers and directors and each Person who controls
(within the meaning of the Securities Act) such underwriters to the
same extent as provided above with respect to the Company and other
sellers. The Stockholders shall reimburse each Person indemnified
pursuant to this SECTION 7.3 in connection with investigating or
defending any loss, claim, damage, liability or action indemnified
against. The reimbursements required by this SECTION 7.3 shall be made
by periodic payments during the course of the investigation or defense,
as and when bills are received or expenses incurred. The indemnities
provided pursuant to this SECTION 7.3 shall remain in force and effect
regardless of any investigation made by or on behalf of the indemnified
party and shall survive any transfer of Registrable Stock by the
Stockholders. Notwithstanding any contrary provision of this Agreement,
however, the liability under this SECTION 7 of the Stockholders shall
be limited in the aggregate, with respect to the claims of all
indemnified Persons taken as a whole, to the amount of proceeds
received by the Stockholders from the sale of the Registrable Stock
sold by the Stockholders pursuant to such registration statement.
7.4 Each party entitled to indemnification under this SECTION
7 (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 counsel for the Indemnifying
Party, who shall conduct
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the defense of such claim or any litigation resulting therefrom, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld, denied or delayed) and the Indemnified Party may participate in such
defense at such party's expense other than reasonable costs of investigation and
of liaison with counsel so selected (unless the Indemnified Party shall have
reasonably concluded that there may be reasonable defenses available to it which
are different from or additional to those available to the Indemnifying Party or
that the interests of the Indemnified Party reasonably may be deemed to conflict
with the interests of the Indemnifying Party, in which case the Indemnified
Party shall have the right to select one separate counsel and to assume such
legal defenses and otherwise to participate in the defense of such action, with
the reasonable expenses and fees of such separate counsel and other reasonable
expenses related to such participation to be reimbursed by the Indemnifying
Party as incurred), and provided further 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 7 unless and to the extent the
Indemnifying Party is materially prejudiced thereby. 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 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. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
7.5 If the indemnification provided for in this SECTION 7 is
held by a court of competent jurisdiction (by the entry of a final judgment or
decree by such court and the expiration of time to appeal or the denial of the
last right of appeal) to be unavailable to an Indemnified Party with respect to
any loss, liability, claim, damage or expense referred to herein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such loss, liability, claim, damage or expense in such proportion as
is appropriate to reflect the relative fault of the Indemnifying Party on the
one hand and of the Indemnified Party on the other in connection with the
statements or omissions which resulted in such loss, liability, claim, damage or
expense, as well as any other relevant equitable considerations. The relative
fault of the Indemnifying Party and of the Indemnified Party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the Indemnifying Party or by the Indemnified Party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. Notwithstanding any contrary
provision of this Agreement, however, the liability under this SECTION 7.5 of
each Holder and each Stockholder which is a seller of Registrable Stock shall be
limited in the aggregate, with respect to the claims of all indemnified Persons
taken as a whole, to the amount of proceeds received by the indemnifying seller
from the sale of the Registrable Stock sold by the indemnifying seller pursuant
to such registration statement
7.6 Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with any underwritten public offering
contemplated by this Agreement are in conflict with the foregoing provisions,
the provisions in such underwriting agreement shall be controlling, except that
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under no circumstances should the Stockholders' indemnification obligations
pursuant to any such underwriting agreement exceed its obligations under
SECTIONS 7.3 AND 7.5 of this Agreement.
7.7 The foregoing indemnity agreement of the Company and the
Stockholders is subject to the condition that, insofar as they relate to any
loss, claim, liability or damage made in a preliminary prospectus but eliminated
or remedied in the amended prospectus on file with the Commission at the time
the registration statement in question becomes effective or the amended
prospectus filed with the Commission pursuant to Commission Rule 424(b) (the
"Final Prospectus"), such indemnity agreement shall not inure to the benefit of
any underwriter if a copy of the Final Prospectus was furnished to the
underwriter and was not sent or furnished to the person if required by law so to
have been delivered asserting the loss, liability, claim or damage at or prior
to the time such action is required by the Securities Act, and if the Final
Prospectus would have cured the defect giving rise to such loss, liability,
claim or damage.
7.8 The indemnities and obligations provided in this SECTION 7
shall survive the transfer of any Registrable Stock by the Stockholders.
SECTION 8. MARKETING RESTRICTIONS.
8.1 If:
(a) There is to be a registration of Common under SECTION 2 or
SECTION 3 of this Agreement; and
(b) the offering proposed to be made is to be an underwritten
public offering; and
(c) the managing underwriters of such public offering furnish
a written opinion that the total amount of Securities to be included in
such offering would exceed the maximum number of shares of Common (as
specified in such opinion) which can be marketed at a price reasonably
related to the current market value of such Common and without
otherwise materially and adversely affecting such offering (the
"Underwriter Maximum"),
then the rights of (i) the Stockholders, (ii) the Holders, (iii) the holders of
other Securities having the right to include such Securities in such
registration and (iv) of the Company to participate in such offering shall be in
the following order of priority:
(i) FIRST, (1) if such registration was not initiated by the
Company as a primary registration, then the Person or Persons
requesting such registration pursuant to a Demand Registration of such
Person or Persons shall be entitled to participate in accordance with
the relative priorities, if any, that shall exist among them, subject
to the limitation that a number of shares of Investor Registrable Stock
(as such term is defined in the Prior Agreement) equal to 35% of the
Underwriter Maximum shall also be entitled to participate therein, with
such shares of Investor Registrable Stock being allocated pro rata
among the Holders of Investor Registrable Stock owned by such Holders,
and (2) if the Company has initiated such registration as a primary
registration, then the Company shall be entitled to
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participate up to the full number of shares of stock which the Company
deems necessary or advisable to fulfill its strategic capital
requirements;
(ii) SECOND, the number of shares of Investor Registrable
Stock requested to be included therein, up to the remainder of such
Underwriter Maximum (after taking into account the number of shares to
be sold pursuant to clause (i) above) allocated pro rata among the
Holders of such Investor Registrable Stock on the basis of the number
of shares of Investor Registrable Stock owned by such Holders, with
further successive pro rata allocations among the Holders of Investor
Registrable Stock if any such Holder of Investor Registrable Stock has
requested the registration of fewer than all of such shares of Investor
Registrable Stock it is entitled to register;
(iii) THIRD, the number of shares of CTRC Registrable Stock (
as such term is defined in the Prior Agreement) requested to be
included therein, up to such Underwriter Maximum (after taking into
account the number of shares to be sold pursuant to clauses (i) and
(ii) above) allocated pro rata among the Holders of such CTRC
Registrable Stock on the basis of the number of shares of CTRC
Registrable Stock owned by such Holders, with further successive pro
rata allocations among the Holders of CTRC Registrable Stock if any
such Holder of CTRC Registrable Stock has requested the registration of
fewer than all of such shares of CTRC Registrable Stock it is entitled
to register
(iv) FOURTH, the number of shares of Management Registrable
Stock (as defined in the Prior Agreement) and Vector Registrable Stock
(as such term is defined in the Prior Agreement) requested to be
included therein, up to such Underwriter Maximum (after taking into
account the number of shares of securities to be sold pursuant to
clauses (i), (ii) and (iii) above) allocated pro rata among the Holders
of such Management Registrable Stock and Vector Registrable Stock on
the basis of the number of shares of Management Registrable Stock and
Vector Registrable Stock owned by such Holders, with further successive
pro rata allocations among the Holders of Management Registrable Stock
and Vector Registrable Stock if any such Holder has requested the
registration of fewer than all of such shares of Management Registrable
Stock or Vector Registrable Stock he is entitled to register;
(v) FIFTH, the number of shares of PRN Stock requested to be
included therein, up to the Underwriter Maximum (after taking into
account the number of shares of securities to be sold pursuant to
clauses (i), (ii), (iii) and (iv) above) allocated pro rata among the
Holders of such PRN Stock on the basis of the number of shares of PRN
Stock owned by such Holders shall be entitled to participate, with
further successive pro rata allocations among the Holders of PRN Stock
if any such Holder has requested the registration of fewer than all of
such shares of PRN Stock it is entitled to register;
(vi) SIXTH, the number of shares of Lilly Stock requested to
be included therein, up to the Underwriter Maximum (after taking into
account the number of shares of securities to be sold pursuant to
clauses (i), (ii), (iii), (iv) and (v) above allocated pro rata among
the holders of such Lilly Stock on the basis of the number of shares of
Lilly Stock owned by such holders shall be entitled to participate,
with further successive pro rata
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allocations among the holders of Lilly Stock if any such holder has
requested the registration of fewer than all of such shares of Lilly it
is entitled to register; and
(vii) SEVENTH, the number of shares of Registrable Stock
requested to be included therein, up to the Underwriter Maximum (after
taking into account the number of shares of securities to be sold
pursuant to clauses (i), (ii), (iii), (iv), (v) and (vi) above)
allocated pro rata among the holders of such Registrable Stock on the
basis of the number of shares of Registrable Stock owned by such
holders shall be entitled to participate, with further successive pro
rata allocations among the holders of Registrable Stock if any such
holder has requested the registration of fewer than all of such shares
of Registrable Stock it is entitled to register;
(viii) EIGHTH, other securities requested to be included in
such registration up to the Underwriter Maximum (after taking into
account the securities to be sold pursuant to clauses (i), (ii), (iii),
(iv), (v), (vi) and (vii) above).
8.2 In connection with any offering involving an underwriting of
Registrable Stock pursuant to SECTION 2 of this Agreement, the Company shall not
be required to include any of the Registrable Stock of a holder in such offering
unless such holder agrees to the terms of the underwriting agreed to between the
Company and the underwriter or underwriters selected by the Company.
SECTION 9. LOCKUP AGREEMENT. The Stockholders agree in connection with
the registration of any Registrable Stock in a public offering that, upon the
request of the Company or the underwriters managing such underwritten offering
of the Company's Securities, they will not sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of any Securities of
the Company (other than the securities included in the registration and other
than a transfer by a Stockholder to an Affiliate of such Stockholder) without
the prior written consent of the Company or such underwriters, as the case may
be, for such period of time (not to exceed 180 days) from the effective date of
such registration as the Company or the underwriters may specify, subject to the
Company obtaining similar agreements from the Company's executive officers and
directors, any holders of five (5) percent or more of the Company's then issued
and outstanding Common, and any other holders of Securities participating in
such registration.
SECTION 10. COMPLIANCE WITH RULE 144. With a view to making available
the benefits of certain rules and regulations of the Commission which may permit
the sale of restricted securities to the public without registration, the
Company agrees to:
(a) make and keep public information available as those terms
are understood and defined in Rule 144, at all times from and after
ninety (90) days following the effective date of the first registration
under the Securities Act filed by the Company for an offering of its
Securities to the general public and for so long as the Company is
subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act;
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(b) use its best efforts to 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 at any time after it has
become subject to such reporting requirements; and
(c) so long as the Stockholders own any Securities, and are
not eligible to sell all such Securities under paragraph (k) of Rule
144, furnish to the Stockholders upon request, a written statement by
the Company as to its compliance with the reporting requirements of
Rule 144 (at any time from and after ninety (90) days following the
effective date of the first registration statement filed by the Company
for an offering of its securities to the general public), and of the
Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and
documents so filed as the Stockholders may reasonably request in
availing themselves of any rule or regulation of the Commission
allowing the Stockholders to sell any such securities without
registration.
SECTION 11. ASSIGNABILITY OF REGISTRATION RIGHTS. The rights set forth
in this Agreement shall accrue to each subsequent holder of Registrable Stock
who (i) shall have executed a written consent agreeing to be bound by the terms
and conditions of this Agreement, and (ii) owns greater than 12,500 shares of
Registrable Stock (subject to appropriate adjustment for stock splits, stock
combinations and similar events affecting the Registrable Stock).
SECTION 12. DESIGNATION OF UNDERWRITER. The Company shall select the
managing underwriter(s) and all other investment banking advisers to the Company
for all other registrations that may be effected from time to time by the
Company.
SECTION 12. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
(a) No Person may participate in any registration hereunder
which is underwritten unless such Person (i) agrees to sell such
Person's securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to
approve such arrangements (including, without limitation, pursuant to
the terms of any over allotment or "green shoe" option requested by the
managing underwriter(s)), (ii) furnishes to the Company such
information regarding such Person, the Registrable Stock of such Person
to be registered and the intended method of disposition of such
Registrable Stock, and (iii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting
arrangements.
(b) If the Stockholders disapprove of the terms of the
underwriting, the Stockholders may elect to withdraw therefrom by
written notice to the Company and the managing underwriter; provided
that if the Stockholders withdraw, (i) if such withdrawal occurs prior
to the registration statement being filed with the Commission, the
Stockholders shall not be responsible for the Registration Expenses in
connection with such registration, and (ii) if such withdrawal occurs
subsequent to the filing of the registration statement with the
Commission, then the Stockholders shall be responsible for that portion
of the Registration Expenses directly resulting from such withdrawal;
provided, however, that if at
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the time of such withdrawal, the Stockholders have learned of a
material adverse change in the conditions, business or prospects of the
Company from that known to them at the time of their request, then the
Stockholders shall not be required to pay any of such expenses.
(c) Each Person that is participating in any registration
hereunder agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in SECTION 5.1(d)
above, such Person will forthwith discontinue the disposition of its
Registrable Stock pursuant to the registration statement until such
Person's receipt of the copies of a supplemented or amended prospectus
as contemplated by such SECTION 5.1(d).
SECTION 14. MISCELLANEOUS.
14.1 Modifications; Amendment. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated unless
effected by a writing executed and delivered by the Company and the
Stockholders.
14.2 Severability. In the event that any court or any
governmental authority or agency declares all or any part of any Section of this
Agreement to be unlawful or invalid, such unlawfulness or invalidity shall not
serve to invalidate any other Section of this Agreement, and in the event that
only a portion of any Section is so declared to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate the balance of such
Section.
14.3 Successors and Assigns . Subject to Section 11, this
Agreement is binding upon and inures to the benefit of the Company, its
successors and assigns, and the Stockholders, their respective successors and
assigns, and legal representatives.
14.4 Notices . All communications in connection with this
Agreement shall be in writing and shall be deemed properly given if hand
delivered or sent by telecopier or overnight courier with adequate evidence of
delivery or sent by registered or certified mail, return receipt requested, and,
if to the Stockholders, at each Stockholder's address as shown on the books of
the Company or its transfer agent, and if to the Company, at its offices at:
ILEX ONCOLOGY, INC.
11550 I.H. 00 Xxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: President
Any notice called for hereunder shall be deemed given when received.
14.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas without application
of the choice of laws provisions of such laws.
14.6 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
shall together constitute one and the same
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instrument. A written consent executed pursuant to Section 11 of this Agreement
shall be deemed to be part of, and constitute a counterpart of, this Agreement.
14.7 Headings. The headings used herein are solely for the
convenience of the parties and shall not serve to modify or interpret the text
of the Sections at the beginning of which they appear.
14.8 Entire Agreement. This Agreement embodies the entire
agreement and understanding among the Company and the Stockholders and
supersedes all prior oral and written agreements and understandings relating to
the subject matter hereof.
14.9 Waiver. Any waiver or consent under this Agreement shall
be effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent except as
specifically set forth in such waiver or consent. The election of any remedy by
a party hereto shall not constitute a waiver of the right of such party to
pursue other available remedies. No notice to or demand on a party not expressly
required under this Agreement shall entitle the party receiving such notice or
demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
14.10 Specific Performance. The Company recognizes that the
rights of the Stockholders under this Agreement are unique and, accordingly, the
Stockholders shall, in addition to such other remedies as may be available to
them at law or in equity, have the right to enforce their rights hereunder by
actions for injunctive relief and specific performance to the extent permitted
by law.
14.11 Grant of Registration Rights. The Company shall not
hereafter grant to any third party any registration rights more favorable than,
or in any way conflicting with, any of those contained herein, so long as any of
the registration rights under this Agreement remain in effect, provided, in any
event, (i) any grant of demand or required registration rights shall provide
that the Stockholders have incidental or "piggyback" registration rights with
respect thereto in accordance with the provisions of SECTION 2 hereof, (ii) such
rights shall not become effective prior to the rights of the Stockholders
hereunder, and (iii) the recipients of such rights shall be subject to
provisions comparable to those set forth in SECTION 9 hereof.
[signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day first above written.
ILEX ONCOLOGY, INC.
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Xxxxxxx X. Love, President and Chief Executive Officer
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Xxxxx Xxxxxxxx, Individually
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Xxxxxxxx Xxxxxxx, Individually
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Xxxxx Xxxxxxxxxxxx, Individually
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Xxxxxx Xxxx, Individually
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Xxxxx X. Xxxx, Individually
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Tsuneya Ohno, Individually
Xxxx Israel Deaconess Medical Center
By:
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Name:
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Title:
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Arch Development Corporation
By:
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Name:
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Title:
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