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EXHIBIT 5.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of October 22, 1997, by and among CytRx Corporation, a Delaware
corporation (the "Company"), and GUNDYCO in trust for R.R.S.P. 000-00000-00,
Excalibur Limited Partnership, Pine Street Asset Management, Xxxxxxx X. Xxxxxx
and Xxxxx Xxxxxxx (each, an "Investor" and collectively, the "Investors").
BACKGROUND
A. Pursuant to the terms of a Private Securities Subscription Agreement,
dated as of October 22, 1997 (as the same may be amended, the "Subscription
Agreement"), by and among the Company and the Investors, the Investors shall
purchase the $2,000,000 aggregate principal amount of 6% Convertible Debentures
Due _____________ of the Company (together with up to $2,000,000 additional
principal amount of such Debentures, if and to the extent the Company exercises
its option to issue such additional amounts of such Convertible Debentures, the
"Debentures"), which may be converted into shares of the $.001 par value per
share common stock of the Company (the "Common Stock").
B. Pursuant to the Subscription Agreement, the Investors shall acquire
warrants to purchase up to _________ shares of the Common Stock (the
"Warrants").
C. The Company has agreed to issue to Xxxxxxx, Xxxxx Capital Partners,
L.P. (the "Placement Agent") 3,000 shares of the Common Stock as a placement fee
in accordance with the engagement letter dated September 30, 1997, between the
Company and the Placement Agent (the "Engagement Letter").
D. The Company has agreed, as a condition precedent to Investor's
obligations under the Subscription Agreement, to grant the Investors certain
registration rights.
E. The Company and the Investors desire to define such registration
rights on the terms and subject to the conditions herein set forth.
AGREEMENT
In consideration of the foregoing premises and for other good and
valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms have the respective
meanings set forth below:
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Commission: shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act;
Effective Date: shall mean the Closing Date, as defined by the
Subscription Agreement;
Exchange Act: shall mean the Securities Exchange Act of 1934, as
amended;
Holder: shall mean any holder of Registrable Securities;
Initiating Holder: shall mean any Holder or Holders who in the aggregate
are Holders of more than 50% of the then outstanding Registrable Securities;
Person: shall mean an individual, partnership, joint stock company,
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof;
register, registered and registration: shall mean a registration effected
by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
Registrable Securities: shall mean (A) the shares of Common Stock into
which the Debentures are convertible, or for which the Warrants are exercisable,
(B) any securities of the Company issued as a dividend or other distribution
with respect to, or in exchange for or in replacement of, the shares of Common
Stock referred to in clause (A), and (C) the shares of Common Stock issued to
the Placement Agent pursuant to the Engagement Letter; provided, that
Registrable Securities shall not include (i) securities with respect to which a
registration statement with respect to the sale of such securities has become
effective under the Securities Act and all such securities have been disposed of
in accordance with such registration statement, (ii) such securities as may be
sold pursuant to Rule 144 (or any successor provision thereto) under the
Securities Act ("Rule 144"), (iii) such securities as are acquired by the
Company or any of its subsidiaries or (iv) Common Stock into which Debentures
are convertible or for which Warrants are exercisable, if such Debentures have
not been converted or such Warrants exercised, and such Debentures or Warrants
cease to be outstanding;
Registration Expenses: shall mean all expenses incurred by the Company in
compliance with Sections 3(a), (b) and (c) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
all the Holders, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company);
Security, Securities: shall have the meaning set forth in Section 2(1) of
the Securities Act;
Securities Act: shall mean the Securities Act of 1933, as amended; and
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Selling Expenses: shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than fees and expenses of
one counsel for all the Holders.
2. SHELF REGISTRATION
(a) Within 15 days after the Effective Date, the Company shall
file a "shelf" registration statement pursuant to Rule 415 under the Securities
Act (the "Shelf Registration") with respect to the Registrable Securities to be
issued under the Subscription Agreement. The Shelf Registrations shall be on
Form S-3 under the Securities Act or such other appropriate form selected by the
Company which allows resales of Registrable Securities. The Company shall,
subject to Section 2(h) hereof, use its reasonable best efforts to cause the
Shelf Registration to become effective as soon as practicable after the filing
thereof, and shall use its reasonable best efforts to keep the Shelf
Registration continuously effective from the date such Shelf Registration is
effective until the earlier to occur of (i) the second anniversary of the
Effective Date, or (ii) the date on which all Registrable Securities may be sold
pursuant to Rule 144(k), in order to permit the prospectus forming a part
thereof to be usable by Holders during such period. The Shelf Registration may
include securities of the Company other than Registrable Securities. If the
Shelf Registration is not declared effective by the Commission on or before the
90th day after the Effective Date, then the Company shall accrue to each
Investor, as liquidated damages, an amount equal to one percent (1%) of the
principal amount of the Debentures then held by such Investor for each thirty
(30) days thereafter until the Shelf Registration is declared effective by the
Commission. The Company shall pay the liquidated damages on the first day after
they accrue (i.e., the ninety-first (91st) day and the thirty-first (31st) day
thereafter).
(b) Subject to Section 2(i) hereof, the Company shall supplement
or amend the Shelf Registration, (i) as required by the registration form
utilized by the Company or by the instructions applicable to such registration
form or by the Securities Act or the rules and regulations promulgated
thereunder, (ii) to include in such Shelf Registration any additional securities
that become Registrable Securities by operation of the definition thereof, and
(iii) following the written request of an Initiating Holder pursuant to Section
2(c) below, to cover offers and sales of all or a part of the Registrable
Securities by means of an underwriting including the incorporation of any
information required pursuant to Section 2(e)(ix) below. The Company shall
furnish to the Holders of the Registrable Securities to which the Shelf
Registration relates copies of any such supplement or amendment sufficiently in
advance (but in no event less than five business days in advance) of its use
and/or filing with the Commission to allow the Holders a meaningful opportunity
to comment thereon.
(c) The Holders may, at their election and upon written notice by
the Initiating Holders to the Company, effect offers and sales under the Shelf
Registration by means of one or more underwritten offerings. If the Holders
intend to distribute the Registrable Securities by means of an underwriting,
they shall so advise the Company. An underwritten registration under this
Section 2(c) may include other Securities of the Company held by Persons who, by
virtue of agreements with the Company, are entitled to include their Securities
in any such registration
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("Other Stockholders"). If Other Stockholders request inclusion in any such
registration, the Holders shall offer to include the Securities of such Other
Stockholders in the underwriting and may condition such offer on their
acceptance of the further applicable provisions of this Section 2. The Holders
whose shares are to be included in such registration and the Company shall
(together with all Other Stockholders proposing to distribute their securities
through such underwriting) enter into underwriting and related agreements in
customary form with the representative of the underwriter or underwriters
selected for such underwriting by the Company and reasonably acceptable to the
Initiating Holders. Such underwriting agreement will contain such
representations and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions, including, without limitation, indemnities and
contribution to the effect and to the extent provided in Section 2(f) hereof and
the provision of opinions of counsel and accountants' letters to the effect and
to the extent provided in Section 2(e) hereof, and the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
the Holders. The Company shall cooperate fully with the Holders and the
underwriters in connection with any underwritten offering. Notwithstanding any
other provision of this Section 2(c), if the representative advises the Holders
in writing that marketing factors require a limitation on the number of shares
to be underwritten, the Securities of the Company held by Other Stockholders
shall be excluded from such registration to the extend so required by such
limitation. If, after the exclusion of such shares, still further reductions are
required, the number of shares included in the registration by each Holder shall
be reduced on a pro rata basis (based on the number of shares held by such
Holder), by such minimum number of shares as is necessary to comply with such
request. No Registrable Securities or any other securities excluded from the
underwriting by reason of the underwriter's marketing limitation shall be
included in such registration. If any Other Stockholder who has requested
inclusion in such registration as provided above disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the underwriter and the Initiating Holders. The securities so
withdrawn shall also be withdrawn from registration. If the underwriter has not
limited the number of Registrable Securities or other securities to be
underwritten, the Company and officers and directors of the Company may include
its or their securities for its or their own account in such registration if the
representative so agrees and if the number of Registrable Securities and other
securities which would otherwise have been included in such registration and
underwriting will not thereby be limited.
(d) Expenses of Registration. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
this Section 2 shall be borne by the Company, and all Selling Expenses shall be
borne by the Holders of the securities so registered pro rata on the basis of
the number of their shares so registered.
(e) Registration Procedures. In the case of each registration
effected by the Company pursuant to this Section 2, the Company will keep the
Holders, as applicable, advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the Company will:
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(i) furnish to each Holder, and to any underwriter before
filing with the Commission, copies of any registration statement
(including all exhibits) and any prospectus forming a part thereof and
any amendments and supplements thereto (including all documents
incorporated or deemed incorporated by reference therein prior to the
effectiveness of such registration statement and including each
preliminary prospectus, any summary prospectus or any term sheet (as such
term is used in Rule 434 under the Securities Act)) and any other
prospectus filed under Rule 424 under the Securities Act, which
documents, other than documents incorporated or deemed incorporated by
reference, will be subject to the review of the Holders and any such
underwriter for a period of at least five business days, and the Company
shall not file any such registration statement or such prospectus or any
amendment or supplement to such registration statement or prospectus to
which any Holder or any such underwriter shall reasonably object within
five business days after the receipt thereof; a Holder or such
underwriters, if any, shall be deemed to have reasonably objected to such
filing only if the registration statement, amendment, prospectus or
supplement, as applicable, as proposed to be filed, contains a material
misstatement or omission;
(ii) furnish to each Holder and to any underwriter, such
number of conformed copies of the applicable registration statement and
of each amendment and supplement thereto (in each case including all
exhibits) and such number of copies of the prospectus forming a part of
such registration statement (including each preliminary prospectus, any
summary prospectus or any term sheet (as such term is used in Rule 434
under the Securities Act)) and any other prospectus filed under Rule 424
under the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, including without limitation
documents incorporated or deemed to be incorporated by reference prior to
the effectiveness of such registration, as each of the Holders or any
such underwriter, from time to time may reasonably request;
(iii) to the extent practicable, promptly prior to the filing
of any document that is to be incorporated by reference into any
registration statement or prospectus forming a part thereof subsequent to
the effectiveness thereof, and in any event no later than the date such
document is filed with the Commission, provide copies of such document to
the Holders, if requested, and to any underwriter, and make
representatives of the Company available for discussion of such document
and other customary due diligence matters, and include in such document
prior to the filing thereof such information as any Holder or any such
underwriter reasonably may request;
(iv) make available at reasonable times for inspection by the
Holders, any underwriter participating in any disposition pursuant to
such registration and any attorney or accountant retained by the Holders
or any such underwriter, all financial and other records, pertinent
corporate documents and properties of the Company and cause the officers,
directors and employees of the Company to supply all information
reasonably requested by the Holders and any such underwriters, attorneys
or accountants in connection with such registration subsequent to the
filing of the applicable registration statement and prior to the
effectiveness of the applicable registration statement;
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(v) use its reasonable best efforts (x) to register or
qualify all Registrable Securities and other securities covered by such
registration under such other securities or blue sky laws of such States
of the United States of America where an exemption is not available and
as the sellers of Registrable Securities covered by such registration
shall reasonably request, (y) to keep such registration or qualification
in effect for so long as the applicable registration statement remains in
effect, and (z) to take any other action which may be reasonably
necessary or advisable to enable such sellers to consummate the
disposition in such jurisdictions of the securities to be sold by such
sellers, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in
any jurisdiction where it is not so qualified, or to subject itself to
taxation in any such jurisdiction, or to execute a general consent to
service of process in effecting such registration, qualification or
compliance, unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities Act or
applicable rules or regulations thereunder;
(vi) use its reasonable best efforts to cause all
Registrable Securities covered by such registration statement to be
registered with or approved by such other federal or state governmental
agencies or authorities as may be necessary in the opinion of counsel to
the Company and counsel to the Holders of Registrable Securities to
enable the Holders thereof to consummate the disposition of such
Registrable Securities;
(vii) subject to Section 2(h) hereof, promptly notify each
Holder of Registrable Securities covered by a registration statement (A)
upon discovery that, or upon the happening of any event as a result of
which, the prospectus forming a part of such registration statement, as
then in effect, includes an 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, in the light of the circumstances under
which they were made, not misleading, (B) of the issuance by the
Commission of any stop order suspending the effectiveness of such
registration statement or the initiation of proceedings for that purpose,
(C) of any request by the Commission for (1) amendments to such
registration statement or any document incorporated or deemed to be
incorporated by reference in any such registration statement, (2)
supplements to the prospectus forming a part of such registration
statement or (3) additional information, or (D) 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 of any
proceeding for such purpose, and at the request of any such Holder
promptly prepare and furnish to it a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(viii) use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of any such
registration, or the lifting of any suspension of the
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qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction;
(ix) if requested by the Initiating Holders, or any
underwriter, promptly incorporate in such registration statement or
prospectus, pursuant to a supplement or post effective amendment if
necessary, such information as the Initiating Holders and any underwriter
may reasonably request to have included therein, including, without
limitation, information relating to the "plan of distribution" of the
Registrable Securities, information with respect to the principal amount
or number of shares of Registrable Securities being sold to such
underwriter, the purchase price being paid therefor and any other terms
of the offering of the Registrable Securities to be sold in such offering
and make all required filings of any such prospectus supplement or
post-effective amendment as soon as practicable after the Company is
notified of the matters to be incorporated in such prospectus supplement
or post effective amendment;
(x) furnish to the Holders, addressed to them, an opinion
of counsel for the Company, dated the date of the closing under the
underwriting agreement, if any, or the date of effectiveness of the
registration statement if such registration is not an underwritten
offering, and use its reasonable best efforts to furnish to the Holders,
addressed to them, a "cold comfort" letter signed by the independent
certified public accountants who have certified the Company's financial
statements included in such registration, covering substantially the same
matters with respect to such registration (and the prospectus included
therein) and, in the case of such accountants' letter, with respect to
events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of
securities and such other matters as the Holders may reasonably request;
(xi) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least 12 months, but not
more than 18 months, beginning with the first full calendar month after
the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 promulgated thereunder;
(xii) provide promptly to the Holders upon request any
document filed by the Company with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange Act; and
(xiii) use its reasonable best efforts to cause all
Registrable Securities included in any registration pursuant hereto to be
listed on each securities exchange on which securities of the same class
are then listed, or, if not then listed on any securities exchange, to be
eligible for trading in any over-the-counter market or trading system in
which securities of the same class are then traded.
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(f) Indemnification.
(i) The Company will indemnify each of the Holders, as
applicable, each of its officers, directors, members and partners, and each
person controlling each of the Holders, with respect to each registration which
has been effected pursuant to this Section 2, and each underwriter, if any, and
each person who controls any underwriter, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or the Exchange Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, qualification or
compliance, and will reimburse each of the Holders, each of its officers,
directors, members and partners, and each person controlling each of the
Holders, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating and defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission based upon written
information furnished to the Company by the Holders or underwriter and stated to
be specifically for use therein.
(ii) Each of the Holders will, if Registrable Securities
held by it are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers and each underwriter, if any, of the Company's
securities covered by such a registration statement and each person who controls
the Company or such underwriter, each Other Stockholder and each of their
officers, directors, members and partners, and each person controlling such
Other Stockholder against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document made by such Holder,
or any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements by such Holder therein
not misleading, and will reimburse the Company and such Other Stockholders,
directors, officers, partners, members, persons, underwriters or control persons
for any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by such Holder and stated to be specifically for use therein; provided,
however, that the obligations of each of the Holders hereunder and under clause
(vi) below shall be limited to an amount equal to the net proceeds to such
Holder of securities sold as contemplated herein.
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(iii) Each party entitled to indemnification under this
Section 2(f) (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 the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld) and the Indemnified Party
may participate in such defense at such party's expense (unless the Indemnified
Party shall have reasonably concluded that there may be a conflict of interest
between the Indemnifying Party and the Indemnified Party in such action, in
which case the fees and expenses of one such counsel for all Indemnified Parties
shall be at the expense of the Indemnifying Party), 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 2 unless
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 (which consent shall not be unreasonably withheld or
delayed), 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.
(iv) If the indemnification provided for in this Section
2(f) is held by a court of competent jurisdiction 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 (or alleged 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.
(v) 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.
(vi) The foregoing indemnity agreement of the Company and
Holders 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
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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 or contribution agreement shall
not inure to the benefit of any underwriter or Holder (but only if such Holder
was required to deliver such Final Prospectus) if a copy of the Final Prospectus
was furnished to the underwriter and was not furnished to the person asserting
the loss, liability, claim or damage at or prior to the time such action is
required by the Securities Act.
(g) Information by the Holders. Each of the Holders holding
securities included in any registration shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Section 2.
(h) Holdback Agreement; Postponement. Notwithstanding the
provisions of Sections 3(a), (b) and (c), if the Board of Directors of the
Company determines in good faith that it is in the best interests of the Company
(A) not to disclose the existence of facts surrounding any proposed or pending
acquisition, disposition, strategic alliance or financing transaction involving
the Company or (B) to avoid a material mistatement or omission in the Shelf
Registration, to suspend the registration rights set forth herein, the Company
may, by notice to the Holders in accordance with Section 5(a), suspend the
rights of the Holders to make sales pursuant to the Shelf Registration; provided
that (x) such periods of suspension may not exceed sixty (60) days in the
aggregate during any period of 12 consecutive months and (y) the Company may not
impose such a suspension or a postponement following the printing and
distribution of a preliminary prospectus in any underwritten public offering of
Registrable Securities pursuant to Section 2(c) (except such suspension, not to
exceed ten days, which results from an event that is not within the reasonable
control of the Company). The Company shall use reasonable commerical efforts to
minimize the period of any suspension of sales under this Section 2(h).
(i) Assignment. The registration rights set forth in Section 2
hereof may be assigned, in whole or in part, to any transferee of Registrable
Securities (who shall be considered thereafter to be a Holder (provided that any
transferee who is not an affiliate of Investor shall be a Holder only with
respect to such Registrable Securities so acquired and any stock of the Company
issued as a dividend or other distribution with respect to, or in exchange for
or in replacement of, such Registrable Securities) and shall be bound by all
obligations and limitations of this Agreement).
3. RULE 144 REPORTING
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:
(i) make and keep public information available (as those terms are
understood and defined in Rule 144) at all times;
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(ii) use its reasonable 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; and
(iii) so long as there are outstanding any Registrable Securities,
furnish to each Holder, upon request, a written statement by the
Company as to its compliance with the reporting requirements of
Rule 144 and of the Securities Act and the Exchange Act, a copy of
the most recent annual or quarterly report of the Company, and
such other reports and documents so filed as such Holder may
reasonably request in availing itself of any rule or regulation of
the Commission allowing such Holder to sell any such securities
without registration.
4. INTERPRETATION OF THIS AGREEMENT
(a) Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
(c) Section Headings. The headings of the sections and subsections
of this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
(d) Arbitration. All disputes arising under this Agreement (other
than claims in equity) shall be resolved by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association.
Arbitration shall be by a single arbitrator experienced in the matters at issue
and selected by the Company and the Investor in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The arbitration shall
be held in such place in New York, New York, as may be specified by the
arbitrator (or any place agreed to by the Company, the Investor and the
arbitrator). The decision of the arbitrator shall be final and binding as to any
matters submitted under this Agreement; provided, however, if necessary, such
decision and satisfaction procedure may be enforced by either the Company or the
Investor in any court of record having jurisdiction over the subject matter or
over any of the parties to this Agreement. All costs and expenses incurred in
connection with any such arbitration proceeding (including reasonable attorneys
fees) shall be borne by the party against which the decision is rendered, or, if
no decision is rendered, such costs and expenses shall be home equally by the
Company as one party and the Investor as the other party. If the arbitrator's
decision is a compromise, the determination of which party or parties bears the
costs and expenses incurred in connection with any such arbitration proceeding
shall be made by the arbitrator on the basis of the arbitrator's assessment of
the relative merits of the parties' positions.
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5. MISCELLANEOUS
(a) Notices.
(i) All communications under this Agreement shall be in
writing and shall be delivered by facsimile or by hand or mailed by overnight
courier or by registered or certified mail, postage prepaid: .
(A) if to the Company, to CytRx Corporation, 000
Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx Xxxx/Xxxxxxx, Xxxxxxxx, Xxxxxxx 00000 (770)
368-9500, Attention: Chief Executive Officer, or at such other address as it may
have furnished in writing to the Investors;
(B) if to the Investors, at the addresses listed on
Schedule I hereto, or at such other addresses as may have been furnished the
Company in writing.
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand, on the date of such delivery; if mailed by courier, on the
first business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of such
mailing.
(b) Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the Investor
by any photographic, photostatic, microfilm, microcard, miniature photographic
or other similar process and the Investors may destroy any original document so
reproduced. The parties hereto agree and stipulate that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Investors in the regular course
of business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
(c) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties.
(d) Entire Agreement; Amendment and Waiver. This Agreement
constitutes the entire understanding of the parties hereto and supersedes all
prior understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company and the Holders of a majority of the then
outstanding Registrable Securities.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
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(f) No Inconsistent Agreements. The Company will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with the rights granted to the Holders of Registrable Securities in this
Agreement.
(g) Remedies. Each Holder of Registrable Securities, in addition
to being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended and understood that all of the rights and
privileges of each of the Holders shall be enforceable to the fullest extent
permitted by law.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.
CYTRX CORPORATION
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
INVESTORS:
GUNDYCO, in trust for R.R.S.P. 000-00000-00
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EXCALIBUR LIMITED PARTNERSHIP
By:
-----------------------------------------
Excalibur Capital Management Inc.
By:
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------------------
Title: President
-----------------------------------
PINE STREET ASSET MANAGEMENT
By:
-----------------------------------------
Its:
-------------------------------------
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxx
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