1
EXHIBIT 10.1
--------------------------------------------------------------------------------
HYBRIDON, INC.
AND
FORUM CAPITAL MARKETS L.P.
-------------
REGISTRATION RIGHTS AGREEMENT
Dated as of March 26, 1997
--------------------------------------------------------------------------------
2
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS AGREEMENT is made as of March 26, 1997, by and between Hybridon, Inc.,
a Delaware corporation (the "Company"), and Forum Capital Markets L.P., (the
"Initial Purchaser"). The Company proposes to issue and sell to the Initial
Purchaser, upon the terms set forth in a purchase agreement dated concurrently
herewith (the "Purchase Agreement"), up to $60,000,000 aggregate principal
amount of its 9% Convertible Subordinated Notes due 2004 (the "Notes"). The
Notes are convertible into Common Stock (as defined herein) as provided in the
Notes and the Indenture (as defined herein). As an inducement to the Initial
Purchaser to enter into the Purchase Agreement and in satisfaction of a
condition to the Initial Purchaser's obligations thereunder, the Company agrees
with the Initial Purchaser, for the benefit of the Initial Purchaser and the
other Holders (as defined herein), as follows:
1. Definitions.
-----------
As used in this Agreement, the following capitalized terms shall have the
following meanings:
"ACT" means the Securities Act of 1933, as amended from time to time.
"CLOSING DATE" has the meaning set forth in the Purchase Agreement.
"COMMON STOCK" means the Common Stock, par value $.001 per share, of the
Company, or any successor class thereto, issuable upon conversion of the Notes.
"COMMISSION" means the Securities and Exchange Commission.
"DAMAGES PAYMENT DATE" means April 1 and October 1 in each year.
"EFFECTIVENESS PERIOD" has the meaning set forth in Section 2 hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time.
"HOLDERS" means Persons owning Transfer Restricted Securities.
"INDENTURE" means the Indenture, to be dated the date hereof, between the
Company and State Street Bank and Trust Company or other comparable entity
selected by the Company, as trustee (the "TRUSTEE"), pursuant to which the Notes
are to be issued, as such Indenture is amended or supplemented from time to time
in accordance with the terms thereof.
"LIQUIDATED DAMAGES" has the meaning set forth in Section 4 hereof.
3
"OPTION CLOSING DATE" has the meaning set forth in the Purchase Agreement.
"PERSON" means an individual, partnership, corporation, limited liability
company, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"PROSPECTUS" means the prospectus included in the Shelf Registration
Statement, as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
"RECORD HOLDER" means with respect to any Damages Payment Date relating to
the Notes, each Person who is a holder of Notes on the record date with respect
to the interest payment on the Notes due on such date and with respect to any
Damages Payment Date relating to the Common Stock, each Person who is a holder
of Common Stock on March 15 with respect to an April 1 Damages Payment Date and
on September 15 with respect to an October 1 Damages Payment Date.
"REGISTRATION DEFAULT" has the meaning set forth in Section 4 hereof.
"SHELF REGISTRATION STATEMENT" has the meaning set forth in Section 2
hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
"TRANSFER RESTRICTED SECURITIES" means each Note and, if such Note has been
converted, each share of Common Stock issued in connection with such conversion,
until the earlier of (a) the date on which such Note or share of Common Stock,
as applicable, has been effectively registered under the Act and disposed of
pursuant to and in accordance with an effective Shelf Registration Statement,
(b) the date on which such Note or share of Common Stock, as applicable, is
distributed to the public pursuant to Rule 144 or any other applicable exemption
under the Act without additional restriction upon public resale or (c) at such
time as such Note or share of Common Stock, as applicable, may be sold by a
Holder under Rule 144(k).
"UNDERWRITTEN OFFERING" means a registration in which securities of the
Company are sold to an underwriter for re-offering to the public.
2. SHELF REGISTRATION. The Company shall use its reasonable best efforts to
file a registration statement with the Commission within 60 days after the
Closing Date relating to the offer and sale of the Transfer Restricted
Securities by Holders from time to time pursuant to Rule 415 under the Act and
in accordance with the methods of distribution set forth therein, which
registration statement may be substituted for by one or more subsequent
registration statements each relating to the offer and sale of the Transfer
Restricted Securities by Holders from time to time (as in effect from time to
time, the "Shelf Registration Statement"), and the Company shall use its
reasonable best efforts to cause such Shelf Registration Statement to be
declared effective by the Commission within 120 days after the
2
4
Closing Date, provided, however, that the Company may delay such filing or
effectiveness under the circumstances and during the periods described in
Section 3 hereof. In addition, the Company shall use its reasonable best efforts
to keep the Shelf Registration Statement continuously effective, supplemented
and amended for a period (the "Effectiveness Period") of not less than two years
following the later of the Closing Date or any Option Closing Date or such
shorter period that will terminate when all the Notes and shares of Common Stock
covered by the Shelf Registration Statement cease to be Transfer Restricted
Securities.
3. Delay Periods; Suspension of Sales.
----------------------------------
(a) If at any time prior to the expiration of the Effectiveness
Period, counsel to the Company (which counsel shall be experienced in securities
laws matters) has determined in good faith that it is reasonable to conclude
that the filing of the Shelf Registration Statement or the compliance by the
Company with its disclosure obligations in connection with the Shelf
Registration Statement may require the disclosure of information which the Board
of Directors of the Company has identified as material and which the Board of
Directors has determined that the Company has a bona fide business purpose for
preserving as confidential, then the Company may delay the filing or the
effectiveness of the Shelf Registration Statement (if not then filed or
effective, as applicable) and shall not be required to maintain the
effectiveness thereof or amend or supplement the Shelf Registration Statement
for a period (an "Information Delay Period") expiring three business days after
the earlier to occur of (A) the date on which such material information is
disclosed to the public or ceases to be material or the Company is able to so
comply with its disclosure obligations and Commission requirements or (B) 45
days after the Company notifies the Holders of such good faith determination.
There shall not be more than four Information Delay Periods during the
Effectiveness Period, and there shall not be two Information Delay Periods
during any contiguous 135 day period.
(b) If at any time prior to the expiration of the Effectiveness
Period, the Company is advised by a nationally recognized investment banking
firm selected by the Company that, in such firm's written reasonable opinion
addressed to the Company (a copy of which shall be delivered to each Holder of
Transfer Restricted Securities registered under the Shelf Registration
Statement), sales of Common Stock pursuant to the Shelf Registration Statement
at such time would materially adversely affect any immediately planned
underwritten public equity financing by the Company of at least $5 million, the
Company shall not be required to maintain the effectiveness of the Shelf
Registration Statement or amend or supplement the Shelf Registration Statement
for a period (a "Transaction Delay Period") commencing on the date of pricing of
such equity financing and expiring three business days after the earliest to
occur of (i) the abandonment of such financing or (ii) 90 days after the
completion of such financing. There shall not be more than two Transaction Delay
Periods during the Effectiveness Period.
(c) A Transaction Delay Period and an Information Delay Period are
hereinafter collectively referred to as "Delay Periods" or a "Delay Period." The
Company will give prompt written notice, in the manner prescribed by Section
10(b) hereof, to each Holder of each Delay Period. Such notice shall be given
(i) in the case of a Transaction Delay Period, at least 20 days in advance of
the commencement of such Delay Period and
3
5
(ii) in the case of an Information Delay Period, as soon as practicable after
the Board of Directors makes the determination referenced in Section 3(a). Such
notice shall state to the extent, if any, as is practicable, an estimate of the
duration of such Delay Period. Each Holder, by his acceptance of any Transfer
Restricted Securities, agrees that (i) upon receipt of such notice of an
Information Delay Period it will forthwith discontinue disposition of Transfer
Restricted Securities pursuant to the Shelf Registration Statement, (ii) upon
receipt of such notice of a Transaction Delay Period it will forthwith
discontinue disposition of the Common Stock pursuant to the Shelf Registration
Statement and (iii) in either such case, will not deliver any prospectus forming
a part of the Shelf Registration Statement in connection with any sale of
Transfer Restricted Securities or Common Stock, as applicable until the
expiration of such Delay Period.
4. LIQUIDATED DAMAGES. Except as may be permitted by Section 3, if (i)
the Shelf Registration Statement is not filed with the Commission within 60 days
after the Closing Date, (ii) the Shelf Registration Statement has not been
declared effective by the Commission within 120 days after the Closing Date (the
"Effectiveness Target Date"), or (iii) at any time prior to the second
anniversary of the later of the Closing Date or any Option Closing Date, the
Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective (other than as a result of the effectiveness of
a successor registration statement) and such effectiveness is not restored
within 75 days thereafter (each such event referred to in clauses (i) through
(iii), a "Registration Default"), the Company will pay liquidated damages
("Liquidated Damages") to each Holder who has complied with its obligations
under this Agreement. During the first 90-day period immediately following the
occurrence of such Registration Default, the amount of such Liquidated Damages
shall equal $.05 per week per $1,000 principal amount of Notes and, if
applicable, $.0005 per week per share of Common Stock constituting Transfer
Restricted Securities registered under the Shelf Registration Statement (subject
to adjustment in the event of stock splits, stock consolidations, stock
dividends and the like). Upon each subsequent 90-day period following the
occurrence of such Registration Default, the amount of the Liquidated Damages
shall increase by an additional $.05 per week per $1,000 principal amount of
Notes and $.0005 per week per share of Common Stock constituting Transfer
Restricted Securities registered under the Shelf Registration Statement (subject
to adjustment as set forth above); provided, however, the maximum amount of the
Liquidated Damages shall be $.20 per week per $1,000 principal amount of Notes
and $.002 per week per share of Common Stock constituting Transfer Restricted
Securities registered under the Shelf Registration Statement (subject to
adjustment as set forth above). All accrued Liquidated Damages shall be paid by
the Company to Record Holders entitled thereto on the next succeeding Damages
Payment Date by wire transfer of immediately available funds or by federal funds
check. Following the cure of all Registration Defaults, the accrual of
Liquidated Damages will cease, but any Liquidated Damages accrued through the
date of cure shall be paid to Record Holders on the next succeeding Damages
Payment Date. If the Registration Defaults described in either of clauses (i) or
(ii) above arose solely because the applicable Holder or Holders failed to
provide the Company with certain information within 20 business days after
request therefor pursuant to Section 5(m), Liquidated Damages in respect thereof
will not begin to accrue until five business days after such information has
been provided to the Company.
4
6
All of the Company's obligations set forth in the preceding
paragraph which are outstanding with respect to any Transfer Restricted Security
at the time such security ceases to be a Transfer Restricted Security shall
survive until such time as all such obligations with respect to such security
shall have been satisfied in full.
5. Registration Procedures.
-----------------------
In connection with the Shelf Registration Statement and any
Prospectus required by this Agreement to permit the sale or resale of Transfer
Restricted Securities, the following provisions shall apply:
(a) The Company shall furnish to each Holder, promptly after filing
thereof with the Commission, a copy of the Shelf Registration Statement and each
amendment thereto or each amendment or supplement to the Prospectus included
therein.
(b) The Company shall take such action as may be reasonably necessary
so that (i) the Shelf Registration Statement and any amendment thereto and any
Prospectus forming a part thereof and any supplement or amendment thereto
complies in all material respects with the Act and the rules and regulations
thereunder, (ii) the Shelf Registration and any amendment thereto (in either
case, other than with respect to written information furnished to the Company by
or on behalf of any Holder specifically for inclusion therein) does not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make any statement therein not misleading
and (iii) the Prospectus and any supplement thereto (in either case, other than
with respect to such information from Holders), does not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(c) The Company shall promptly advise the Holders of Transfer
Restricted Securities registered under the Shelf Registration Statement (which
advice pursuant to clauses (ii) - (iv) shall be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have been made)
and, if requested by such Persons, shall confirm such advice in writing:
(i) when the Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has
become effective;
(ii) of any request by the Commission for amendments to the Shelf
Registration Statement or amendments or supplements to the Prospectus
or for additional information relating thereto;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or of
the suspension by any state securities commission of the qualification
of the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the
preceding purposes; and
5
7
(iv) of the happening of any event that requires the making of
any changes in the Shelf Registration Statement or the Prospectus so
that, as of such date, the Shelf Registration Statement and the
Prospectus do not contain an untrue statement of a material fact and
do not omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made)
not misleading.
(d) If at any time the Commission shall issue any stop order
suspending the effectiveness of the Shelf Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Company shall
use its reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time.
(e) The Company shall furnish to each Holder of Transfer Restricted
Securities included under the Shelf Registration Statement, without charge, at
least one copy of the Shelf Registration Statement and each post-effective
amendment thereto, including all financial statements and schedules, documents
incorporated by reference therein and, if the Holder so requests in writing, all
exhibits (including exhibits incorporated therein by reference).
(f) The Company shall, during the Effectiveness Period, deliver to
each Holder of Transfer Restricted Securities included under the Shelf
Registration Statement, without charge, such reasonable number of copies of the
Prospectus (including each preliminary prospectus) included in the Shelf
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request to facilitate the public sale or other disposition of the
Transfer Restricted Securities by the selling Holder.
(g) Prior to any public offering pursuant to the Shelf Registration
Statement, the Company shall use its reasonable best efforts to register or
qualify or cooperate with the Holders of Transfer Restricted Securities
registered thereunder, the underwriter(s), if any, and their respective counsel
in connection with the registration and qualification of such Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as such Holders or underwriters reasonably request in writing and
do any and all other acts or things reasonably necessary or advisable to enable
the offer and sale in such jurisdictions of such Transfer Restricted Securities;
provided, however, that the Company will not be required to qualify generally to
do business in any jurisdiction where it is not then so qualified or to take any
action that would subject it to general service of process or to taxation in any
jurisdiction where it is not then so subject.
(h) The Company shall cooperate with the Holders and the
underwriter(s), if any, to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to be sold under the
Shelf Registration Statement, free of any restrictive legends and in such
denominations and registered in such names as the Holders or the underwriter(s),
if any, may reasonably request in connection with the sales of Transfer
Restricted Securities pursuant to the Shelf Registration Statement.
6
8
(i) Upon the occurrence of any event contemplated by Section 5(c)(ii)
- (iv), and subject to the provisions of Section 3, the Company shall file (and
use its reasonable best efforts to have declared effective as soon as possible)
a post-effective amendment to the Shelf Registration Statement or an amendment
or supplement to the Prospectus or file any other required document so that, as
thereafter delivered to the purchasers of Transfer Restricted Securities
registered under the Shelf Registration Statement, the Prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in light of the circumstances
under which they were made not misleading. Each Holder of Transfer Restricted
Securities registered under the Shelf Registration Statement agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of any
notice from the Company of the existence of any fact of the kind described in
Section 5(c)(ii) - (iv) hereof, such Holder will forthwith discontinue
disposition of Transfer Restricted Securities pursuant to the Shelf Registration
Statement until such Holder receives copies of the supplemented or amended
Prospectus contemplated by this Section 5(i), or until such Holder is advised in
writing by the Company that the use of the Prospectus may be resumed, and such
Holder has received copies of any additional or supplemental filings which are
incorporated by reference in the Prospectus. If so directed by the Company, each
Holder will deliver to the Company (at the Company's expense) all copies, other
than permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities current at the time of receipt of
such notice.
(j) The Company shall provide CUSIP numbers for all Transfer
Restricted Securities registered under the Shelf Registration Statement, in the
event of and at the time of any distribution thereof to Holders, not later than
the effective date of the Shelf Registration Statement and provide the Trustee
and the transfer agent for the Common Stock with printed certificates for such
Transfer Restricted Securities which are in a form eligible for deposit with The
Depository Trust Company.
(k) The Company shall use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make generally
available to its security holders or otherwise provide in accordance with
Section 11(a) of the Act, as soon as practicable after the effective date of the
Shelf Registration Statement an earnings statement satisfying the provisions of
Section 11(a) of the Act.
(l) The Company shall cause the Indenture to be qualified under the
TIA in a timely manner not later than the effective date of the Shelf
Registration Statement, and, in connection therewith, cooperate with the Trustee
and the Holders of Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the terms of
the TIA.
(m) The Company may require each Holder of Transfer Restricted
Securities to be registered under the Shelf Registration Statement to furnish to
the Company such information regarding such Holder and the distribution of such
Holder's securities thereunder as the Company may from time to time reasonably
require for inclusion in the Shelf Registration Statement and the Company may
exclude from such registration the
7
9
Transfer Restricted Securities of any Holder that fails to furnish such
information within a reasonable time after receiving such request.
(n) The Company shall, if requested by the Holders of Transfer
Restricted Securities being sold in an Underwritten Offering or the
underwriter(s) thereof, promptly incorporate in the Shelf Registration Statement
or Prospectus, pursuant to a supplement or post-effective amendment, if
necessary, such information relating to the plan of distribution of the Transfer
Restricted Securities, information with respect to the principal amount of
Transfer Restricted Securities being sold to such underwriter(s), the purchase
price being paid therefor and with respect to any other terms of the offering of
the Transfer Restricted Securities to be sold in such offering as such
underwriters and Holders reasonably agree should be included therein and to
which the Company does not reasonably object; and shall make all required
filings of 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. Notwithstanding the
foregoing, any Delay Period resulting from such supplement or amendment shall
not constitute a Delay Period under Section 3, and the Company shall not be
liable under Section 4, in connection with such delay or amendment.
(o) The Company shall enter into such customary agreements (including
an underwriting agreement in customary form, if applicable) and take all such
other reasonable and appropriate actions in order to expedite or facilitate the
disposition in an Underwritten Offering of the Transfer Restricted Securities
pursuant to the Shelf Registration Statement, and in connection therewith, the
Company shall (1) make such representations and warranties to the underwriter(s)
in form, substance and scope as are customarily made by issuers to underwriters
in comparable underwritten offerings; (2) obtain opinions of counsel to the
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to such underwriters) addressed to
each such underwriter covering such matters as are customarily covered in
opinions requested in underwritten offerings; (3) if and to the extent permitted
by Statement of Auditing Standards No. 72, obtain comfort letters and updates
thereof from the Company's independent certified public accountants addressed to
the underwriters requesting the same, such letters to be in customary form and
covering matters of the type customarily covered in comfort letters in
connection with comparable underwritten offerings; (4) set forth in full or
incorporate by reference in the underwriting agreement the indemnification
provisions and procedures of Section 6 hereof with respect to all parties to be
indemnified pursuant to said Section; and (5) deliver such documents and
certificates as may be reasonably requested by such underwriters to evidence
compliance with Section 5(i) and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company pursuant
to this Section 5(o). The foregoing actions set forth in clauses (1), (2), (3)
and (5) of this Section 5(o) shall be performed at each closing under any
underwriting or similar agreement as and to the extent required thereunder.
(p) The Company shall make available at reasonable times for
inspection by the Holders of the Transfer Restricted Securities, any underwriter
participating in any disposition pursuant to the Shelf Registration Statement,
and any attorney or accountant retained by any such Holders or underwriters, all
financial and other records, pertinent
8
10
corporate documents and properties of the Company and its subsidiaries; and
cause the Company's officers, directors and employees to supply all information
reasonably requested by any such Holder, underwriter, attorney or accountant in
connection with the Shelf Registration Statement subsequent to the filing
thereof as is customary for similar due diligence examinations; provided,
however, that any information that is designated in writing by the Company, in
good faith, as confidential at the time of delivery of such information shall be
kept confidential by such Holders or any such underwriter, attorney or
accountant, unless (i) such disclosure is required to be made in connection with
a court proceeding or required by law (provided that the disclosing party
provides prior written notice to the Company and cooperates with the Company, at
the Company's expense, to take reasonable and lawful actions to avoid and/or
minimize the extent of such disclosure) or (ii) such information becomes
available to the public other than through a wrongful act by such Person; and
provided, further that the foregoing inspection and information gathering shall,
to the greatest extent possible, be coordinated on behalf of the Holders and the
other parties entitled thereto by one counsel designated by and on behalf of
such Holders and other parties.
(q) The Company shall use its reasonable best efforts, subject to any
applicable rules thereto, to cause all Common Stock included among the Transfer
Restricted Securities to be listed on each securities exchange on which the
Common Stock is listed and, if requested by the Holders of a majority of in
aggregate principal amount of Notes, and if the Common Stock is then listed on
the American Stock Exchange or the New York Stock Exchange, to also list the
Notes registered under the Shelf Registration Statement on such exchange.
6. Registration Expenses.
---------------------
(a) Except as otherwise provided in Section 7, the Company shall bear
all expenses incurred in connection with the performance of or compliance with
its obligations under Sections 2, 4 and 5 hereof, including without limitation
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, messenger and delivery expenses
and fees and disbursements of counsel for the Company and all independent
certified public accountants, and other persons retained by the Company (all
such expenses being herein called "Registration Expenses"). Registration
Expenses shall also include the Company's internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expense of any annual audit or quarterly
review, the expense of any liability insurance and the expenses and fees for
listing the securities to be registered on each securities exchange on which
similar securities issued by the Company are then listed or on the Nasdaq Stock
Market. The Company will reimburse the Holders for the reasonable fees and
disbursements (not to exceed $15,000 in the aggregate) of one firm of attorneys
chosen by the Holders of a majority in aggregate principal amount of the Notes
to be sold pursuant to the Shelf Registration Statement to act as counsel
therefor in connection therewith.
(b) Each Holder will pay any discounts and commissions incurred upon
the sale of securities by it under the Shelf Registration Statement.
9
11
7. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each Holder (for
purposes of this Section 7, "Holder" shall include the officers, directors,
partners, employees and agents, and each Person, if any, who controls any Holder
("controlling person") within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, from and against any and all losses, claims,
damages, expenses or liabilities, joint or several (and actions, proceedings,
suits and litigation in respect thereof), whatsoever, as the same are incurred,
to which such Holder or any such controlling Person may become subject, under
the Securities Act, the Exchange Act or any other statute or at common law or
otherwise insofar as such losses, claims, damages, expenses or liabilities arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Shelf Registration Statement, or any preliminary
Prospectus or Prospectus (as from time to time amended and supplemented) or
arise out of or are based upon the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein (with respect to any preliminary Prospectus or Prospectus, in the light
of the circumstances under which they were made), not misleading; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, expense or liability arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, or any preliminary
Prospectus or Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any such Holder specifically for inclusion therein and provided,
further, that the Company shall not be liable to any such Holder under the
indemnity agreement in this subsection (a) (i) with respect to any preliminary
Prospectus or Prospectus (if such Prospectus has then been amended or
supplemented) to the extent that any such loss, liability, claim, damage or
expense of such Holder arises out of a sale of Transfer Restricted Securities by
such Holder to a Person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus (or of the
Prospectus as then amended or supplemented) if the Company has previously
furnished copies thereof to such Holder a reasonable time in advance and the
loss, liability, claim, damage or expense of such Holder results from an untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in the preliminary Prospectus (or the Prospectus) which
was corrected in the Prospectus (or the Prospectus as amended or supplemented)
or (ii) to the extent that any such loss, claim, damage, expense or liability
arises out of or is based upon any action or failure to act by such Holder that
is found in a final judicial determination (or a settlement tantamount thereto)
to constitute bad faith, willful misconduct or gross negligence on the part of
such Holder. The indemnity agreement in this subsection (a) shall be in addition
to any liability which the Company may have at common law or otherwise.
The Company also agrees to indemnify or contribute to losses of, as
provided in Section 7(d), any underwriters of Transfer Restricted Securities
registered under the Shelf Registration Statement, their officers and directors
and each Person, if any, who controls any such underwriter (within the meaning
of the Act) on substantially the same basis as that of the indemnification of
the Holders provided in this Section 7(a) and shall, if requested by any Holder,
enter into an underwriting agreement reflecting such agreement, as provided in
Section 5(o) hereof.
10
12
(b) Each Holder agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers and each other Person, if any, who
controls the Company within the meaning of the Securities Act, to the same
extent as the foregoing indemnity from the Company to the Holders, but only with
respect to statements or omissions, if any, made in conformity with information
relating to such Holder furnished in writing by such Holder specifically for use
in the Shelf Registration Statement in the Registration Statement, or any
preliminary Prospectus or the Prospectus or any amendment thereof or supplement
thereto; provided, however, that the obligation to indemnify will be individual
to each Holder and will be limited to the amount of net proceeds received by
such Holder from the sale of Transfer Restricted Securities pursuant to the
Shelf Registration Statement.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, suit or proceeding, such
indemnified party shall, if a claim in respect thereof is to be made against one
or more indemnifying parties under this Section 7, notify each party against
whom indemnification is to be sought in writing of the commencement thereof (but
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under Sections 7(a) or (b) unless and to the extent
that it has been prejudiced in a material respect by such failure or from the
forfeiture of substantial rights and defenses). In case any such action, suit or
proceeding is brought against any indemnified party, and it notifies an
indemnifying party or parties of the commencement thereof, the indemnifying
party or parties will be entitled to participate therein, and to the extent it
may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party,
which may be the same counsel as counsel to the indemnifying party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by the indemnifying parties in connection with the defense of such
action at the expense of the indemnifying party, (ii) the indemnifying parties
shall not have employed counsel reasonably satisfactory to such indemnified
party to take charge of the defense of such action within a reasonable time
after notice of commencement of the action or (iii) such indemnified party or
parties shall have reasonably concluded, after consultation with counsel to such
indemnified party or parties, that a conflict of interest exists which makes
representation by counsel chosen by the indemnifying party not advisable (in
which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses of one additional counsel shall be borne by
the indemnifying parties. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
Anything in this Section 7 to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action effected
without its written consent.
(d) In order to provide for just and equitable contribution in any
case in which (i) an indemnified party makes claim for indemnification pursuant
to this Section 7,
11
13
but it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that the express provisions of
this Section 7 provide for indemnification in such case, or (ii) contribution
under the Securities Act may be required, then each indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid as a
result of such losses, claims, damages, expenses or liabilities (or actions,
suits, proceedings or litigation in respect thereof) in such proportion as is
appropriate to reflect the relative fault of each of the contributing parties,
on the one hand, and the party to be indemnified, on the other hand, in
connection with the statements or omissions that resulted in such losses,
claims, damages, expenses or liabilities, as well as any other relevant
equitable considerations. Relative fault 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 Company or by a Holder, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, expenses or liabilities (or
actions, suits, proceedings or litigation in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating,
preparing or defending any such action, claim, suit, proceeding or litigation.
Notwithstanding the provisions of this subsection (d), no Holder shall be
required to contribute any amount in excess of the amount by which the total
price at which the Transfer Restricted Securities sold by such indemnifying
party and distributed to the public were offered to the public exceeds the
amount of any damages that such indemnifying party has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 12(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7, each Person, if any, who
controls the Company within the meaning of the Securities Act, each executive
officer of the Company and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to this subsection
(d). Any party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit, proceeding or litigation against such party
in respect to which a claim for contribution may be made against another party
or parties under this subsection (d), notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have hereunder or otherwise than under this
subsection (d), or to the extent that such party or parties were not adversely
affected by such omission. The contribution agreement set forth above shall be
in addition to any liabilities which any indemnifying party may have at common
law or otherwise.
8. RULES 144 AND 144A. The Company shall use commercially reasonable
efforts to file the reports required to be filed by it under the Act and the
Exchange Act in a timely manner and, if at any time the Company is not required
to file such reports, it will, upon the written request of any Holder of
Transfer Restricted Securities, make publicly available other information so
long as necessary to permit sales of such Holder's securities pursuant to Rules
12
14
144 and 144A. The Company covenants that it will take such further action as any
Holder of Transfer Restricted Securities may reasonably request, all to the
extent required from time to time, to enable such Holder to sell securities
without registration under the Act within the limitation of the exemptions
provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)).
9. UNDERWRITTEN REGISTRATIONS. If any of the Transfer Restricted Securities
included under the Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders of
a majority of the shares of Common Stock included among such Transfer Restricted
Securities (calculated as if all of the then outstanding Notes were converted
into Common Stock at the time of such selection), provided, however, that such
managing underwriters shall be reasonably satisfactory to the Company and the
Company shall not be obligated to arrange for more than one underwritten
offering during the Effectiveness Period.
No Person may participate in any underwritten registration hereunder unless
such Person (i) agrees to sell such Person's Transfer Restricted Securities on
the basis reasonably provided in any underwriting arrangements approved by the
Persons entitled hereunder to approve such arrangements, (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents reasonably required under the
terms of such underwriting arrangements and (iii) at least 20% of the
outstanding Transfer Restricted Securities are included in such underwritten
offering. The Holders participating in any underwritten offering shall be
responsible for any expenses customarily borne by selling securityholders,
including underwriting discounts and commissions and fees and expenses of
counsel to the selling securityholders.
10. Miscellaneous.
-------------
(a) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the Company has obtained the
written consent of Holders of a majority of the Common Stock issued or issuable
upon conversion of the Notes (calculated as if all of the then outstanding Notes
were converted into Common Stock at the time of such consent). Notwithstanding
the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of the Holders of
Transfer Restricted Securities being sold pursuant to the Shelf Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by Holders of a majority of the shares of Common Stock
included among such Transfer Restricted Securities.
(b) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
13
15
(1) if to a Holder, at the address of such Holder maintained by
the Registrar under the Indenture;
(2) if to the Initial Purchaser, at the address set forth in the
Purchase Agreement;
(3) if to the Company, at its address set forth in the Purchase
Agreement;
or to such other addresses as the recipient party has specified to the sending
party by prior written notice to the sending party.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; when answered back, if faxed; and when receipt is
acknowledged by the recipient's telecopier machine, if telecopied.
(c) REMEDIES. In the event of a breach by the Company or by a Holder
of any of their respective obligations under this Agreement, each Holder or the
Company, as the case may be, 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 and each
Holder agree that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(d) SEVERABILITY. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(e) NO INCONSISTENT AGREEMENTS. The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent with or
violates the rights granted to the Holders in this Agreement.
(f) SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of their respective heirs, executors, administrators, successors,
legal representatives and assigns.
14
16
In addition, whether or not any express assignment has been made, the provisions
of this Agreement which are for the benefit of Holders are also for the benefit
of, and enforceable by, any subsequent Holder.
(g) COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one and
the same Agreement.
(h) DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
(i) GOVERNING LAW. All questions concerning the construction, validity
and interpretation of this Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York.
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
HYBRIDON, INC.
By: /s/ X. Xxxxxxx Xxxxxxxxx, III
---------------------------------
Its: Chairman, President and Chief Executive Officer
------------------------------------------------
Acting on behalf of itself and as the representative
of the Holders:
FORUM CAPITAL MARKETS L.P.
By: /s/ C. Xxxxx Xxxxxxx
---------------------------------
Name: C. Xxxxx Xxxxxxx
Title: Senior Managing Director
15
