Exhibit 10.17
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT made on this 23rd day of December 1996 (the
"Agreement") by and among VIMRx PHARMACEUTICALS INC., a Delaware corporation
(the "Company"), the ARIES FUND, a Cayman Island Trust and THE ARIES DOMESTIC
FUND, L.P., a Delaware limited partnership (The Aries Fund and The Aries
Domestic Fund, L.P., together "The Aries Funds").
WHEREAS, pursuant to an Exchange Agreement dated November 21, 1996 by and
among the Company and the Aries Funds, as amended (the "Exchange Agreement"),
the Aries Funds have acquired from the Company shares of the Company's common
stock (the "Shares") which have not been registered under the Securities Act of
1933 (the "Act"); and
WHEREAS, the Company has agreed to register the Shares under the Act;
NOW, THEREFORE, The Aries Funds and the Company hereby agree as follows:
Section 1. Registration and Indemnification
1.1. Registration. The Company shall file, as promptly as possible, but no
later than 45 days from the date hereof, a registration statement on Form S-3,
or if such form is not available, such other applicable form, with the
Securities and Exchange Commission ("SEC") providing for the sale of the Shares
by The Aries Funds and any successors and assigns as provided herein
("Holders"); and shall use its best efforts to cause the registration statement
to be declared effective as soon as practicable, and to keep the registration
statement effective until the earlier of the time the distribution contemplated
thereby is complete or the time the Shares are eligible for sale to the public,
pursuant to Rule 144 under the Act. In addition, the Company shall use its
reasonable best efforts to effect such registrations, qualifications or
compliances (including, without limitation, the execution of any required
undertaking to file post-effective amendments, appropriate qualifications or
exemptions under applicable blue sky or other state securities laws and
appropriate compliance with applicable securities laws, requirements or
regulations) as may be reasonably requested, and as would permit or facilitate
the sale and distribution of all the Shares.
1.2. Expenses. The Company shall pay all expenses in connection with the
registration rights granted in Section 1.1 including, without limitation, the
fees and expenses of the Company's counsel and accountants, the costs and
expenses incident to the preparation, printing, filing and processing to
effectiveness of the registration statement, the costs of furnishing The Aries
Funds with a reasonable number of copies of the Final Prospectus, and the fees
and disbursements incurred in qualifying the Shares under applicable blue sky or
securities laws, but shall not include any underwriting discounts or
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commissions, stock transfer taxes and fees and expenses of counsel for any
Holders.
1.3. Agreements of the Holders. (a) Each Holder shall furnish in writing to
the Company all appropriate information reasonably requested by the Company
concerning it, in connection with preparation and processing of the requisite
registration statement (or post-effective amendments thereto), including a
shareholder's questionnaire as to securities held and other matters, and shall
otherwise reasonably cooperate with the Company in connection therewith.
(b) Each Holder agrees to deliver a final prospectus to the purchaser(s) of
any Shares sold pursuant to the registration statement to be filed pursuant to
Section 1.1 hereof.
1.4. Indemnification. (a) With respect to any registration statement which
includes Shares, the Company shall indemnify and hold harmless each Holder and
its officers, directors, employees, legal counsel, agents, investment managers
and general partners and each person, if any, who controls such Holder within
the meaning of the Securities Act of 1933, from and against any and all losses,
claims, damages and liabilities, joint or several, to which any such person may
become subject under the Securities Act of 1933, or otherwise, caused by,
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in such registration statement or post-effective
amendment or any prospectus included therein, or caused by, arising out of or
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and to reimburse any such persons for any legal or other expenses
reasonably incurred in connection with investigating or defending any such loss,
claim, damage, liability or action, except insofar as such losses, claims,
damages, or liabilities arise out of or are based upon any such untrue statement
or alleged untrue statement or omission or alleged omission, based upon
information furnished in writing to the Company by the Aries Funds or any such
Holder, expressly for use in such registration statement or post-effective
amendment.
(b) Each Holder shall indemnify the Company, its directors, officers,
employees, legal counsel, agents, and each person, if any, who controls the
Company within the meaning of the Securities Act of 1933 from and against any
and all losses, claims, damages and liabilities, joint and several, to which the
Company or any such person may become subject under the Securities Act of 1933,
or otherwise, caused by, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in such registration
statement or post-effective amendment or any prospectus included therein, or
caused by, arising out of or based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
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the statements therein not misleading, and to reimburse the Company and each
such person for any legal or other expenses reasonably incurred in connection
with investigating or defending any such loss, claim, damage, liability or
action, but only to the extent that such untrue statement or alleged untrue
statement, omission or alleged omission is caused by, arises out of or is based
upon information furnished in writing to the Company by such Holder expressly
for use in such registration statement or post-effective amendment. The
foregoing notwithstanding, no Holder shall be liable hereunder in an amount in
excess of the gross proceeds received by it as a result of sale of the Shares
pursuant to the Registration Statement.
(c) If the indemnification provided for in this Section 1.4 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 therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, 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.
1.5. Information and Cooperation. In the case of the registration,
qualification, exemption or compliance effected by the Company pursuant to this
Agreement, the Company will, upon reasonable request, inform each Holder as to
the status of such registration, qualification, exemption and compliance. At its
expense the Company:
(a) will advise the Holders:
(i) when the Registration Statement or any amendment thereto has been filed
with the Commission and when the Registration Statement or any post-effective
amendment thereto has become effective;
(ii) of any request by the Commission for amendments or supplements to the
Registration Statement or the prospectus included therein or for additional
information;
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(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for such purpose;
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities included therein
for sale in any jurisdiction, or the initiation or threatening of any proceeding
for such purpose; and
(v) of the happening of any event that requires the making of any changes
in the Registration Statement or the prospectus so that, as of such date, the
statements therein are not misleading, 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 the light of the circumstances under which they
were made) not misleading;
(b) will make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of any Registration Statement at the earliest
possible time;
(c) will furnish to each Holder, without charge, at least one copy of such
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, and, if the Holder so requests in writing,
all exhibits (including those incorporated by reference) in the form filed with
the Commission;
(d) during the Registration Period, will deliver to each Holder, without
charge, as many copies of the prospectus included in such Registration Statement
and any amendment or supplement thereto as such Holder may reasonably request;
and the Company consents to the use, consistent with the provisions hereof, of
the prospectus or any amendment or supplement thereto by each of the selling
Holders of Registrable Securities in connection with the offering and sale of
the Registrable Securities covered by the prospectus or any amendment or
supplement thereto. In addition, upon the reasonable request of the Holder and
subject in all cases to confidentiality protections reasonably acceptable to the
Company, the Company will meet with a Holder or a representative thereof at the
Company's headquarters to discuss all information relevant for disclosure in the
Registration Statement covering the Registrable Securities, and will otherwise
cooperate with any Holder conducting an investigation for the purpose of
reducing or eliminating such Holder's exposure to liability under the Act,
including the reasonable production of information at the Company's
headquarters;
(e) during the registration period, will deliver to each Holder, without
charge, (i) as soon as practicable (but in the case of the annual report of the
Company to its stockholders, within 120 days after the end of each fiscal year
of the Company) one copy of: (A) its annual report to its stockholders, if any
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(which annual report shall contain financial statements audited in accordance
with generally accepted accounting principles in the United States of America by
a firm of certified public accountants of recognized standing); (B) if not
included in substance in its annual report to stockholders, its annual report on
Form 10-K (or similar form); (C) each of its quarterly reports to its
stockholders, and, if not included in substance in its quarterly reports to
stockholders, its quarterly report on Form 10-Q (or similar form); and (D) a
copy of the full Registration Statement (the foregoing, in each case, excluding
exhibits); and (ii) upon reasonable request, all exhibits excluded by the
parenthetical to the immediately preceding clause (D), and all other information
that is generally available to the public;
(f) prior to any public offering of Shares pursuant to any Registration
Statement, will register or qualify or obtain an exemption for offer and sale
under the securities or blue sky laws of such jurisdictions as any such Holders
reasonably request in writing, provided that the Company shall not for any such
purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified, or to consent to
general service of process in any such jurisdiction, and will do any and all
other acts or things reasonably necessary or advisable to enable the offer and
sale in such jurisdictions of the Shares covered by such Registration Statement;
(g) will cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Shares sold pursuant to any
Registration Statement, free of any restrictive legends to the extent not
required at such time and in such denominations and registered in such names as
Holders may request.
(h) upon the occurrence of any event contemplated by Section 1.5(b)(v)
above, shall promptly prepare a post-effective amendment to the Registration
Statement or a supplement to the related prospectus, or file any other required
document so that, as thereafter delivered to purchasers of the Shares included
therein, the prospectus will not include any 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 under which they were made, not misleading; and
(i) will use its best efforts to comply with all applicable rules and
regulations of the Commission, and will make generally available to the Holders
not later than 45 days (or 90 days if the fiscal quarter is the fourth fiscal
quarter) after the end of its fiscal quarter in which the first anniversary date
of the effective date of the Registration Statement occurs, an earnings
statement satisfying the provisions of Section 11(a) of the Act.
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1.6. Rule 144. With a view to making available to the Holders the benefits
of certain rules and regulations of the Commission which at any time permit the
sale of the Shares to the public without registration, the Company agrees to use
it reasonable best efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Act, at all times;
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Exchange Act; and
(c) so long as a Holder owns any unregistered Shares, furnish to such
Holder upon any reasonable request a written statement by the Company as to its
compliance with Rule 144 under the Act, and of the Exchange Act, a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents of the Company as such Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing a Holder to sell any
such securities without registration.
Section 2. Notices. Any notice pursuant to this Agreement by the Company or
by The Aries Funds shall be in writing and shall be deemed to have been duly
given if delivered or mailed by certified mail five days after mailing, return
receipt requested:
If to The Aries Funds:
The Aries Trust or the Aries Domestic Fund, L.P.
c/o Paramount Capital Asset Management, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
Attn: Xxxxx Xxxxxx
If to the Company:
VIMRx Pharmaceuticals Inc.
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Fax No.: (000) 000-0000
Attn: Xx. Xxxxxxx X. Xxxxxxx
with a copy to:
Xxxxxx X. Xxxxxxxxxx, Esq.
Xxxxxxx Xxxxxx & Green, P.C.
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Each party hereto may from time to time change the address to which notices
to it are to be delivered or mailed hereunder by notice in accordance herewith
to the other party.
Section 3. Successors. All of the covenants and provisions of this
Agreement by or for the benefit of the Company or The Aries Funds shall bind and
inure to the benefit of their respective successors and assigns hereunder. No
such assignee may claim rights under Section 1 hereof without at the time of
such claim agreeing to be bound by the provisions thereof.
Section 4. Applicable Law. This Agreement shall be deemed to be a contract
made under the laws of the State of New York and for all purposes shall be
construed in accordance with the internal laws of said state.
Section 5. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and The
Aries Funds and their respective successors and assigns any legal or equitable
right, remedy or claim under this Agreement, and this Agreement shall be for the
sole and exclusive benefit of the Company and The Aries Funds and their
respective successors and assigns.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the day and year set forth below.
VIMRx PHARMACEUTICALS, INC.
By: /s/ Xxxxxxx X. X'Xxxxxxx
Xxxxxxx X. X'Xxxxxxx
Chief Financial Officer
THE ARIES FUND, A CAYMAN ISLAND TRUST
By: its Investment Manager,
PARAMOUNT CAPITAL ASSET
MANAGEMENT, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, M.D.
Xxxxxxx X. Xxxxxxxxx, M.D.,
President
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THE ARIES DOMESTIC FUND, L.P.
By: its General Partner,
PARAMOUNT CAPITAL ASSET
MANAGEMENT, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, M.D.
Xxxxxxx X. Xxxxxxxxx, M.D.,
President
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