Execution Copy
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Registration Rights Agreement")
is entered into as of April 26, 2002, by and between Genta Incorporated, a
Delaware corporation (the "Company") and Garliston Limited, a limited company
formed in the jurisdiction of Ireland ("Aventis").
RECITALS
WHEREAS, the Company and Aventis have entered into an Ex-U.S.
Commercialization Agreement dated as of April 26, 2002 (the "Ex-U.S.
Commercialization Agreement"), pursuant to which the Company has granted Aventis
certain commercialization rights outside the United States;
WHEREAS, the Company and Aventis Pharmaceuticals Inc., a Delaware
corporation ("API") have entered into a U.S. Commercialization Agreement (the
"U.S. Commercialization Agreement"), pursuant to which the Company has granted
API certain development and U.S. commercialization rights (the U.S.
Commercialization Agreement and the Ex-U.S. Commercialization Agreement are
collectively referred to herein as the "Commercialization Agreements");
WHEREAS, the Company and Aventis have entered into a Convertible Note
Purchase Agreement dated as of April 26, 2002 (the "Note Purchase Agreement"),
pursuant to which Aventis has agreed to make available to the Company, subject
to the achievement of certain milestones, up to $75 million in exchange for
Convertible Promissory Notes (the "Notes") of the Company;
WHEREAS, the Company and Aventis have entered into a Securities Purchase
Agreement dated as of April 26, 2002 (the "Purchase Agreement"), pursuant to
which Aventis has agreed, at the option of the Company, to acquire shares of the
Company's Common Stock (the "Common Stock");
WHEREAS, the Company and Aventis have entered into a Standstill and Voting
Agreement dated as of April 26, 2002 (the "Standstill Agreement"), pursuant to
which Aventis has agreed to certain standstill and voting provisions with
respect to the Company's Common Stock; and
WHEREAS, as a condition to consummating the Purchase Agreement, the
Commercialization Agreements, the Note Purchase Agreement, the Standstill
Agreement and the execution of the Notes (collectively, the "Transaction
Documents") the Company has agreed to enter into this Agreement with Aventis.
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth herein, and for other good and
valuable consideration, intending to be legally bound hereby, the parties
mutually agree as follows:
1. DEFINITIONS
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As used in this Registration Rights Agreement the following terms shall
have the following respective meanings:
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the rules
and regulations promulgated under the Exchange Act (as defined below); provided,
however, that for purposes of this Agreement, Aventis and its Affiliates, on the
one hand, and the Company and its Affiliates, on the other hand, shall not be
deemed to be "Affiliates" of each other.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Form S-3" means such form under the Securities Act as in effect on the
date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"Holder" means Aventis and any Permitted Assignee, each so long as such
person owns of record Registrable Securities that have not been sold to the
public. A "Permitted Assignee" means, with respect to Aventis, any Affiliate to
whom Aventis has transferred Registrable Securities in accordance with Sections
5(c) of the Securities Purchase Agreement and Section 8(d)(3) of the Notes, as
the case may be.
"Other Selling Stockholders" means stockholders of the Company, other than
Senior Holders, who have, as of the date hereof, contractual registration
rights.
"Register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
"Registrable Securities" means (a) all Company Common Stock received and
to be received by a Holder in connection with the Securities Purchase Agreement
and all shares of Company Common Stock issued upon conversion of the Notes and
(b) any securities issued or issuable with respect to such shares of such Common
Stock by way of a stock dividend or stock split or in connection with a
combination or reclassification of shares, recapitalization, merger,
consolidation or other reorganization or otherwise; provided, however, that any
particular Registrable Securities will cease to be Registrable Securities when
(x) a registration statement with respect to the sale of such stock becomes
effective under the 1933 Act and all such securities have been disposed of in
accordance with such registration statement or (y) all such securities have been
sold pursuant to an exemption from the registration requirements of the
Securities Act.
"Registration Statement" means any registration statement of the Company
that covers the Registrable Securities and lists holders thereof as selling
stockholders pursuant to the provisions of this Registration Rights Agreement,
including the prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference or deemed to be incorporated by reference therein.
"SEC" or "Commission" means the Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended.
"Senior Holders" means stockholders of the Company who have, as of the
date hereof, contractual registration rights, which contractual rights limit or
prohibit the grant by the Company of registration rights that are pari passu
with or senior to such Senior Holders' registration rights.
2. REGISTRATION OF SHARES
2.1 S-3 Registration. The Holder shall have the right to request
registration on Form S-3 pursuant to Rule 415 under the Securities Act covering
the resale of the Registrable Securities in accordance with the following terms:
(a) Within 90 days after the written request of the Holder,
the Company shall prepare and file with the Commission a Registration Statement
on Form S-3 covering the resale of the Registrable Securities issued by the
Company in accordance with the terms and conditions of the Securities Purchase
Agreement; provided, however, that the Company shall not be required to register
any such Registrable Securities prior to the second anniversary of the closing
date of the sale of the Registrable Securities under the Securities Purchase
Agreement.
(b) If the Company has converted any portion of the Notes,
then within 90 days after the written request of the Holder, the Company shall
prepare and file with the Commission a Registration Statement on Form S-3
covering the resale of the Registrable Securities issued by the Company upon the
conversion of such Notes; provided, however that the Company shall not be
required to register any such Registrable Securities (i) if the Holder proposes
to sell Registrable Securities at an aggregate price to the public of less than
$5,000,000 (or, if applicable, such lesser amount as the Company has converted
under the Notes) or (ii) if, in a given twelve-month period, the Company has
effected one (1) such registration in such period, unless the Company has
converted any portion of the Notes more than once in such twelve-month period,
in which case the Company shall, upon request of the Holder, effect additional
registrations covering the resale of the Registrable Securities issued upon such
conversion(s).
(c) Notwithstanding the foregoing, if (i) in the good faith
judgment of the Board of Directors of the Company, any registration requested
hereunder would be detrimental to the Company and the Board of Directors of the
Company concludes, as a result, that it is in the best interests of the Company
to defer the filing of such Registration Statement at such time, and (ii) the
Company shall furnish to the Holder a certificate signed by the President of the
Company stating that in the good faith judgment of the Board of Directors of the
Company, it would be detrimental to the Company for such Registration Statement
to be filed in the near future and that it is, therefore, in the best interests
of the Company to defer the filing of such Registration Statement, then the
Company shall have the right to defer such filing for a period of not more than
ninety (90) days after the receipt of the request of the Holder, and provided,
further, that the Company shall not defer its obligation in this manner more
than once in any twelve-month period.
(d) Notwithstanding anything to the contrary contained in this
Section 2.1, the Holder agrees that it shall not at any time transfer, sell or
otherwise dispose of Registrable Securities within any three-month period in an
amount which shall exceed the volume limitations set
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forth in Rule 144(e) of the Securities Act, unless such Registrable Securities
are included in an underwritten public offering in accordance with Section
2.3(d) hereof.
2.2 Additional Registration Obligations of the Company. In
connection with the registration obligations of the Company set forth above, the
Company will use its commercially reasonable efforts to do the following:
(a) At the request of the Holder, include in such Registration
Statement the Plan of Distribution in substantially the form set forth in
Appendix I hereto.
(b) Cause such Registration Statement(s) to become effective
at the earliest possible time and to keep such Registration Statement(s)
continuously effective for the shorter period of: (i) one year from such initial
filing date, (ii) until all Registrable Securities covered by the Registration
Statement(s) have been sold or (iii) until the first date when all Registrable
Securities covered by the Registration Statement(s) may immediately be sold
during any 90-day period without registration under the Securities Act pursuant
to the exemptions provided by Rule 144(k) under the Securities Act (the
"Registration Period").
(c) Prepare and file with the SEC such pre-effective and
post-effective amendments and supplements to such Registration Statement(s) and
the prospectus used in connection with such Registration Statement(s) as may be
necessary to cause the Registration Statement(s) to become effective, to keep
the Registration Statement(s) continuously effective during the Registration
Period and not misleading, and as may otherwise be required or applicable under,
and to comply with the provisions of, the Securities Act with respect to the
disposition of all securities covered by such Registration Statement(s) during
the Registration Period.
(d) Furnish to the Holder such number of copies of a
prospectus, including a preliminary prospectus, and each amendment or supplement
thereto, in conformity with the requirements of the Securities Act, and such
other documents as they may reasonably request in order to facilitate the
disposition of Registrable Securities owned by them.
(e) Notify promptly the Holder (and in any event within five
(5) business days after) and (if requested by any such Holder) confirm such
notice in writing, (i)(A) when a prospectus or any prospectus supplement or
post-effective amendment is proposed to be filed, and, (B) with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective, (ii) of any request by the SEC or any other federal or state
governmental authority for amendments or supplements to a Registration Statement
or related prospectus or for additional information, (iii) of the issuance by
the SEC of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose, (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
proceeding for such purpose, and (v) of the occurrence of any event or
circumstance that makes any statement made in such Registration Statement(s) or
related prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making
of any changes in such Registration Statement(s), prospectus or documents so
that, in the case of the Registration Statement(s) and any amendment or
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supplement thereto, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, not misleading, and that in the case of the
prospectus, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(f) Make every reasonable effort to avoid the issuance of, or,
if issued, obtain the withdrawal of, any order suspending the effectiveness of a
Registration Statement, or the lifting of any suspension of the qualification
(or exemption from qualification) of any of the Registrable Securities for sale
in any jurisdiction, at the earliest practicable moment.
(g) If requested by the holders of a majority of the
Registrable Securities being sold in connection with such offering, (i) promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the Holders reasonably request should be included therein
regarding such holders or the plan of distribution of the Registrable
Securities, and (ii) make all required filings of the prospectus supplement or
such post-effective amendment as soon as practicable after the Company has
received notification of such matters to be incorporated in such prospectus
supplement or post-effective amendment; provided, however, that the Company
shall not be required to take any action pursuant to this Section 2.2(g) that
would, in the opinion of outside counsel for the Company, violate applicable
law.
(h) Upon the occurrence of any event contemplated by Section
2.2(e), as promptly as practicable, prepare any required supplement or
amendment, including a post-effective amendment, to each Registration Statement
or a supplement to the related prospectus or any document incorporated or deemed
to be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, the prospectus contained in such Registration
Statement will 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 the
statements therein, in light of the circumstances under which they were made,
not misleading.
(i) Promptly file documents required of the Company for normal
"Blue Sky" clearance for the disposition by the Holder and any Permitted
Assignees of the Registrable Securities in such states as the Holder may
reasonably request in writing to the Company, provided, however, that the
Company shall not be required (i) to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or
has not so consented; (ii) subject itself to general taxation in any such
jurisdiction; (iii) provide any undertakings that cause the Company undue
expense or burden; or (iv) make any change in its charter or bylaws.
(j) Use commercially reasonable efforts to cause all
Registrable Securities registered by such Registration Statement to be listed on
each securities exchange or automated quotation system, if any, on which similar
securities issued by the Company are then listed.
(k) Cooperate with the Holder to facilitate the timely
preparation and delivery of certificates representing the Registrable Securities
to be sold pursuant to the Registration Statement(s), free of any restrictive
legends (except as required pursuant to Section 2.1(d) above)
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and in such denominations and registered in such names as the Holders may
request a reasonable period of time prior to sales of the Registrable Securities
pursuant to the Registration Statement(s).
Notwithstanding anything to the contrary set forth herein or any registration
effected hereunder, the Holder shall be subject to the transfer restrictions
contained in Section 5(c) of the Securities Purchase Agreement and Section
8(d)(3) of the Notes.
2.3 Piggyback Registration.
(a) If the Company at any time proposes to register (including
for this purpose a registration effected by the Company for stockholders other
than the Holders) any of its Common Stock or other securities under the
Securities Act in connection with the public offering of such securities (other
than pursuant to Section 2.1 hereof or with respect to registration statements
on Forms S-4 or S-8 relating solely to the sale of securities to participants in
a Company stock plan), the Company shall, at each such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within 10 days after mailing of such notice by the Company in
accordance with Section 4.8, the Company shall, use commercially reasonable
efforts to cause all of the Registrable Securities that each such Holder has
requested to be registered under the Securities Act and qualified for sale under
any state blue sky law, all to the extent required to permit such sale or other
disposition of such Registrable Securities, provided, however, if the Company is
advised in writing in good faith by any managing underwriter of the Company's
securities being offered in a public offering pursuant to such registration
statement that the amount to be sold by persons other than the Company is
greater than the amount which can be offered without adversely affecting the
offering, the Company may reduce the amount offered for the account of the
Holder to a number deemed reasonably satisfactory by such managing underwriter.
In any circumstance in which all or a portion of the Registrable Securities
requested to be included in a registration on behalf of the Holder cannot be so
included as a result of the foregoing sentence, then the shares to be excluded
shall be determined in the follow sequence: (i) first, Registrable Securities
held by the Holder (which shall be excluded or reduced among the Holder and
Other Selling Stockholders requesting inclusion of securities in such
registration pro rata on the basis of the number of shares of Registrable
Securities and other securities held by the Holder and such Other Selling
Stockholders); (ii) second, securities held by Senior Holders requesting
inclusion in such registration; and (iii) third, securities sought to be
registered by the Company for its own account. The Company shall not limit the
number of Registrable Securities to be included in a registration pursuant to
this Agreement in order to include shares held by stockholders with no
registration rights.
(b) The Company shall have the right to terminate or withdraw
any registration initiated by it under this Section 2.3 prior to the
effectiveness of such registration whether or not the Holder has elected to
include Registrable Securities in such registration.
(c) If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall so
advise the Holder as a part of the written notice given pursuant to Section
2.3(a). In such event, the right of the Holder to registration pursuant to this
Section 2.3 shall be conditioned upon the Holder's participation in such
underwriting and the inclusion of the Registrable Securities in the underwriting
to the extent provided herein. The Holder shall (together with the Company and
the other holders of securities of
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the Company with registration rights to participate therein distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected by the Company.
(d) Notwithstanding anything to the contrary contained in this
Section 2, the Company shall not be required to register any Registrable
Securities issued under the Securities Purchase Agreement prior to the second
anniversary of the closing date of the sale of such Registrable Securities.
2.4 Seller Information. The Company may require each Holder of
Registrable Securities as to which any registration is being effected to furnish
to the Company such information regarding such Holder, such Holder's Registrable
Securities and such Holder's intended method of disposition of Registrable
Securities as the Company may from time to time reasonably request; provided
that such information shall be used only in connection with such registration.
If the Registration Statement(s) refers to any Holder by name or otherwise
as the seller of any securities of the Company, then such Holder will promptly
(i) notify the Company and its counsel of the existence of any fact of which
such Holder becomes aware and the happening of any event which relates to Holder
or the distribution of the securities owned by such Holder which results in the
Registration Statement(s) containing an untrue statement of material fact or
omitting to state a material fact required to be stated therein or necessary to
make any statements therein not misleading, or the prospectus included in such
Registration Statement(s) containing an untrue statement of material fact or
omitting to state a material fact required to be stated therein or necessary to
make any statements therein, in light of the circumstances under which they were
made, not misleading, and (ii) provide to the Company such information which
relates to Holder or the distribution of the securities owned by such Holder as
is necessary to enable the Company to prepare a supplement or post-effective
amendment to such Registration Statement(s) or related prospectus or any
document incorporated therein by reference or file any other documents required
so that such Registration Statement(s) and prospectus will not contain any
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 light of the
circumstances under which they were made, not misleading.
2.5 Notice to Discontinue. If the Company notifies the Holders in
accordance with Section 2.2(e) above to suspend the use of the Prospectus until
the requisite changes to the prospectus have been made, then the Holders shall
immediately suspend use of such prospectus for, and the period of effectiveness
of the Registration Statement(s) provided for in Section 2.2(b) above shall be
extended by, the number of days from and including the date of giving such
notice to and including the date when the Holder receives such amended or
supplemented prospectus pursuant to Section 2. If so directed by the Company,
the Holders 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 Registrable Securities. Any such amendment, supplement
or document will be prepared and filed as promptly as reasonably practicable
under the circumstances, as determined in good faith by the Company, it being
understood however that the Company may have bona fide reasons to delay such
preparation and filing for a period which may not, in any event, exceed sixty
days. The Registration Period set forth in Section 2.2(b) will be extended by
any period of discontinuance under this Section 2.5.
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2.6 Expenses of Registration. All expenses incident to the
performance or compliance with this Registration Rights Agreement by the Company
will be borne by the Company, regardless of whether the Registration
Statement(s) becomes effective, including, without limitation, (i) all
registration and filing fees and expenses (including filings made with the
National Association of Securities Dealers ("NASD"), if applicable); (ii) fees
and expenses (including fees and expenses of counsel) of compliance with federal
securities and state Blue Sky and other securities laws; (iii) expenses of
printing, messenger and delivery services, duplication, word processing and
telephone incurred by the Company (but not by the holders of Registrable
Securities); (iv) fees and disbursements of counsel for the Company; (v) all
application and filing fees in connection with listing Common Stock on a
national securities exchange or automated quotation system pursuant to the
requirements hereof; (vi) all fees and disbursements of independent certified
public accountants of the Company (including the expenses of any special audit
and "cold comfort" letters required by or incident to such performance) and
(vii) reasonable fees and expenses of one counsel for all participating Holders,
not to exceed $15,000 in the aggregate. The Company will, in any event, bear its
own internal expenses (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the
expenses of any annual audit and the fees and expenses of any person, including
special experts, retained by the Company.
2.7 Indemnification.
(a) Indemnification by Company. To the extent permitted by
law, the Company will indemnify and hold harmless each Holder, the partners,
officers and directors of each Holder and each person, if any, who controls such
Holder within the meaning of the Securities Act or the Exchange Act, against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation") by the Company: (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement(s) including any document incorporated by reference
therein or any amendments or supplements thereto, or 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, (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
prospectus (including any preliminary, final or summary prospectus, amendment or
supplement thereto) included in such Registration Statement(s) or any omission
or alleged omission to state a material fact required to be stated therein or
necessary to make any statement therein, in light of the circumstances under
which they were made, not misleading, or (iii) any violation or alleged
violation of the Securities Act, the Exchange Act, any state securities law or
any rule or regulation promulgated under the Securities Act, the Exchange Act or
state securities law in connection with the offering covered by the Registration
Statement(s); provided, however, that the Company will not be liable for
indemnification in any such case to the extent that any losses, claims, damages
or liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or omission or alleged omission of a
material fact so made in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use in connection with such registration. Subject to Section
2.7(c), the Company will pay to each such Holder, partner, officer, director or
controlling person for any legal or other expenses reasonably
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incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action.
(b) Indemnification by Holder of Registrable Securities. To
the extent permitted by law, each Holder will, if Registrable Securities held by
such Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify and hold harmless the
Company, each of its directors, its officers, agents and each person, if any,
who controls the Company within the meaning of the Securities Act against any
losses, claims, damages or liabilities (joint or several) to which the Company
or any such director, officer, agent or controlling person may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs as a result of
reliance by the Company upon and in conformity with written information
furnished by such Holder under an instrument duly executed by such Holder and
stated to be specifically for use in connection with such registration; and each
such Holder will pay any legal or other expenses reasonably incurred by the
Company or any such director, officer, agent, controlling person or other person
in connection with investigating or defending any such loss, claim, damage,
liability or action if it is judicially determined that there was such a
Violation; provided, however, that in no event will any indemnity under this
Section 2.7(b) exceed the dollar amount of proceeds from the offering received
by such Holder.
(c) Conduct of Indemnification Proceedings. Promptly after
receipt by an indemnified party under this Section 2.7 of notice of the
commencement of any action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made against any indemnifying
party under this Section 2.7, deliver to the indemnifying party a written notice
of the commencement thereof and the indemnifying party will have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however,
that an indemnified party will have the right to retain its own counsel, with
the fees and expenses to be paid by the indemnifying party, if, in the
reasonable judgment of any such indemnified party, based upon advice of counsel,
a conflict of interest may exist between such indemnified party and the
indemnifying party with respect to such claims (in which case, if the
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party will not have the right to assume the defense of such claim
on behalf of such indemnified party; provided, however, that the indemnified
party will be entitled to elect only one counsel at the expense of the
indemnifying party and such counsel shall be reasonably acceptable to the
indemnifying party). The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action, if it is
finally determined in a court of competent jurisdiction (which determination is
not subject to appeal) that such failure is materially prejudicial to its
ability to defend such action, will relieve such indemnifying party of any
liability to the indemnified party under this Section 2.7, but the omission so
to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 2.7. No indemnifying party will be liable for any settlement of any
claim or action effected without its written consent, which consent will not be
unreasonably withheld. Each indemnified party shall furnish such information
regarding itself or the claim in question as an indemnifying party may
reasonably
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request in writing and as shall be reasonably required in connection with
defense of such claim and litigation resulting therefrom.
(d) Contribution. If the indemnification provided for in this
Section 2.7 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any losses, claims, damages or liabilities
referred to herein, the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, will to the extent permitted by applicable law
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability 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 Violation(s) that resulted
in such loss, claim, damage or liability, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party will be determined by a court of law 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; provided that in no event will any contribution by a
Holder hereunder exceed the dollar amount of proceeds from the offering received
by such Holder.
(e) Survival; Settlement. The obligations of the Company and
Holders under this Section 2.7 will survive completion of any offering of
Registrable Securities in a registration statement, the termination of this
Registration Rights Agreement and any sale by the Holders of Registrable
Securities. No indemnifying party, in the defense of any such claim or
litigation, will, except with the consent of each indemnified party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.
(f) Termination of Registration Rights. Notwithstanding
anything herein to the contrary, a Holder will not be entitled to any
registration rights or other rights hereunder (a) if all Registrable Securities
held by such Holder have been sold or (b) after the first date on which all
Registrable Securities held by such Holder may immediately be sold during any
90-day period without registration under the Securities Act pursuant to the
exemptions provided by Rule 144(k) under the Securities Act ("Termination
Event"); provided, however, that any right to indemnification or any other right
that had accrued to the benefit of such Holder prior to the Termination Event
but had not been satisfied as of the Termination Event, will remain in effect
after the Termination Event until satisfied.
2.8 "Market Stand-Off" Agreement. Except in connection with
Registrable Securities registered by the Company pursuant to this Agreement, if
requested by the Company and an underwriter of Common Stock (or other
securities) of the Company, the Holder shall not sell or otherwise transfer or
dispose of any Common Stock of the Company held by the Holder during the ninety
(90)-day period following the effective date of a registration statement of the
Company filed under the Securities Act; provided that in the event the Holder
owns less than five percent of all of the issued and outstanding shares of
capital stock of the Company, such restriction will not apply.
10
The Holder agrees to execute a market stand-off agreement with said underwriters
in customary form consistent with the provisions of this Section 2.8.
3. RULE 144
During the Registration Period, the Company covenants that it will use
commercially reasonable efforts to file the reports required to be filed by it
(if so required) under the Securities Act and the Exchange Act (and the Rules
and Regulations adopted by the SEC thereunder) in a timely manner and, if at any
time the Company is not required to file such reports, it will, upon the request
of any Holder of Registrable Securities, use its commercially reasonable efforts
to make publicly available other information so long as necessary to permit
sales pursuant to Rule 144 under the Securities Act. The Company further
covenants that it will take such further action as any Holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell Registrable Securities without registration under
the Securities Act pursuant to the exemptions provided by Rule 144 under the
Securities Act. Upon the request of any Holder of Registrable Securities, the
Company will deliver to such Holder a written statement as to whether it has
complied with such information requirements.
With a view to making available to Holders the benefits of Rule 144
promulgated under the Securities Act, the Company agrees: (A) so long as any
Holder owns Registrable Securities, to file the reports required to be filed by
it (if so required) under Sections 13 or 15(d) of the Exchange Act (and the
Rules and Regulations adopted by the SEC thereunder) in a timely manner and,
promptly upon request, to furnish to any such Holder such information as may be
necessary and otherwise reasonable, and to cooperate with such Holder, to permit
such Holder, subject to any transfer restrictions contained in Section 5(c) of
the Securities Purchase Agreement and Section 8(d)(3) of the Notes, to sell such
Registrable Securities pursuant to Rule 144 without registration; (B) if at any
time the Company is not required to file reports with the SEC pursuant to
Sections 13 or 15(d) of the Exchange Act, it will, upon the request of any
Holder, to make publicly available other information sufficient, and for as long
as is necessary, to permit sales of Registrable Securities pursuant to Rule 144
under the Securities Act, and upon the request of any Holder, to use
commercially reasonable efforts to make publicly available other information
sufficient, and for as long as is necessary, to permit publication by brokers
and dealers of quotations for the Common Stock and sales of the Common Stock in
accordance with Rule 15c2-11 under the Exchange Act.
4. MISCELLANEOUS
4.1 Governing Law; Jurisdiction. This Registration Rights Agreement
shall be governed by and construed in accordance with the laws of the State of
New York without regard to applicable principles of conflicts of law.
4.2 Survival of Representations, Warranties and Covenants. Except
for such terms of this Registration Rights Agreement which provide for longer
survival periods, all covenants, agreements, representations and warranties made
by the parties to this Registration Rights Agreement will survive the execution
of this Registration Rights Agreement until the expiration of the Registration
Period, not withstanding any investigation made by any Holder.
11
4.3 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
Holder of Registrable Securities from time to time. In addition, this
Registration Rights Agreement shall be binding on the Company and its successors
and assigns.
4.4 Entire Agreement. This Registration Rights Agreement and the
instruments referenced herein, constitute the entire agreement between the
parties regarding the subject matter hereof and supersedes all previous
writings, understandings, representations and agreements. No terms of this
Registration Rights Agreement may be varied or modified by any prior or
subsequent statement, conduct or act of either of the parties, except that the
parties may amend this Registration Rights Agreement as described in Section
4.6.
4.5 Severability. In case any provision of this Registration Rights
Agreement is determined to be invalid, illegal, or unenforceable, the validity,
legality, and enforceability of the remaining provisions will not in any way be
affected or impaired thereby.
4.6 Amendment and Waiver. The provisions of this Registration Rights
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of all affected Holders.
4.7 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Registration Rights Agreement
will impair any such right, power or remedy, nor will it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character on any Holder's part of any breach, default or
noncompliance under this Registration Rights Agreement or any waiver on such
Holder's part of any provisions or conditions of this Registration Rights
Agreement must be in writing and will be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Registration Rights Agreement, by law, or otherwise afforded to Holders, will be
cumulative and not alternative.
4.8 Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier or by confirmed
facsimile, and shall be effective five days after being placed in the mail, if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier or confirmed facsimile, in each case addressed as set forth below. The
addresses for such communications shall be
(a) if to the Company, to:
Genta Incorporated
0 Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxx Xxxxxx 00000
12
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: President
with a copy so mailed to:
Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxx, Esq.
(b) if to Holder:
Garliston Limited
c/o Aventis Pharmaceuticals Inc.
000 Xxxxxxxx Xxxxxxxxx Xxxxxxxxx
Mail Code SC3-820A
Xxxxxxxxxxx, Xxx Xxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
and
AVENTIS
Espace Europeen de 1'Entreprise
00 xxxxxx xx 0'Xxxxxx
00000 XXXXXXXXXXXX
XXXXXX
Attention: Xxxx-Xxxxxxxx Fort and Xxxxxxxx Xxxxx
and
Aventis Pharmaceuticals Inc.
Vice President, Legal Corporate Development
000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000-0000
13
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
with a copy to:
Xxxxxx, Xxxxx & Bockius, LLP
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxx Xxxxxx, Esq.
4.9 Headings. The headings of the various sections of this
Registration Rights Agreement have been inserted for convenience of reference
only and will not be deemed to be part of this Registration Rights Agreement.
4.10 Counterparts. This Registration Rights Agreement may be
executed in any number of counterparts, each such counterpart will be deemed an
original instrument, but all such counterparts will constitute but one
agreement.
4.11 Third Party Beneficiaries. This Registration Rights Agreement
is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision
hereof be enforced by any other person.
4.12 Further Assurances. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Registration Rights Agreement and the
consummation of the transactions contemplated hereby.
4.13 Joint Participation in Drafting. Each party to this
Registration Rights Agreement has participated in the negotiation and drafting
of this Registration Rights Agreement. As such, the language used herein and
therein shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction will be applied
against any party to this Registration Rights Agreement.
[The rest of this page intentionally left blank]
14
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date set forth in the first paragraph hereof.
Genta Incorporated
By: __________________________________
Name: ________________________________
Title: _______________________________
Garliston Limited
By: __________________________________
Name: ________________________________
Title: _______________________________
15
Appendix I
PLAN OF DISTRIBUTION
To the extent required, the names of any agent or broker-dealer and
applicable commissions or discounts and any other required information with
respect to any particular offer will be set forth here or in the accompanying
prospectus supplement. The selling stockholders reserve the sole right to accept
or reject, in whole or in part, any proposed purchase of the shares to be made
directly or through agents.
The selling stockholder may from time to time, in one or more
transactions, sell all or a portion of the shares on the Nasdaq National Market,
in negotiated transactions, in underwritten transactions or otherwise, at prices
then prevailing or related to the then current market price or at negotiated
prices. The offering price of the shares from time to time will be determined by
the selling stockholder and, at the time of such determination, may be higher or
lower than the market price of the shares on the Nasdaq National Market. In
connection with an underwritten offering, underwriters or agents may receive
compensation in the form of discounts, concessions or commissions from a selling
shareholder or from purchasers of shares for whom they may act as agents, and
underwriters may sell shares to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agents. In connection with distributions of the shares or otherwise, the selling
stockholder may enter into hedging transactions with broker-dealers or other
financial institutions. In connection with these transactions, broker-dealers or
other financial institutions may engage in short sales of Company Common Stock
in the course of hedging the positions they assume with such selling
stockholder. Under agreements that may be entered into by us, underwriters,
dealers and agents who participate in the distribution of shares may be entitled
to indemnification by us against certain liabilities, including liabilities
under the Securities Act of 1933 as amended, (the "Securities Act"), or to
contribution with respect to payments which such underwriters, dealers or agents
may be required to make in respect thereof. The shares may be sold directly or
through broker-dealers acting as principal or agent, or pursuant to a
distribution by one or more underwriters on a firm commitment or best-efforts
basis. The methods by which the shares may be sold include:
o a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
o privately negotiated transactions; and
o underwritten transactions.
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The selling stockholder and any underwriters, dealers or agents
participating in the distribution of the offered shares may be deemed to be
"underwriters" within the meaning of the Securities Act, and any profit on the
sale of the shares by the selling stockholder and any commissions received by
these broker-dealers may be deemed to be underwriting commissions under the
Securities Act.
When any selling stockholder elects to make a particular offer of shares,
a prospectus supplement, if required, will be distributed which will identify
any underwriters, dealers or agents and any discounts, commissions and other
terms constituting compensation from the selling stockholder and any other
required information.
In order to comply with the securities laws of certain states, if
applicable, the shares may be sold only through registered or licensed brokers
or dealers. In addition, in certain states, the shares may not be sold unless
they have been registered or qualified for sale in such state or an exemption
from such registration or qualification requirement is available and is complied
with.
The Company has agreed to pay all costs and expenses incurred in
connection with the registration under the Securities Act of the shares,
including, without limitation, all registration and filing fees, fees and
disbursements of Company counsel and counsel for the selling stockholder and
certain accounting and printing costs. The selling stockholder will pay any
brokerage fees and commissions, and stock transfer and other taxes attributable
to the sale of the shares. The Company has also agreed to indemnify the selling
stockholders and their respective officers, directors and trustees and each
person who "controls," within the meaning of the Securities Act, the selling
stockholders against certain losses, claims, damages, liabilities and expenses
arising under the securities laws in connection with this offering. Each selling
stockholder has agreed to indemnify the Company, and its officers and directors
and each person who "controls" Genta Incorporated against any losses, claims,
damages, liabilities and expenses arising under the securities laws in
connection with this offering with respect to written information furnished to
us by such selling stockholder.
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