EXHIBIT 10.2
TO
NeoRx Corporation's
Report on Form 8-K
Dated
October 7, 1997
PREFERRED STOCK PURCHASE AGREEMENT
This PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of
August 8, 1997, is entered into by and between NEORX CORPORATION, a Washington
corporation (the "Company"), and XXXXXXX & XXXXXXX DEVELOPMENT CORPORATION, a
New Jersey corporation (the "Investor").
RECITAL
The Investor desires to purchase from the Company, and the Company
desires to sell to the Investor, shares of the Company's Series 4 Convertible
Preferred Stock, $.02 par value (the "Preferred Stock"), upon the terms and
conditions set forth herein and in connection with the execution of a separate
License and Development Agreement between Xxxxxxx Pharmaceutica N.V. ("Xxxxxxx")
and the Company, dated as of even date herewith (the "License Agreement").
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows:
1. Purchase and Sale
Upon the terms and subject to the conditions of this Agreement, the
Investor hereby agrees to purchase from the Company for the aggregate purchase
price of Five Million U.S. Dollars (US $5,000,000) (the "Purchase Price"), and
the Company hereby agrees to issue, sell and deliver to the Investor in exchange
for the Purchase Price, one thousand (1,000) shares of Preferred Stock (the
"Shares"), which amount has been determined by dividing (a) the Purchase Price
by (b) $5,000 per share.
The Investor shall pay the Purchase Price to the Company by bank wire
transfer to the account designated by the Company, such payment to be received
by the date of this Agreement. On the date of this Agreement after receipt of
the Purchase Price, the Company shall (a) deliver to the Investor, or instruct
its transfer agent to deliver to the Investor, a certificate, registered in the
Investor's name, representing the Shares, and (b) cause its outside counsel to
deliver an opinion to the Investor, dated as of the date of this Agreement,
substantially to the effect of Exhibit A hereto.
2. Representations and Warranties of the Investor Regarding the Shares
The Investor hereby represents and warrants to the Company as of the
date of this Agreement as follows:
2.1 High Degree of Risk
There can be no assurance that the Company will be able to obtain its
projected goals, and the Company will need significant additional capital to be
successful, which capital may not be readily available when and as needed.
2.2 Professional Advice
The Investor has obtained, to the extent it deems necessary, its own
professional advice with respect to the risks inherent in the investment in the
Shares, the condition of the Company and the suitability of the investment in
the Shares in light of the Investor's financial condition and investment needs.
2.3 Sophistication
The Investor, either alone or with the assistance of its professional
advisors, has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of the prospective
investment in the Shares.
2.4 Suitability
The Investor has adequate net worth and means for providing for its
current financial needs and contingencies and has no need for liquidity of
investment with respect to the Shares. The Investor's overall commitment to
investments that are illiquid or not readily marketable is not disproportionate
to its net worth, and investment in the Shares will not cause such overall
commitment to become excessive.
2.5 Access to Information
The Investor has been given access to all information requested by it
regarding the Company, including, in particular, the current financial condition
of the Company and the risks associated therewith, and has utilized such access
to its satisfaction for the purpose of obtaining information about the Company
and the Investor has either attended or been given a reasonable opportunity to
attend a meeting with representatives of the Company for the purpose of asking
questions of, and receiving answers from, such representatives concerning the
2
terms and conditions of the offering of the Shares and to obtain any additional
information, to the extent reasonably available, necessary to verify the
accuracy of information provided about the Company.
2.6 Purchase Entirely for Own Account
The Shares will be acquired for investment for the Investor's own
account, not as a nominee or agent, and not with a view to the distribution of
any part thereof. The Investor has no present intention of selling, granting any
participation in or otherwise distributing the same in a manner contrary to the
Securities Act of 1933, as amended (the "Act"), or any applicable state or
foreign securities or Blue Sky laws, and has no agreement or arrangement with
any person to sell, transfer or grant participations to such person or to any
third person with respect to any of the Shares.
2.7 Due Diligence
The Investor has been solely responsible for its own due diligence
investigation of the Company and the Company's business, and its own analysis of
the merits and risks of the investment made pursuant to this Agreement, and is
not relying on anyone else's analysis or investigation of the Company, its
business or the merits and risks of the Shares other than professionals employed
specifically by the Investor to assist the Investor. In taking any action or
performing any role relative to the arranging of the investment being made
pursuant to this Agreement, the Investor has acted solely in its own interest
and not in the interest of any other person, and no other person has acted as an
agent or fiduciary for the Investor.
2.8 Restricted Securities
The Investor realizes that the sale of the Shares hereunder has not
been registered under the Act, that the Shares are characterized under the Act
as "restricted securities," and, therefore, that the Shares cannot be sold or
transferred unless they are subsequently registered under the Act or unless an
exemption from such registration is available. The Investor's financial
condition is such that it is not likely to need to dispose of any of the Shares
in the foreseeable future. In this connection, the Investor represents that it
is familiar with Rule 144 of the Securities and Exchange Commission (the "SEC"),
as presently in effect, and understands the resale limitations imposed thereby
and by the Act.
3
2.9 Exemption Reliance
The Investor has been advised that the Shares are not being registered
under the Act or the applicable state securities laws, but are being offered and
sold pursuant to exemptions from such laws, and that the Company's reliance upon
such exemptions is predicated in part on the Investor's representations
contained herein. The Investor represents that it has not been organized for the
specific purpose of investing in the Shares.
2.10 Further Limitations on Disposition
(a)Without in any way limiting the representations set forth above, the Investor
further agrees not to make any disposition of all or any portion of the Shares,
the shares of the Company's common stock that would be issuable to the Investor
upon conversion of the Shares (the "Conversion Shares" and, together with the
Shares, the "Securities"), unless and until
(i) there is then in effect a registration statement under
the Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(ii) (A) if there is no registration statement under the Act
covering the proposed disposition, the Investor shall have notified the Company
of the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition at least 30
days prior to said disposition and (B) if reasonably requested by the Company,
the Investor shall have furnished the Company with an opinion of counsel (which
opinion may be delivered by the Investor's in-house counsel), reasonably
satisfactory to the Company, that such disposition will not require registration
of such Securities under the Act; or
(iii) the Company shall have been satisfied that such proposed
disposition complies in all respects with SEC Rule 144 or any successor rule
providing a safe harbor for such disposition without registration.
(b) In addition to the foregoing provisions of subsection (a) of this
Section 2.10, if there is then in effect a registration statement under the Act
covering a proposed disposition of any or all of the Securities by the Investor,
then in order to preserve an orderly market for the Company's common stock, (A)
at least five business days prior to any such proposed disposition, the Investor
shall provide to the Company notice of such disposition; (B) the Investor shall
provide the Company or its agent an opportunity to arrange the sale to one or
4
more parties of the Securities proposed to be transferred and shall cooperate
fully with the Company or such agent in such process (including discussions of
the terms of such sale with no more than two brokers designated by the Company
and to sell such Securities to one or both of such brokers if an agreement is
reached); and (C) if, after three business days from the date the notice
referred to in this subsection is received by the Company, an agreement
regarding such a sale has not been reached, the Investor may dispose of such
Securities in any manner it so chooses so long as such disposition is not in
violation of this Agreement.
(c) Notwithstanding the provisions of this Section 2.10, no
registration statement or opinion of counsel shall be necessary for a transfer
by the Investor to any wholly owned subsidiary of the Investor or of Xxxxxxx &
Xxxxxxx which is an accredited investor, if the transferee agrees in writing to
be subject to the terms hereof, to the same extent as if such transferee were
the Investor hereunder. Whenever the restrictions imposed by this Section 2.10
shall terminate as herein provided, the holder of the securities as to which
such restrictions have terminated shall be entitled to receive from the Company,
without expense, one or more new certificates not bearing restrictive legends
and not containing any reference to the restrictions imposed by this Agreement.
2.11 Domicile; Principal Place of Business
The Investor represents that it is domiciled in, and has its principal
place of business in, the jurisdiction set forth in the first paragraph of this
Agreement.
2.12 Legends
It is understood that the certificate evidencing the Shares will bear a
legend as follows:
"The securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended, of
the United States of America (the "Act"), or the securities
laws of any state of the United States of America, and no
interest in such securities may be sold, offered, pledged or
hypothicated in the United States of America, its territories
or possessions, or to a citizen, national, resident or entity
organized or chartered under the laws of the United States of
America, its territories or possessions, unless (i) there is
an effective registration statement under the Act and
applicable state securities laws, (ii) this corporation
receives an opinion of legal counsel for the holders of these
5
securities satisfactory to this corporation stating that such
transaction is exempt from registration under the Act and
applicable state securities laws, or (iii) this corporation
otherwise satisfies itself that such transaction is exempt
from registration."
2.13 Acknowledgment
The Investor, by executing below, acknowledges that it understands that
the Company is relying upon the accuracy and completeness of its representations
and warranties set forth in this Section 2 in deciding whether to sell the
Shares to the Investor and in complying with the Company's obligations under
applicable securities laws.
3. Further Representations and Warranties of the Investor
The Investor hereby represents and warrants to the Company as of the
date of this Agreement as follows:
3.1 Organization and Existence
The Investor is a corporation duly organized, validly existing and in
good standing under the laws of the State of New Jersey and has all requisite
power and authority to enter into and perform this Agreement.
3.2 Authorization
The execution, delivery and performance by the Investor of this
Agreement and the consummation of the transactions contemplated hereby are
within the corporate powers of the Investor and have been duly authorized by all
necessary corporate action on the part of the Investor. This Agreement has been
duly and validly executed and delivered by the Investor and constitutes a legal,
valid and binding agreement of the Investor, enforceable in accordance with its
terms except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (b) the
availability of equitable remedies may be limited by equitable principles of
general applicability.
3.3 Governmental Authorization
No consent, approval or authorization of or designation, declaration or
filing with any governmental authority on the part of the Investor is required
in connection with the valid execution and delivery of this Agreement or the
purchase of the Shares.
6
3.4 Noncontravention
The execution, delivery and performance by the Investor of this
Agreement do not and will not, with or without the passage of time or the giving
of notice or both, (a) contravene or conflict with the articles of incorporation
or bylaws of the Investor; (b) assuming compliance with the matters referred to
in Section 3.3 hereof, contravene or conflict with or constitute a violation of
any provision of any law, regulation, judgment, injunction, order or decree
binding upon or applicable to the Investor; (c) conflict with or result in any
breach of any of the terms, conditions or provisions of, or constitute a default
(or give rise to any right of termination, cancellation or acceleration) under,
or result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of the Investor under any material note,
indenture, mortgage, lease, agreement, contract, purchase order or other
instrument, document or agreement to which the Investor is a party or by which
it or any of its properties or assets is bound or affected.
3.5 Finders' Fees
There is no investment banker, broker, finder or other intermediary who
has been retained by or is authorized to act on behalf of the Investor and who
might be entitled to any fee or commission from the Investor in connection with
the transactions contemplated by this Agreement.
3.6 Financing
The Investor has sufficient funds available to purchase the Shares.
4. Representations and Warranties of the Company
The Company hereby represents and warrants to the Investor as of the
date of this Agreement as follows:
4.1 Corporate Organization
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Washington and is qualified to do
business as a foreign corporation in each jurisdiction where the failure to so
qualify would have a Material Adverse Effect (as defined hereinafter). The
Company has all requisite power and authority to enter into and perform this
Agreement and to own its properties and to carry on its business as now being
conducted.
7
4.2 Corporate Authorization
The execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated hereby are
within the corporate powers of the Company and have been duly authorized by all
necessary corporate action on the part of the Company. This Agreement has been
duly and validly executed and delivered by the Company and constitutes a legal,
valid and binding agreement of the Company, enforceable in accordance with its
terms except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (b) the
availability of equitable remedies may be limited by equitable principles of
general applicability.
4.3 Governmental Authorization
No consent, approval or authorization of or designation, declaration or
filing with any governmental authority on the part of the Company is required
for or in connection with the valid execution and delivery of this Agreement, or
the valid and lawful authorization, issuance, offer, sale and delivery of the
Securities, or the consummation of the transactions contemplated hereunder,
except for the qualification or registration (or taking such action as may be
necessary to secure an exemption from qualification or registration, if
available) of the offer and sale of the Securities under all applicable state
securities laws.
4.4 Noncontravention
The execution, delivery and performance by the Company of this
Agreement do not and will not, with or without the passage of time or the giving
of notice or both, (a) contravene or conflict with the articles of
incorporation, as amended, or bylaws of the Company; (b) assuming compliance
with the matters referred to in Section 4.3 hereof, contravene or conflict with
or constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to the Company; (c)
conflict with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default (or give rise to any right of
termination, cancellation or acceleration) under, or result in the creation of
any lien, security interest, charge or encumbrance upon any of the properties or
assets of the Company under any material note, indenture, mortgage, lease,
agreement, contract, purchase order or other instrument, document or agreement
to which the Company is a party or by which it or any of its properties or
assets is bound or affected. The business of the Company is not being conducted,
and shall not be conducted through the date upon which all the Shares have been
converted into shares of the Company's common stock, in violation of any law,
ordinance or regulation of any governmental entity, except for possible
8
violations which either singularly or in the aggregate do not have a Material
Adverse Effect.
4.5 Authorization and Validity of the Shares
The Shares have been duly authorized and, when issued and delivered to
and paid for by the Investor pursuant to this Agreement, will be validly issued,
fully paid and nonassessable, and such shares are free of preemptive or similar
rights. All outstanding securities of the Company were issued in compliance with
applicable federal and state securities laws. Upon consummation of the
transactions contemplated hereby, good and valid title to the Shares will pass
to the Investor, free and clear of any encumbrances, liens, claims, charges or
assessments of any nature whatsoever. Upon their issuance in accordance with the
Company's Articles of Incorporation, as amended, good and valid title to the
Conversion Shares will pass to the Investor, free and clear of any encumbrances,
liens, claims, charges or assessments of any nature whatsoever. The Preferred
Stock shall have the rights, privileges, and preferences as set forth in the
Amendment to the Company's Articles of Incorporation (the "Amendment") in the
form attached to this Agreement as Exhibit B.
4.6 Capitalization
As of the date hereof, the authorized capital stock of the Company
consists of (i) 60,000,000 shares of Common Stock of which 17,293,519 shares are
outstanding, and (ii) 3,000,000 shares of Preferred Stock, of which 600,000
shares have been designated Series A Junior Participating Preferred Stock, of
which none are outstanding; 1,120,000 shares have been designated as $2.4375
Convertible Exchangeable Preferred Stock, Series 1, of which 208,240 are
outstanding; 50,000 shares have been designated as Series 2 Convertible
Preferred Stock, of which 5,167 are outstanding; and 120,000 shares have been
designated as Series 3 Convertible Preferred Stock, of which 118,780 are
outstanding. All such outstanding shares have been validly issued and are fully
paid and nonassessable. The Company has reserved 1,000 shares of Preferred Stock
for issuance hereunder. The Company has, and at all times shall have, authorized
and reserved for issuance a sufficient number of shares of the Company's common
stock as necessary to provide for the conversion of the Shares and the Dividend
Shares. The Conversion Shares will, upon issuance in accordance with the terms
of the Company's Articles of Incorporation, as amended, be duly authorized,
validly issued and outstanding, fully paid and nonassessable, and the
certificates representing the same will be duly and validly authorized, executed
and delivered by the Company.
9
4.7 Nasdaq National Market; Listing
The Company's common stock is quoted on the Nasdaq National Market and
the Company is in compliance with the applicable provisions of Schedule D to the
By-laws of the National Association of Securities Dealers, Inc.
4.8 Finders' Fees
There is no investment banker, broker, finder or other intermediary who
has been retained by or is authorized to act on behalf of the Company and who
might be entitled to any fee or commission from the Company in connection with
the transactions contemplated by this Agreement.
4.9 Financial Statements
Each of the audited consolidated balance sheets and statements of
operations and cash flow for the Company contained in the Public Reports (as
defined below) (collectively, the "Financial Statements") are in accordance with
the books and records of the Company, have been prepared in accordance with
generally accepted accounting principles, consistently applied, and fairly
present, in all material respects, the financial position, results of operations
and cash flows of the Company as of each such date and for each of the periods
covered thereby, except that such summary statements are subject to normal
year-end adjustments.
4.10 Absence of Undisclosed Liabilities
Except as and to the extent reflected or stated in the Financial
Statements, the Company has no debts, liabilities or obligations of any nature,
whether accrued, absolute, assigned or otherwise, whether due or to become due,
other than incurred in the ordinary course of business.
4.11 Absence of Certain Developments
Since June 30, 1997, except as disclosed in the Financial Statements
and except for continuing operating losses, there has been no (i) change which
may result in a material adverse effect on the condition, financial or
otherwise, of the Company or its assets, liabilities, properties, business,
operations, condition or prospects generally (a "Material Adverse Effect"), (ii)
declaration, setting aside or payment of any dividend or other distribution with
respect to the capital stock of the Company except dividends set aside or paid
by the Company with respect to Convertible Exchangeable Preferred Stock, Series
1, Series 2 Convertible Preferred Stock or Series 3 Convertible Preferred Stock,
or (iii) loss, destruction or damage to any property of the Company, whether or
not insured, which has or may have a Material Adverse Effect.
10
4.12 Litigation
Except as disclosed in the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997, there is no claim, arbitration, action, suit,
proceeding or investigation pending, or to the best knowledge of the Company,
threatened against the Company, which questions the validity of this Agreement
or any other agreement entered into by the Company in connection with this
Agreement or the right of the Company to enter into any such agreements or to
consummate the transactions contemplated hereby or thereby, or which might
result, in a Material Adverse Effect, or any change in the current equity
ownership of the Company. The Company is not a party to, or subject to the
provisions of, any order, writ, injunction, judgment or decree of any court or
governmental agency or instrumentality which would have a Material Adverse
Effect.
4.13 Insurance
The Company maintains in full force such types and amounts of insurance
issued by issuers of recognized responsibility insuring the Company, with
respect to its liability, workers' compensation, business and properties, in
such amounts and against such losses and risks as are customary in the case of
corporations engaged in businesses and having circumstances similar to that of
the Company.
4.14 Environmental and Safety Laws
To the best of its knowledge, the Company is in compliance with every
applicable statute, law or regulation relating to the environment or
occupational health and safety, except where the failure to so comply would not
individually or in the aggregate have a Material Adverse Effect, and, to the
best of the Company's knowledge, no material expenditures are required in order
to comply with any such existing statute, law or regulation.
4.15 Securities Laws
Assuming that the Investor's representations and warranties contained
in Section 2 of this Agreement are and continue to be true and correct, the
offer, issuance and sale to the Investor of the Shares and the Conversion Shares
are and will be exempt from the registration and prospectus delivery
requirements of the Act, and have been registered or qualified (or are exempt
from registration and qualification) under the registration, permit or
qualification requirements of all applicable state securities laws.
11
5. Public Reports
The Company has provided to the Investor true and complete copies of
all reports, schedules, forms, statements and other documents (the "Public
Reports") filed by the Company with the SEC under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), since December 31, 1993. The Public
Reports include all the reports the Company has been required to file under the
Exchange Act since that date. As of their respective dates, (i) the Public
Reports complied in all material respects with the requirements of the Exchange
Act and the rules and regulations promulgated thereunder, and (ii) none of the
Public Reports contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading.
6. [Intentionally deleted.]
7. Registration Rights
7.1 Certain Definitions
As used in this Section 7, the following terms shall have the following
respective meanings:
(a) "Form S-3" shall mean Form S-3 issued by the SEC or any sub-
stantially similar form then in effect.
(b) "Holder" shall mean the Investor.
(c) "Milestone Date" shall mean the date upon which Xxxxxxx shall have
made payment to the Company of the amount specified in Section 4.2(b) of the
License Agreement.
(d) "Register," "Registered" and "Registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act (the "Registration Statement") and pursuant to Rule 415
under the Act or any successor rule providing for offering securities on a
continual basis, and the declaration or ordering of the effectiveness of such
Registration Statement.
(e) "Registrable Securities" shall mean the Conversion Shares.
12
(f) "Registration Expenses" shall mean all expenses incurred by the
Company in complying with this Section 7, including, without limitation, all
federal and state registration, qualification and filing fees, printing
expenses, fees and disbursements of counsel for the Company, Blue Sky fees and
expenses, and the expense of any special audits incident to or required by any
such registration.
(g) "Restriction Termination Date" shall mean, with respect to any
Registrable Securities, the earliest of (i) the date that such Registrable
Securities shall have been Registered and sold or otherwise disposed of in
accordance with the intended method of distribution by the seller or sellers
thereof set forth in the Registration Statement covering such Registrable
Securities or transferred in compliance with SEC Rule 144, (ii) the date that an
opinion of counsel to the Company which counsel shall be reasonably acceptable
to the Holder containing reasonable assumptions shall have been rendered and,
based upon such opinion, the legend referred to in Section 2.12 hereof shall
have been removed, and (iii) the second anniversary of the date of this
Agreement.
(h) "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities pursuant to
this Agreement and all fees and disbursements of counsel for the Holder.
7.2 Request for Registration
(a) Upon the terms and subject to the conditions of this Section 7, at
any time within the period commencing on the earlier of (i) the Milestone Date
and (ii) 12 months from the date of this Agreement and ending on the Restriction
Termination Date, the Holder may, from time to time during such registration
period, request the Company in writing to effect a Registration on any form for
which the Company then qualifies and which counsel for the Company shall deem
appropriate and available for an offering of Registrable Securities. The Company
will promptly give notice of the proposed Registration to the Holder and, as
soon as practicable after receipt of such notice, the Company shall proceed to
file a Registration Statement covering all of the Registrable Securities to be
registered thereunder in accordance with the intended method of distribution
which the Holder requests to be registered within 15 days after mailing of
notice by the Company. The Company shall exercise its best efforts to cause such
Registration Statement to be declared effective by the SEC as soon as possible
after such filing and in any event within 90 days of the date of filing such
Registration Statement, although the Company cannot assure that such
Registration Statement will in fact be declared effective by the SEC within such
90 day period. The Registration Statement (and each amendment or supplement
thereto) shall 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 in which they were made, not
13
misleading. The Company hereby agrees to file in a timely manner all reports
required under the Exchange Act during the registration period. The Company
shall be obligated to effect only one Registration pursuant to this Agreement.
(b) Notwithstanding the foregoing,
(i) the Company shall not be obligated to effect a
Registration pursuant to this Section 7.2 during the period starting with the
date 30 days prior to the Company's good faith estimated date of filing of, and
ending on the earlier of (A) the date which is 90 days after the effective date
of, and (B) the date which is 150 days after the filing of, a Registration
Statement pertaining to an underwritten public offering of securities for the
account of the Company, provided that the Company diligently pursues such
Registration; and
(ii) the Company shall not be obligated to register any
Registrable Securities, if, in the reasonable opinion of its counsel, all
Registrable Securities may be sold in the open market within a 90-day period
under SEC Rule 144 without registration under the Act.
7.3 Blue Sky
In the event of any Registration pursuant to this Section 7, the
Company will exercise its best efforts to Register and qualify the Registrable
Securities covered by the Registration Statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holder for the distribution of such securities; provided, however, that the
Company shall not be required (a) if the Company is listed on the Nasdaq
National Market, to register or qualify in any states or jurisdictions, except
New York, that do not have a Nasdaq National Market securities exemption from
registration and qualification, and (b) to qualify to do business, to file a
general consent to service of process or to subject itself to taxation in any
state or jurisdiction in which it is not now qualified. The Company will furnish
to the Holder written advice of its counsel with respect to registration or
exemption of such Registrable Securities in such jurisdictions.
7.4 Expenses of Registration
All Registration Expenses shall be borne by the Company and all Selling
Expenses shall be borne by the Holder of the Registrable Securities.
14
7.5 Registration Procedures
7.5.1 Advice by Company
The Company will keep the Holder advised as to the initiation and
completion of such Registration. The Company, if requested by the Holder, will
furnish to the Holder, prior to filing with the SEC, a copy of the Registration
Statement proposed to be so filed. The Company will (a) use all reasonable
efforts to keep such Registration effective until (i) in the case of a
Registration on Form S-3, the earlier of (A) the date on which the Holder has
completed the distribution described in the Registration Statement, and (B) two
years from the date of this Agreement, or (ii) in the case of a Registration on
any form other than Form S-3, 120 days from the effective date of the
Registration Statement and (b) furnish (i) promptly after the same is prepared
and distributed, filed with the SEC, or received by the Company, one copy of the
Registration Statement and each amendment and supplement thereto, and (ii) such
number of prospectuses (including a preliminary prospectus, and all amendments
and supplements thereto) and such other documents as the Holder from time to
time may reasonably request.
7.5.2 Amendments
The Company will promptly prepare and file with the SEC such amendments
and prospectus supplements, including post-effective amendments, to the
Registration Statement as may be necessary or appropriate, and use its best
efforts to have such post-effective amendments declared effective as promptly as
practicable; cause the related prospectus to be supplemented by any prospectus
supplement, and as so supplemented, to be filed with the SEC; and notify the
Holders of any securities included in such Registration Statement and the
underwriter thereof, if any, promptly when a prospectus or any prospectus
supplement or post-effective amendment must be filed or has been filed and, with
respect to any post-effective amendment, when the same has become effective, and
make the same available to the Holder and any underwriter.
7.5.3 Other Agreements and Actions
The Company will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the sale of such
Registrable Securities.
15
7.5.4 Listing of Securities
The Company will use all reasonable efforts to (i) cause all such
Registrable Securities to be listed on each securities exchange on which similar
securities issued by the Company are then listed, or (ii) secure designation and
quotation of all such Registrable Securities on the Nasdaq National Market
System or, if despite the Company's best efforts to satisfy the preceding clause
(i) or (ii), the Company is unsuccessful is satisfying the preceding clause (i)
or (ii), to secure listing on a national securities exchange or Nasdaq
authorization and quotation for such securities and, without limiting the
generality of the foregoing, to arrange for at least two market makers to
register with the National Association of Security Dealers, Inc. as such with
respect to such Registrable Securities.
7.5.5 Piggyback Registration
If the Company proposes to file a Registration Statement under the Act
with respect to an underwritten offering of the Company's common stock at any
time within the period commencing one year from the date of this Agreement and
ending on the earlier of (a) the second anniversary of the date of this
Agreement and (b) the date of a request pursuant to Section 7.2 hereof to effect
a Registration (i) for the Company's own account (other than a Registration
Statement on Form S-4 or Form S-8 (or any similar or substitute form that may be
adopted by the SEC)) or (ii) for the account of any of its holders of common
stock, then the Company shall give written notice of such proposed filing to the
Holder as soon as practicable (but in no event less than 10 business days before
the anticipated filing date), and such notice shall offer the Holder the
opportunity to Register such number of shares of Registrable Securities as the
Holder may request on the same terms and conditions as the Company's common
stock. If the Company proposes to file a Registration Statement under the Act on
Form S-4 to effect an offer to existing shareholders to exchange the Company's
common stock not registered under the Act for common stock registered under the
Act (other than pursuant to this Section 7), the Company shall offer the Holder
the opportunity to exchange its Registrable Securities for common stock in such
offer on the same terms and conditions as the Company's other shareholders. If
the Holder exchanges Registrable Securities for the Company's common stock in
such offer, such common stock shall not be deemed Registrable Securities. The
Company shall not be required under this Section 7.5.5 to Register any of the
Holder's securities in connection with an underwritten offering of the Company's
securities unless the Holder accepts the terms of the underwriting as agreed
upon between the Company and the underwriters selected by it, and then only in
such quantity as will not, in the opinion of the managing underwriters,
interfere with the successful marketing of the offering by the Company. If the
16
managing underwriters advise that the inclusion in such registration of all
Registrable Securities and securities held by other holders ("Other Piggyback
Securities") requested to be registered would interfere with the successful
marketing of securities that the Company proposes to offer for its own account,
then all securities for sale by the Company shall first be included and the
number of Registrable Securities and Other Piggyback Securities to be registered
shall be reduced pro rata among all holders thereof in proportion to the voting
rights of all outstanding shares held by such holders.
7.6 Information Furnished by the Holder
It shall be a condition precedent to the Company's obligations under
this Agreement that the Holder furnish to the Company in writing such
information regarding the Holder and the distribution proposed by it as the
Company may reasonably request.
7.7 Indemnification
7.7.1 Company's Indemnification of the Holder
The Company will indemnify and hold harmless the Holder, each person
who controls the Holder (within the meaning of the Act) and each of their
officers, directors and constituent partners, with respect to which
Registration, qualification or compliance of Registrable Securities has been
effected pursuant to this Agreement, against all claims, losses, damages or
liabilities (or actions with respect thereto) to the extent such claims, losses,
damages, liabilities or actions arise out of or are based upon any untrue
statement (or alleged untrue statement) of a material fact contained in any
prospectus or any related Registration Statement incident to any such
Registration, qualification or compliance, or any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or any violation by the Company of
any rule or regulation promulgated under the Act applicable to the Company and
relating to action or inaction required of the Company in connection with any
such Registration; and the Company will reimburse the Holder and each person who
controls the Holder for any legal and other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action; provided, however, that the indemnity contained in this
Section 7.7.1 shall not apply to amounts paid in settlement of any such claim,
loss, damage, liability or action if settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld or delayed);
and provided, further, that the Company will not be liable in any such case to
the extent that any such claim, loss, damage, liability or action arises out of
17
or is based upon any untrue statement or omission based upon written information
furnished to the Company by the Holder or controlling person for use in
connection with the offering of securities of the Company. Notwithstanding the
above, the foregoing indemnity agreement is subject to the condition that,
insofar as it relates to any such untrue statement, alleged untrue statement,
omission or alleged omission made in a preliminary prospectus, such indemnity
agreement shall not inure to the benefit of the Holder if a copy of the final
prospectus was not furnished to the person asserting the loss, liability, claim
or damage at or prior to the time such action is required by the Act and if the
final prospectus corrected the untrue statement or omission or alleged untrue
statement or omission.
7.7.2 Holder's Indemnification of Company
The Holder will, if Registrable Securities held by the Holder are
included in the securities as to which a Registration is being effected pursuant
to this Agreement, indemnify and hold harmless the Company, each of its officers
and directors and each person who controls the Company within the meaning of the
Act against all claims, losses, damages and liabilities (or actions with respect
thereto) arising out of or based upon any untrue statement (or alleged untrue
statement) of a material fact contained in any such Registration Statement or
related prospectus, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Holder will reimburse the Company and such
directors, officers, partners, persons or control persons for any legal and
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such Registration Statement or
prospectus in reliance upon and in conformity with written information furnished
to the Company by the Holder and stated to be specifically for use in connection
with the offering of Securities of the Company; provided, however, that the
indemnity contained in this Section 7.7.2 shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if settlement is
effected without the consent of the Holder (which consent shall not be
unreasonably withheld or delayed).
7.7.3 Indemnification Procedure
Promptly after receipt by an indemnified party under this Section 7.7
of notice of the commencement of any action, such indemnified party will, if a
claim with respect thereto is to be made against an indemnifying party under
this Section 7.7, notify the indemnifying party in writing of the commencement
thereof and generally summarize such action. The indemnifying party shall have
the right to participate in and to assume the defense of such claim, and shall
18
be entitled to select counsel for the defense of such claim with the approval of
any parties entitled to indemnification, which approval shall not be
unreasonably withheld. Notwithstanding the foregoing, the party entitled to
indemnification shall have the right to employ separate counsel (reasonably
satisfactory to the indemnifying party) to participate in the defense thereof,
but the fees and expenses of such counsel shall be the expense of such
indemnified party unless the named parties to such action or proceedings include
both the indemnifying party and the indemnified party and the indemnifying party
or such indemnified party shall have been advised by counsel that there are one
or more legal defenses available to it which are different from or additional to
those available to the indemnifying party (in which case, if the indemnified
party notifies the indemnifying party in writing that it elects to employ
separate counsel at the reasonable expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
or proceeding on behalf of the indemnified party, as the case may be, it being
understood, however, that the indemnifying party shall not, in connection with
any such action or proceeding or separate or substantially similar or related
action or proceeding in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate counsel at any time for the indemnifying party and all
indemnified parties, which counsel shall be designated in writing by the
Holder). If the indemnifying party withholds consent to a settlement or proposed
settlement by the indemnified party, it shall acknowledge to the indemnified
party its indemnification obligations hereunder.
7.7.4 Contribution
If the indemnification provided for in this Section 7.7 from an
indemnifying party is unavailable to an indemnified party hereunder with respect
to any claims, losses, damages, liabilities and actions referred to herein, then
the indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the statements or omissions which result in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such indemnifying party or indemnified party and that party's
relative intent, knowledge, access to information supplied by such indemnifying
party or indemnified party and opportunity to correct or prevent such statement
19
or omission. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action, suit, proceeding or
claim.
7.8 Transfer of Rights
The right to cause the Company to Register Registrable Securities
granted by the Company to the Holder under this Section 7 may not be assigned to
any other person except a permitted transferee described in Section 2.10(c)
hereof.
7.9 No-Action Letter or Opinion of Counsel in Lieu of Registration
Notwithstanding anything else in this Agreement, if the Company shall
have obtained from the SEC a "no-action" letter in which the SEC has indicated
that it will take no action if, without Registration under the Act, the Holder
disposes of Registrable Securities covered by any request for Registration made
under this Section 7 in the specific manner in which the Holder proposes to
dispose of the Registrable Securities included in such request (such as
including, without limitation, inclusion of such Registrable Securities in an
underwriting initiated by either the Company or the Holder), or if in the
opinion of counsel for the Company concurred in by counsel for the Holder, which
concurrence shall not be unreasonably withheld, no Registration under the Act is
required in connection with such disposition, the Registrable Securities
included in such request shall not be eligible for Registration under this
Agreement; provided, however, that any Registrable Securities not so disposed of
shall be eligible for Registration in accordance with the terms of this
Agreement with respect to other proposed dispositions to which this Section 7.9
does not apply.
8. Miscellaneous
8.1 Notices
All notices, requests and other communications to either party
hereunder shall be in writing (including telex, telecopy or similar writing) and
shall be given,
20
if to the Company, to:
NeoRx Corporation
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Fax: (000) 000-0000
Attn: President
if to the Investor, to:
Xxxxxxx & Xxxxxxx Development Corporation
Xxx Xxxxxxx & Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attn: President
with a copy to:
Office of General Counsel
Xxxxxxx & Xxxxxxx
Xxx Xxxxxxx & Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
8.2 Amendments; No Waivers
(a) Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by the Investor and the Company or, in the case of a waiver, by the
party against whom the waiver is to be effective.
(b) No failure or delay by either party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
8.3 Expenses
All costs and expenses incurred in connection with this Agreement shall
be paid by the party incurring such cost or expense, except as provided in
Section 7 hereof with respect to Registration Expenses.
21
8.4 Successors and Assigns
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns; provided that, except as set forth in Section 2.10(c) hereof, neither
party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the other party hereto.
8.5 Governing Law
The Investor agrees that this Agreement shall be enforced, governed and
construed in all respects in accordance with the laws of the State of
Washington, and that the rights, powers and duties set forth herein shall be
binding upon the Investor and its successors and permitted assigns, and shall
inure to the benefit of its successors and permitted assigns.
8.6 Counterparts; Effectiveness
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall become effective
when each party hereto shall have received a counterpart hereof signed by the
other party hereto.
8.7 Entire Agreement
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements,
understandings and negotiations, both written and oral, between the parties with
respect to the subject matter of this Agreement. No representation, inducement,
promise, understanding, condition or warranty not set forth herein has been made
or relied upon by either party hereto. Neither this Agreement nor any provision
hereof is intended to confer upon any person other than the parties hereto any
rights or remedies hereunder.
8.8 Captions
The captions herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof.
22
8.9 Survival
Notwithstanding any investigation made by any party to this Agreement,
all covenants, agreements, representations and warranties made by the Company
and the Investor herein and in the certificates for the Shares delivered
pursuant hereto shall survive the execution of this Agreement, the delivery to
the Investor of the Shares being purchased and the payment therefor.
8.10 Lock-Up Agreement
The Investor agrees that, if requested by the Company in conjunction
with an underwritten public offering, the Investor will enter into a written
agreement that it will not, directly or indirectly, offer, sell, contract to
sell, grant any option to purchase, make any short sale, pledge or grant any
interest in, or otherwise dispose of, transfer or make a distribution of any
shares of the Company's common stock for a period of 180 days after the date
such public offering is declared effective by the SEC; provided that the Company
may only "lock up" the Investor twice pursuant to this Section 8.10 so long as
more than 364 days have elapsed between the first and second requests for "lock
ups"; and, provided further, that all officers and directors of the Company and
all other persons with registration rights enter into arrangements with the
Company substantially similar to the provisions of this Section 8.10.
8.11 Publicity
Neither party shall originate any publicity, news release or other
public announcement, written or oral, containing the name of the other party
(or, in the case of any publicity, news release or other public announcement
originated by the Company, any reference to Xxxxxxx & Xxxxxxx or any wholly
owned subsidiary or affiliate thereof) relating to the performance under this
Agreement or the existence of any arrangement between the Company and the
Investor, without the prior written consent of the other party (which consent
shall be deemed to have been given if the party being requested to consent fails
to respond within three (3) business days of receipt of a written request
therefor), except where such publicity, news release or other public
announcement is required by law; provided that in such event, the Investor shall
be consulted by the Company in connection with any such publicity, news release
or other public announcement prior to its release and shall be provided with a
copy thereof.
23
8.12 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 Agreement and the consummation of the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
NEORX CORPORATION
/s/ Xxxxxxx X. Xxxxxxxx
------------------------
By Xxxxxxx X. Xxxxxxxx
Its Senior Vice President
XXXXXXX & XXXXXXX DEVELOPMENT CORPORATION
/s/ Ting Pau Oei
-------------------------
By Ting Pau Oei
Its Vice President
24
