EXHIBIT 99.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of
April __, 1999 between Vion Pharmaceuticals, Inc., a Delaware corporation with
offices at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"); and the
other parties hereto listed on the signature pages hereof (each an "Investor"
and collectively the "Investors").
W I T N E S S E T H:
--------------------
WHEREAS, pursuant to that certain Common Stock Investment Agreement by
and between the Company and the Investors (the "Investment Agreement"), the
Company has agreed to sell and issue to the Investors, and the Investors have
agreed to purchase from the Company, an aggregate of _______ shares, par value
$0.01, of the Company's Common Stock (the "Shares") on the terms and conditions
set forth therein; and
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investors' agreement to enter into the Investment Agreement, the Company has
agreed to provide the Investors with certain registration rights with respect to
the Shares and certain other rights and remedies with respect to the Shares as
set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the
Investment Agreement and this Agreement, the Company and the Investors agree as
follows:
1. Certain Definitions. Capitalized terms used herein and not otherwise
defined shall have the meaning ascribed thereto in the Investment Agreement. As
used in this Agreement, the following terms shall have the following respective
meanings:
"Closing" and "Closing Date" shall have the meanings ascribed to such
terms in the Investment Agreement.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Company's Common Stock, $.01 par value.
"Holder" and "Holders" shall include an Investor or the Investors,
respectively, and any transferee of the Shares or Registrable Securities which
have not been sold to the public to whom the registration rights conferred by
this Agreement have been transferred in compliance with this Agreement.
"Registrable Securities" shall mean: (i) the Shares issued to each
Holder or its permitted transferee or designee; and (ii) any other security
issued as (A) a dividend or other distribution with respect to, or (B) in
exchange for or in replacement of, Registrable Securities.
"Registration Expenses" shall mean all expenses to be incurred by the
Company in connection with each Holder's registration rights under this
Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, reasonable fees and disbursements of counsel to Holders
(using a single counsel selected by a majority-in-interest of the Holders) for a
"due diligence" examination of the Company and review of the Registration
Statement and related documents, and the expense of any special audits incident
to or required by any such registration (but excluding the compensation of
regular employees of the Company, which shall be paid in any event by the
Company).
The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registration Statement" shall have the meaning set forth in Section
2(a) herein.
"Regulation D" shall mean Regulation D as promulgated pursuant to the
Securities Act, and as subsequently amended.
"Securities Act" or "Act" shall mean the Securities Act of 1933, as
amended.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for Holders not included within "Registration
Expenses."
2. Registration Requirements.
The Company shall use its best efforts to effect the registration for
resale of the Registrable Securities (including without limitation the execution
of an undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act) as would
permit or facilitate the sale or distribution of all the Registrable Securities
in the manner (including manner of sale) and in all states reasonably requested
by the Holder. Such best efforts by the Company shall include the following:
(a) The Company shall, as expeditiously as reasonably possible after
the Closing Date:
(i) No later than sixty (60) days following the Closing Date,
prepare and file a registration statement with the Commission pursuant
to Rule 415 under the Securities Act on Form S-3 under the Securities
Act (or in the event that the Company is ineligible to use such form,
such other form as the Company is eligible to use under the Securities
Act) covering the resale of the Registrable Securities ("Registration
Statement"). Thereafter, the Company shall use its best efforts to
cause such Registration Statement and other filings to be declared
effective prior to the end of the period
2
terminating one hundred twenty (120) days following the Closing Date
(as the same may be extended as provided in the next sentence, the
"Registration Deadline"). Notwithstanding the foregoing, if prior to
such 120th day the Company actively proceeds to effectuate a bona fide
underwritten offering of Common Stock with one or more reputable
underwriters (as evidenced by, inter alia, Board adoption and approval
of such process), the ----- ---- 120-day period may, at the Company's
option on written notice, be tolled in accordance with the following
terms:
(1) The Company shall use its best efforts
to have the Shares included in such underwritten
offering.
(2) Subject to the next sentence, the period
of tolling ("Tolling Period") shall not continue
beyond September 15, 1999 and shall also expire upon
the (A) the date the Company determines to abandon
the proposed offering; or (B) the date of
consummation of the proposed offering.
Notwithstanding the foregoing, the Tolling Period may
extend beyond the date of the consummation of the
offering and beyond September 15, 1999 as to those
Holders who have executed a lockup agreement ("Lockup
Agreement") with the underwriter(s), in which case
the Registration Deadline shall be, with respect to
such Holders, the day after the expiration of the
applicable lockup period. [Agreement with ▇▇▇▇▇▇▇
Associates, L.P. and Westgate International, L.P.
only: If requested by the underwriter(s) and provided
that the directors and executive officers of the
Company also execute Lockup Agreements, each Holder
agrees to execute a Lockup Agreement pursuant to
which such Holder shall agree not to sell such
Holder's Registrable Securities for such period, and
subject to such other terms and conditions, which are
no more restrictive than the least restrictive Lockup
Agreement executed by a director or executive officer
in connection with such underwritten offering. No
such Lockup Agreement required to be executed by a
Holder shall contain terms and conditions which are
not reasonable.]
(3) After the expiration of the Tolling
Period, the 120-day period shall again start to run,
provided that in any case where the Holders did not
execute a Lockup Agreement and the Company did not
reasonably believe that the Shares would in fact be
included in the proposed underwritten offering, the
Company shall have only an additional fifteen (15)
calendar days to effect such registration following
the expiration of the Tolling Period.
(ii) The Company shall provide Holders a reasonable
opportunity to review any such Registration Statement or amendment or
supplement thereto prior to filing, and Holders shall use their best
efforts to complete such review in a timely fashion. The Registration
Statement may also include shares of Common Stock being offered by the
Company and also shares of Common Stock being offered by purchasers in
the [Agreements with ▇▇▇▇▇▇▇ Associates, L.P. and Westgage
International, L.P. and Kleinwort ▇▇▇▇▇▇ Limited and Winchester Capital
Healthcare Partners, LLC only:
3
Companion Offering] [Agreements with Wechsler & Co., Inc. and United
Equities Commodities Company only: First Companion Offering and any
Other Companion Offerings].
(iii) Prepare and file with the Commission such
amendments and supplements to such Registration Statement and the
prospectus used in connection with such Registration Statement as may
be necessary to comply with the provisions of the Act with respect to
the disposition of all securities covered by such Registration
Statement and notify the Holders of the filing and effectiveness of
such Registration Statement and any amendments or supplements.
(iv) Furnish to each Holder such numbers of copies of
a current prospectus conforming with the requirements of the Act,
copies of the Registration Statement, any amendment or supplement
thereto and any documents incorporated by reference therein and such
other documents as such Holder may reasonably require in order to
facilitate the disposition of Registrable Securities owned by such
Holder.
(v) Use its best efforts to register and qualify the
securities covered by such Registration Statement under such other
securities or "Blue Sky" laws of such jurisdictions as shall be
reasonably requested by each Holder; provided that the Company shall
not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
(vi) Notify each Holder immediately of the happening
of any event as a result of which the prospectus (including any
supplements thereto or thereof) included in such Registration
Statement, as then in effect, includes an untrue statement of material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and use its best efforts to promptly
update and/or correct such prospectus.
(vii) Notify each Holder immediately of the issuance
by the Commission or any state securities commission or agency of any
stop order suspending the effectiveness of the Registration Statement
or the initiation of any proceedings for that purpose. The Company
shall use its best efforts to prevent the issuance of any stop order
and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible time.
(viii) Provide the Holders with prompt written notice
of the date that a Registration Statement is declared effective by the
Commission, and the date or dates when the Registration Statement is no
longer effective.
(ix) Permit a single firm of counsel, designated as
Holders' counsel by a majority of the Registrable Securities included
in the Registration Statement, to review the Registration Statement and
all amendments and supplements thereto within a reasonable period of
time prior to each filing, and shall not file any document in a form to
which such counsel reasonably objects.
4
(x) Use its best efforts to list the Registrable
Securities covered by such Registration Statement with all securities
exchange(s) and/or markets on which the Common Stock is then listed and
prepare and file any required filings with the National Association of
Securities Dealers, Inc. or any exchange or market where the Shares are
traded.
(xi) Take all steps necessary to enable Holders to
avail themselves of the prospectus delivery mechanism set forth in Rule
153 (or successor thereto) under the Act.
(b) Set forth below in this Section 2(b) are (I) events that may arise
that the Investors consider will interfere with the full enjoyment of their
rights under this Agreement (the "Interfering Events"), and (II) the remedies
applicable in each of these events.
Clauses (i) through (iii) of this Section 2(b) describe the Interfering
Events and provide a remedy to the Holders if an Interfering Event occurs.
As used in clauses (i) through (iii) of this Section 2(b), "Liquidated
Damages" shall mean a sum equal to 3% of the amount of each Holder's investment
in the Shares for each 30-day period (or portion thereof) during which such
Interfering Event continues.
Paragraph (iv) provides, inter alia, that if cash payments required as
the remedy in the case of certain of the Interfering Events are not paid when
due, the Company may be required by the Investors to repurchase outstanding
Shares at a specified price.
(i) Delay in Effectiveness of Registration Statement.
The Company agrees that subject to Section 2(a)(i) it shall file the
Registration Statement complying with the requirements of this
Agreement promptly following the Closing Date and shall use its best
efforts to cause such Registration Statement to become effective not
later than the Registration Deadline. In the event that such
Registration Statement has not been declared effective by the
Registration Deadline, then the Company shall pay Liquidated Damages
("Liquidated Damages") to the Holders on a pro rata basis.
(ii) No Listing. In the event that the Company fails,
refuses or is unable to cause the Registrable Securities covered by the
Registration Statement to be listed with the Nasdaq Stock Market
("NASDAQ"), the New York Stock Exchange or the American Stock Exchange
and, in addition, such other principal securities exchange(s) and
markets on which the Common Stock is then traded at all times during
the period ("Listing Period") from and after the Registration Deadline,
the Company shall immediately notify each Holder of such event, and the
Company shall pay to the Holders on a pro rata basis the Liquidated
Damages.
(iii) Blackout Periods. In the event any Holder's
ability to sell Registrable Securities under the Registration Statement
is suspended for more than ninety (90) days in any twelve-month period,
including without limitation by reason of any suspension or stop order
with respect to the Registration Statement or the fact that an event
has occurred as a result of which the prospectus (including any
supplements
5
thereto) included in such Registration Statement then in effect
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing, the Company shall pay Liquidated Damages to the Holders on a
pro rata basis for the period during which such delay continues after
such ninetieth day; provided that such period may be extended for more
than ninety (90) days, but in no event beyond forty-five (45) days, and
no Liquidated Damages or Premium Redemption Price under Section (iv)(B)
below shall be due or payable if the suspension of a Holder's ability
to sell Registrable Securities under the Registration Statement is due
to the existence of facts relating to developments with respect to the
regulatory approval process for the Company's products, including the
FDA approval process, as a result of which the prospectus (including
any supplements thereto) included in such Registration Statement then
in effect includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances then existing. Unless the Company has a valid business
purpose for preserving the confidentiality of material non-public
information for most or all of such 90-day period, the Company must
amend the Registration Statement so as to be current as soon as
practicable, and no such delay shall exceed ninety (90) days.
(iv) Premium Price Redemption for Defaults.
(A) The Company acknowledges that any failure,
refusal or inability by the Company described in the foregoing
clauses (i) through (iii) will cause the Holders to suffer damages
in an amount that will be difficult to ascertain, including without
limitation damages resulting from the loss of liquidity in the
Registrable Securities and the additional investment risk in
holding the Registrable Securities, whether or not such Holders
ultimately achieve a positive return on investment. Accordingly,
the parties agree that it is appropriate to include in this
Agreement the foregoing provisions for default payments in order to
compensate the Holders for such damages. The parties acknowledge
and agree that the default payments set forth above represent the
parties' good faith effort to quantify such damages and, as such,
agree that the form and amount of such default payments are
reasonable and will not constitute a penalty. The default payments
provided for above (and redemption rights set forth above and
below) shall constitute the sole and exclusive damage remedy for
monetary losses incurred by the Holders as a result of the
applicable breach(es) by the Company, but only to the extent any
such breach is unintentional; otherwise such default payments shall
be in addition to and not in lieu or limitation of any other rights
the Holders may have at law, in equity or under the terms of the
Investment Agreement or this Agreement, including without
limitation the right to specific performance.
(B) Each Liquidated Damages or other default
payment provided for in the foregoing clauses (i) through (iii)
shall be in addition to each other default payment; provided,
however, that in no event shall the Company be obligated to pay to
any Holder default payments for any one month in an
6
aggregate amount greater than three percent (3%) of the amount
invested by such Holder in Shares. All default payments required to
be made in connection with the above provisions shall be paid in
cash by the tenth (10th) day of each calendar month (which payments
shall be pro rated on a per diem basis for any period of less than
30 days). In the event that the Company fails or refuses to pay any
default payment when due, at any Holder's request and option the
Company shall purchase all or a portion of the Shares held by such
Holder (with any default payments accruing through the date of such
purchase), within five (5) days of such request, at a purchase
price per share equal to the Premium Redemption Price (as defined
below), provided that such Holder may revoke such request at any
time prior to receipt of such payment of such purchase price. The
Premium Redemption Price equals 1.1 times the original purchase
price of each Share. Default payments shall no longer accrue on
Shares after such Shares have been redeemed by the Company pursuant
to the foregoing provision. Notwithstanding the proviso contained
in the first sentence of this paragraph (B), during any period
after which the Company was obligated to redeem Shares but failed
to do so, the overdue Premium Redemption Price shall itself bear
interest payable in cash monthly at the rate of three (3%) per
month, and during such period the Holder shall be entitled to
specific performance at any time.
(c) If the Holder(s) intend to distribute the Registrable Securities by
means of an underwriting, the Holder(s) shall so advise the Company. Any such
underwriting may only be administered by investment bankers reasonably
satisfactory to the Company. The Company shall only be obligated to permit one
underwritten offering, which offering shall be determined by a two-thirds (2/3)
majority-in-interest of the Holders, and the Company need not permit any such
underwritten offering while the resale of the Shares is otherwise subject to an
effective registration statement. In the event that there is a cutback in
connection with such an offering, such cutback shall be pro rata among the
Investors and any shareholders with registration rights arising prior to the
date of this Agreement.
(d) The Company shall enter into such customary agreements for
secondary offerings (including a customary underwriting agreement with the
underwriter or underwriters, if any) and take all such other reasonable actions
reasonably requested by the Holders in connection therewith in order to expedite
or facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into and whether
or not the Registrable Securities are to be sold in an underwritten offering:
(i) make such representations and warranties to the
Holders and the underwriter or underwriters, if any, in form, substance
and scope as are customarily made by issuers to underwriters in
secondary offerings;
(ii) cause to be delivered to the sellers of
Registrable Securities and the underwriter or underwriters, if any,
opinions of independent counsel to the Company, on and dated as of the
effective day (or in the case of an underwritten offering, dated the
date of delivery of any Registrable Securities sold pursuant thereto)
of the Registration Statement, which counsel and opinions (in form,
scope and substance) shall be
7
reasonably satisfactory to the Holders and the underwriter(s), if any,
and their counsel and covering, without limitation, such matters as the
due authorization and issuance of the securities being registered and
compliance with securities laws by the Company, in connection with the
authorization, issuance and registration thereof and other matters that
are customarily given to underwriters in underwritten offerings,
addressed to the Holders and each underwriter, if any.
(iii) in an underwritten offering only, and then only
if required by the underwriters, cause to be delivered, immediately
prior to the effectiveness of the Registration Statement and at the
time of delivery of any Registrable Securities sold pursuant thereto,
and at the beginning of each fiscal year following a year during which
the Company's independent certified public accountants shall have
reviewed any of the Company's books or records, a "comfort" letter from
the Company's independent certified public accountants addressed to the
Holders and each underwriter, if any, stating that such accountants are
independent public accountants within the meaning of the Securities Act
and the applicable published rules and regulations thereunder, and
otherwise in customary form and covering such financial and accounting
matters as are customarily covered by letters of the independent
certified public accountants delivered in connection with secondary
offerings; such accountants shall have undertaken in each such letter
to update the same during each such fiscal year in which such books or
records are being reviewed so that each such letter shall remain
current, correct and complete throughout such fiscal year; and each
such letter and update thereof, if any, shall be reasonably
satisfactory to the Holders.
(iv) if an underwriting agreement is entered into,
the same shall include customary indemnification and contribution
provisions to and from the underwriters and procedures for secondary
underwritten offerings;
(v) deliver such documents and certificates as may be
reasonably requested by the Holders of the Registrable Securities being
sold or the managing underwriter or underwriters, if any, to evidence
compliance with clause (i) above and with any customary conditions
contained in the underwriting agreement, if any; and
(vi) deliver to the Holders on the effective day (or
in the case of an underwritten offering, dated the date of delivery of
any Registrable Securities sold pursuant thereto) of the Registration
Statement, and at the beginning of each fiscal quarter thereafter, a
certificate in form and substance as shall be reasonably satisfactory
to the Holders, executed by an executive officer of the Company and to
the effect that all the representations and warranties of the Company
contained in the Investment Agreement are still true and correct except
as disclosed in such certificate; the Company shall, as to each such
certificate delivered at the beginning of each fiscal quarter, update
or cause to be updated each such certificate during such quarter so
that it shall remain current, complete and correct throughout such
quarter; and such updates received by the Holders during such quarter,
if any, shall have been reasonably satisfactory to the Holders.
(e) The Company shall make available for inspection by any Holder or
group
8
of Holders owning at least 25% of the Registrable Securities, any
representative(s) of such Holder(s) or all Holders together, any underwriter
participating in any disposition pursuant to a Registration Statement, and any
attorney or accountant retained by any such Holder(s) or underwriter, all
financial and other records customary for purposes of the Holders' due diligence
examination of the Company and review of any Registration Statement, all SEC
Documents (as defined in the Investment Agreement) filed subsequent to the
Closing, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all information
reasonably requested by any such representative, underwriter, attorney or
accountant in connection with such Registration Statement, provided that such
parties agree to keep such information confidential.
(f) Subject to Section 2(b) above, the Company may suspend the use of
any prospectus used in connection with the Registration Statement only in the
event, and for such period of time as, such a suspension is required by the
rules and regulations of the Commission, provided that such suspension or
suspensions shall not exceed twenty (20) days in any calendar year. The Company
will use its best efforts to cause such suspension to terminate at the earliest
possible date.
(g) The Company shall file a Registration Statement with respect to any
newly authorized and/or reserved shares constituting Registrable Securities
within five (5) business days of any shareholders meeting authorizing same and
shall use its best efforts to cause such Registration Statement to become
effective within sixty (60) days of such shareholders meeting. If the Holders
become entitled, pursuant to an event described in clause (ii) of the definition
of Registrable Securities, to receive any securities in respect of Registrable
Securities that were already included in a Registration Statement, subsequent to
the date such Registration Statement is declared effective, and the Company is
unable under the securities laws to add such securities to the then effective
Registration Statement, the Company shall promptly file, in accordance with the
procedures set forth herein, an additional Registration Statement with respect
to such newly Registrable Securities. The Company shall use its best efforts to
(i) cause any such additional Registration Statement, when filed, to become
effective under the Securities Act, and (ii) keep such additional Registration
Statement effective during the period described in Section 5 below. All of the
registration rights and remedies under this Agreement shall apply to the
registration of such newly reserved shares and such new Registrable Securities,
including without limitation the provisions providing for default payments
contained herein.
3. Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance with registration
pursuant to this Agreement shall be borne by the Company, and all Selling
Expenses of a Holder shall be borne by such Holder.
4. Registration on Form S-3. The Company shall use its best efforts to
qualify for registration on Form S-3 or any comparable or successor form or
forms, or in the event that the Company is ineligible to use such form, such
form as the Company is eligible to use under the Securities Act.
5. Registration Period. In the case of the registration effected by the
Company pursuant to this Agreement, the Company will use its best efforts to
keep such registration
9
effective until the earliest of (i) June 30, 2003; (ii) all of the Holders
having completed the sales or distribution described in the Registration
Statement relating thereto; or (iii) such Registrable Securities being able to
be sold under Rule 144(k) or any equivalent successor rule (provided that the
Company's transfer agent has accepted an instruction from the Company to such
effect).
6. Indemnification.
(a) Company Indemnity. The Company will indemnify each Holder, each of
its officers, directors, partners, agents, and employees and each person
controlling each Holder, within the meaning of Section 15 of the Securities Act
and the rules and regulations thereunder with respect to which registration,
qualification or compliance has been effected pursuant to this Agreement, and
each underwriter, if any, and each person who controls, within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder, any
underwriter, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the Securities Act or
any state securities law or in either case, any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and will reimburse each Holder, each of its officers, directors, agents and
employees and partners, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to a Holder to the extent that any
such claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission based upon written information furnished to the
Company by such Holder or the underwriter (if any) therefor and stated to be
specifically for use therein. The indemnity agreement contained in this Section
5(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company (which consent will not be unreasonably withheld).
(b) Holder Indemnity. Each Holder will, severally and not jointly, if
Registrable Securities held by it are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors, officers, partners, agents and employees, and
each underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company or such underwriter
within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder, each other Holder (if any), and each of their officers,
directors, agents, employees and partners, and each person controlling such
other Holder(s) against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to
10
make the statement therein not misleading, and will reimburse the Company and
such other Holder(s) and their directors, officers, partners, agents, employees,
underwriters or control persons for any legal or any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically for use
therein, and provided that the maximum amount for which such Holder shall be
liable under this indemnity shall not exceed the gross proceeds received by such
Holder from the sale of the Registrable Securities. The indemnity agreement
contained in this Section 5(b) shall not apply to amounts paid in settlement of
any such claims, losses, damages or liabilities if such settlement is effected
without the consent of such Holder (which consent shall not be unreasonably
withheld).
(c) Procedure. Each party entitled to indemnification under this
Section (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim in any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at such party's expense, and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Article
except to the extent that the Indemnifying Party is materially and adversely
affected by such failure to provide notice. No Indemnifying Party, in the
defense of any such claim or litigation, shall, 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. Each Indemnified Party shall furnish
such information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
7. Contribution. If the indemnification provided for in Section 6
herein is unavailable to the Indemnified Parties in respect of any losses,
claims, damages or liabilities referred to herein (other than by reason of the
exceptions provided therein), then each such 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 or
liabilities as between the Company on the one hand and any Holder on the other,
in such proportion as is appropriate to reflect the relative fault of the
Company and of such Holder in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company on the one
hand and of any Holder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by
11
such Holder.
In no event shall the obligation of any Indemnifying Party to
contribute under this Section 6 exceed the amount that such Indemnifying Party
would have been obligated to pay by way of indemnification if the
indemnification provided for under Section 6(a) or 6(b) hereof had been
available under the circumstances.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Holders or the underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraphs shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this section, no Holder or underwriter shall
be required to contribute any amount in excess of the amount by which (i) in the
case of any Holder, the gross proceeds received by such Holder from the sale of
Registrable Securities or (ii) in the case of an underwriter, the total price at
which the Registrable Securities purchased by it and distributed to the public
were offered to the public exceeds, in any such case, the amount of any damages
that such Holder or underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
8. Survival. The indemnity and contribution agreements contained in
Sections 6 and 7 and the representations and warranties of the Company referred
to in Section 2(d)(i) shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement or the Investment Agreement
or any underwriting agreement, (ii) any investigation made by or on behalf of
any Indemnified Party or by or on behalf of the Company, and (iii) the
consummation of the sale or successive resales of the Registrable Securities.
9. Information by Holders. Each Holder shall furnish to the Company
such information regarding such Holder and the distribution and/or sale proposed
by such Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Agreement. Subject to applicable law, the
intended method or methods of disposition and/or sale (Plan of Distribution) of
such securities as so provided by such Holder shall be included without
alteration in the Registration Statement covering the Registrable Securities and
shall not be changed without written consent of such Holder, which consent shall
not be unreasonably withheld.
10. Replacement Certificates. The certificate(s) representing the
Shares held by any Investor (or then Holder) may be exchanged by such Investor
(or such Holder) at any time and
12
from time to time for certificates with different denominations representing an
equal aggregate number of Shares, as reasonably requested by such Investor (or
such Holder) upon surrendering the same. No service charge will be made for such
registration or transfer or exchange.
11. Transfer or Assignment. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the Investors by
the Company under this Agreement to cause the Company to register Registrable
Securities may be transferred or assigned (in whole or in part) to a transferee
or assignee of Shares, and all other rights granted to the Investors by the
Company hereunder may be transferred or assigned to any transferee or assignee
of any Shares; provided in each case that the Company must be given written
notice by such Investor or such Holder at the time of or within a reasonable
time after said transfer or assignment, stating the name and address of said
transferee or assignee and identifying the securities with respect to which such
registration rights are being transferred or assigned; and provided further that
the transferee or assignee of such rights agrees in writing to be bound by the
registration provisions of this Agreement.
12. Reports Under Securities Exchange Act of 1934. With a view to
making available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the Commission that may at
any time permit a Holder to sell securities of the Company to the public without
registration, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144; and
(b) use its best efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Securities Exchange Act of 1934, as amended.
13. Miscellaneous.
(a) Remedies. The Company and the Investors acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which any of them may be entitled by
law or equity.
(b) Jurisdiction. The Company and each of the Investors (i) hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court, the New York State courts and other courts of the United States sitting
in New York County, New York for the purposes of any suit, action or proceeding
arising out of or relating to this Agreement and (ii) hereby waives, and agrees
not to assert in any such suit action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is
13
brought in an inconvenient forum or that the venue of the suit, action or
proceeding is improper. The Company and each of the Investors consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this paragraph shall affect or
limit any right to serve process in any other manner permitted by law.
(c) Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be effective upon actual
receipt of such mailing. The addresses for such communications shall be:
to the Company: Vion Pharmaceuticals, Inc.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax:(▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
with copies to: Fulbright & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
to the Investors:
with copies to: .
Any party hereto may from time to time change its address for notices by giving
at least 10 days' written notice of such changed address to the other parties
hereto.
(d) Indemnity. Each party shall indemnify each other party against any
loss, cost or damages (including reasonable attorney's fees) incurred as a
result of such parties' breach of any representation, warranty, covenant or
agreement in this Agreement.
(e) Waivers. No waiver by any party of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right accruing to
it thereafter. The representations and warranties and the agreements and
covenants of the Company and each Investor contained herein shall survive the
14
Closing.
(f) Amendment and Waiver. Notwithstanding anything to the contrary
contained in this Agreement, this Agreement may be amended, and/or any of the
Company's obligations under this Agreement may be waived from time to time, in
whole or in part, by the affirmative vote of a two-thirds (2/3)
majority-in-interest of the Holders of either the Shares, or of both the Shares
and the other shares of Common Stock to be purchased in the [Agreements with
▇▇▇▇▇▇▇ Associates, L.P. and Westgate International, L.P. and Kleinwort ▇▇▇▇▇▇
Limited and Winchester Capital Healthcare Partners, LLC only: Companion
Offerings] [Agreements with Wechsler & Co., Inc and United Equities Commodities
Company only: First Companion Offering and, if any, the Other Companion
Offerings] (voting or consenting as a single class), provided that any such
waiver or amendment approved by the larger class of Holders applies equally to
the Holders under this Agreement and the Holders under the Registration Rights
Agreement to be executed in connection with the [Agreements with ▇▇▇▇▇▇▇
Associates, L.P. and Westgate International, L.P. and Kleinwort ▇▇▇▇▇▇ Limited
and Winchester Capital Healthcare Partners, LLC only: Companion Offerings]
[Agreements with Wechsler & Co., Inc. and United Equities Commodities Company
only: First Companion Offering and the Other Companion Offerings, if any]. Any
holders of Shares who are not original purchasers and are affiliates of the
Company (and the Company itself) shall not participate in such vote and the
Shares of such holders shall be disregarded and deemed not to be outstanding.
(Any such amendment of this Agreement shall require the Company's written
consent.)
(g) Execution. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, it
being understood that all parties need not sign the same counterpart.
(h) Entire Agreement. This Agreement, together with the Investment
Agreement and the agreements and documents contemplated hereby and thereby,
contains the entire understanding and agreement of the parties.
(i) Governing Law. This Agreement and the validity and performance of
the terms hereof shall be governed by and construed in accordance with the laws
of the State of New York, except to the extent that the law of Delaware
regulates the Company's issuance of securities.
[Agreements with ▇▇▇▇▇▇▇ Associates, L.P. and Westgate International,
L.P. and Kleinwort ▇▇▇▇▇▇ Limited and Winchester Capital Healthcare Partners,
LLC only:
(j) Severability. The parties acknowledge and agree that the Investors
are not agents, affiliates or partners of each other, that all representations,
warranties, covenants and agreements of the Investors hereunder are several and
not joint, that no Investor shall have any responsibility or liability for the
representations, warrants, agreements, acts or omissions of any other Investor,
and that any rights granted to "Investors" hereunder shall be enforceable by
each Investor hereunder.]
(k) Titles. The titles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
VION PHARMACEUTICALS, INC.
By:
------------------------------------
Name:
Title:
INVESTORS:
[ ]
By:
------------------------------------
[ ]
By:
------------------------------------