Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (this "Agreement") is made
and entered into as of September 15, 2003, by and among CytRx Corporation, a
Delaware corporation (the "Company"), and the persons and entities listed on
Exhibit A hereto (each, a "Purchaser" and, collectively, the "Purchasers").
WHEREAS, upon the terms and subject to the conditions of the
Securities Purchase Agreement, dated as of the date hereof (the "Purchase
Agreement"), the Company has agreed to issue and sell shares of its Common Stock
and Warrants to purchase shares of its Common Stock to the Purchasers; and
WHEREAS, to induce the Purchasers to execute and deliver the
Purchase Agreement and to purchase the Shares and the Warrants, the Company has
agreed to provide certain registration rights under the Securities Act of 1933,
as amended, with respect to the Shares, the Warrants and the Warrant Shares
(each as respectively defined in the Purchase Agreement).
NOW, THEREFORE, in consideration of the representations,
warranties and agreements contained herein and other good and valuable
consideration, the receipt and legal adequacy of which are hereby acknowledged
by the parties, the Company and the Purchasers hereby agree as follows:
1. Definitions.
Capitalized terms used but not otherwise defined herein shall
have the meanings given such terms in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
"Affiliate" means, with respect to any Person, any other
Person that directly or indirectly controls or is controlled by or under common
control with such Person. For the purposes of this definition, "control," when
used with respect to any Person, means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.
"Blackout Period" shall have the meaning set forth in Section
3(m).
"Board" shall have the meaning set forth in Section 3(m).
"Business Day" means any day except Saturday, Sunday and any
day which is a legal holiday or a day on which banking institutions in the state
of California generally are authorized or required by law or other government
actions to close.
"Commission" means the Securities and Exchange Commission.
"Common Shares" shall have the meaning set forth in the
definition of "Registrable Securities."
"Common Stock" means the Company's Common Stock, $.001 par
value.
"Effectiveness Date" means with respect to the Registration
Statement the earlier of (i) the 120th day following the Closing Date, before
which the Company will use its commercially reasonable best efforts to cause the
Registration Statement to become effective, and (ii) the date which is within
five (5) Business Days after the date on which the Commission informs the
Company in writing (a) that the Commission will not review the Registration
Statement, or (b) that the Company may request the acceleration of the
effectiveness of the Registration Statement.
"Effectiveness Period" shall have the meaning set forth in
Section 2.
"Event" shall have the meaning set forth in Section 8(d).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holder" means, collectively, each holder from time to time of
Registrable Securities including, without limitation, each Purchaser and its
assignees. To the extent this Agreement refers to an election, consent, waiver,
request or approval of or by the Holder, such reference shall mean an election,
consent, waiver, request or approval by the holders of a majority in interest of
the then-outstanding Registrable Securities (on an as exercised basis).
"Indemnified Party" shall have the meaning set forth in
Section 6(c).
"Indemnifying Party" shall have the meaning set forth in
Section 6(c).
"Liquidated Damages" shall have the meaning set forth in
Section 8(d).
"Losses" shall have the meaning set forth in Section 6(a).
"NASDAQ" shall mean the NASDAQ Stock Market.
"Person" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted
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from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.
"Registrable Securities" means (i) the shares of Common Stock
issued or issuable pursuant to the Purchase Agreement, and upon any stock split,
stock dividend, recapitalization or similar event with respect to such shares of
Common Stock and any other securities issued in exchange of or replacement of
such shares of Common Stock (collectively, the "Common Shares"); until in the
case of any of the Common Shares (a) a Registration Statement covering such
Common Share has been declared effective by the Commission and continues to be
effective during the Effectiveness Period, or (b) such Common Share is sold in
compliance with Rule 144 or may be sold pursuant to Rule 144(k), after which
time such Common Share shall not be a Registrable Security; and (ii) the shares
of Common Stock issued and issuable pursuant to the exercise of the Warrants,
and upon any stock split, stock dividend, recapitalization or similar event with
respect to such shares of Common Stock and any other securities issued in
exchange of or replacement of such shares of Common Stock (collectively, the
"Warrant Shares"); until in the case of any of the Warrant Shares (a) a
Registration Statement covering such Warrant Share has been declared effective
by the Commission and continues to be effective during the Effectiveness Period,
or (b) such Warrant Share is sold in compliance with Rule 144 or may be sold
pursuant to Rule 144(k), after which time such Warrant Share shall not be a
Registrable Security.
"Registration Statement" means the registration statement,
including the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference in such
registration statement, for the Shares and the Warrant Shares required to be
filed by the Company with the Commission pursuant to this Agreement.
"Required Filing Date" means the thirtieth (30th) day
immediately following the Closing Date.
"Rule 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 158" means Rule 158 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
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"Securities Act" means the Securities Act of 1933, as amended.
"Special Counsel" means an attorney selected by and acting as
special counsel to Holder.
"Warrant Shares" shall have the meaning set forth in the
definition of "Registrable Securities."
2. Registration. On or prior to the Required Filing Date, the
Company shall prepare and file with the Commission a Registration Statement
covering the resale of the Registrable Securities for an offering to be made on
a continuous basis pursuant to Rule 415. The Registration Statement shall be on
Form S-3 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance with the Securities Act and the rules
promulgated thereunder) and shall contain (except if otherwise directed by the
Purchasers) the "Plan of Distribution" attached hereto as Exhibit B. The Company
shall (i) use its commercially reasonable best efforts to cause the Registration
Statement to be declared effective under the Securities Act (including filing
with the Commission a request for acceleration of effectiveness within five (5)
Business Days of the date that the Company is notified in writing by the
Commission that the Registration Statement will not be "reviewed," or not be
subject to further review) as soon as possible after the filing thereof, but in
any event prior to the Effectiveness Date, and (ii) keep such Registration
Statement continuously effective under the Securities Act for a period of two
years from the Effectiveness Date (the "Effectiveness Period").
3. Registration Procedures; Company's Obligations.
In connection with the registration of the Registrable Securities,
the Company shall:
(a) Prepare and file with the Commission on or prior to the Required
Filing Date, a Registration Statement on Form S-3 (or if the Company is not then
eligible to register for resale the Registrable Securities on Form S-3 such
registration shall be on another appropriate form in accordance with the
Securities Act and the Rules promulgated thereunder) in accordance with the
method or methods of distribution thereof as specified by the Holder (except if
otherwise directed by the Holder), and use its commercially reasonable best
efforts to cause the Registration Statement to become effective and remain
effective as provided herein; provided, however, that not less than three (3)
Business Days prior to the filing of the Registration Statement or any related
Prospectus or any amendment or supplement thereto (including any document that
would be incorporated therein by reference), the Company shall (i) furnish to
the Holder and any Special Counsel, copies of all such documents proposed to be
filed, which documents (other than those incorporated by reference) will be
subject to the timely review of and comment by such Special Counsel, and (ii) at
the request of the Holder cause its officers and directors, counsel and
independent certified public accountants to respond to such inquiries as shall
be necessary, in the reasonable opinion of such Special Counsel, to conduct a
reasonable investigation within the meaning of the Securities Act. The Company
shall not file the Registration Statement or any such Prospectus or any
amendments or supplements thereto to
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which the Holder or any Special Counsel shall reasonably object in writing
within three (3) Business Days of their receipt thereof.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement as may be
necessary to keep the Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period in order to
register for resale under the Securities Act all of the Registrable Securities;
(ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; (iii) respond promptly to any comments received from the
Commission with respect to the Registration Statement or any amendment thereto
and promptly provide the Holder true and complete copies of all correspondence
from and to the Commission relating to the Registration Statement; and (iv)
comply in all material respects with the provisions of the Securities Act and
the Exchange Act with respect to the disposition of all Registrable Securities
covered by the Registration Statement during the applicable period in accordance
with the intended methods of disposition by the Holder set forth in the
Registration Statement as so amended or in such Prospectus as so supplemented.
(c) Notify the Holder of Registrable Securities to be sold and any
Special Counsel promptly (and, in the case of (i)(A) below, not less than three
(3) Business Days prior to such filing and, in the case of (i)(C) below, no
later than the first Business Day following the date on which the Registration
Statement becomes effective) and (if requested by any such Person) confirm such
notice in writing no later than three (3) Business Days following the day (i)(A)
when a Prospectus or any Prospectus supplement or post-effective amendment to
the Registration Statement is proposed to be filed, (B) when the Commission
notifies the Company whether there will be a "review" of such Registration
Statement and whenever the Commission comments in writing on such Registration
Statement, and (C) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of any
event that makes any statement made in the Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
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The Company shall promptly furnish to the Special Counsel, without
charge, (i) any correspondence from the Commission or the Commission's staff to
the Company or its representatives relating to any Registration Statement, and
(ii) promptly after the same is prepared and filed with the Commission, a copy
of any written response to the correspondence received from the Commission.
(d) Use its commercially reasonable best efforts to avoid the
issuance of, or, if issued, obtain the withdrawal of, (i) any order suspending
the effectiveness of the Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any U.S. jurisdiction, at the earliest practicable
moment.
(e) If requested by the Holder, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment to the Registration Statement
such information as the Company reasonably agrees should be included therein,
and (ii) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such Prospectus supplement or
post-effective amendment.
(f) Furnish to the Holder and any Special Counsel, without charge,
at least one conformed copy of each Registration Statement and each amendment
thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and all exhibits
to the extent requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the
Commission.
(g) Promptly deliver to the Holder and any Special Counsel, without
charge, as many copies of the Registration Statement, Prospectus or Prospectuses
(including each form of prospectus) and each amendment or supplement thereto as
such Persons may reasonably request; and the Company hereby consents to the use
of such Prospectus and each amendment or supplement thereto by the selling
Holder in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, use its
commercially reasonable best efforts to register or qualify or cooperate with
the selling Holder and any Special Counsel in connection with the registration
or qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as the Holder reasonably requests
in writing, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by a Registration Statement;
provided, however, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action that would subject it to general service of process in any such
jurisdiction where it is not then so subject or subject the Company to any tax
in any such jurisdiction where it is not then so subject.
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(i) Cooperate with the Holder to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold
pursuant to a Registration Statement and to enable such Registrable Securities
to be in such denominations and registered in such names as the Holder may
request at least two (2) Business Days prior to any sale of Registrable
Securities.
(j) Upon the occurrence of any event contemplated by Section
3(c)(v), promptly prepare a supplement or amendment, including a post-effective
amendment, to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference, and file any other required document so that, as thereafter
delivered, neither the Registration Statement nor such Prospectus will contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(k) Use its commercially reasonable best efforts to cause all
Registrable Securities relating to such Registration Statement to be quoted by
NASDAQ and any other securities exchange, quotation system, market or
over-the-counter bulletin board, if any, on which the same securities issued by
the Company are then listed as and when required pursuant to the Purchase
Agreement.
(l) Comply in all material respects with all applicable rules and
regulations of the Commission and make generally available to its security
holders earning statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 not later than forty-five (45) days after the end of
any twelve (12) month period (or ninety (90) days after the end of any twelve
(12) month period if such period is a fiscal year) commencing on the first day
of the first fiscal quarter of the Company after the effective date of the
Registration Statement, which statement shall conform to the requirements of
Rule 158.
(m) If (i) there is material non-public information regarding the
Company which the Company's Board of Directors (the "Board") reasonably
determines not to be in the Company's best interest to disclose and which the
Company is not otherwise required to disclose, or (ii) there is a significant
business opportunity (including, but not limited to, the acquisition or
disposition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or other similar transaction) available to
the Company which the Board reasonably determines not to be in the Company's
best interest to disclose and which the Company would be required to disclose
under the Registration Statement, then the Company may suspend effectiveness of
a Registration Statement and suspend the sale of Registrable Securities under a
Registration Statement one (1) time every three (3) months or three (3) times in
any twelve month period, provided that the Company may not suspend its
obligation for more than sixty (60) days in the aggregate in any twelve month
period (each, a "Blackout Period"); provided, however, that no such suspension
shall be permitted for more than twenty (20) consecutive days, arising out of
the same set of facts, circumstances or transactions, and that there shall be at
least two business days between each Blackout Period.
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(n) Within two (2) Business Days after the Registration Statement
which includes the Registrable Securities is ordered effective by the
Commission, the Company shall deliver, and shall cause legal counsel for the
Company to deliver, to the transfer agent for such Registrable Securities (with
copies to the Holder whose Registrable Securities are included in such
Registration Statement) confirmation that the Registration Statement has been
declared effective by the Commission in the form attached hereto as Exhibit C.
4. Registration Procedures; Holder's Obligations
In connection with the registration of the Registrable Securities,
the Holder shall:
(a) If the Registration Statement refers to the Holder by name or
otherwise as the holder of any securities of the Company, have the right to
require (if such reference to the Holder by name or otherwise is not required by
the Securities Act or any similar federal statute then in force) the deletion of
the reference to the Holder in any amendment or supplement to the Registration
Statement filed or prepared subsequent to the time that such reference ceases to
be required.
(b) (i) not sell any Registrable Securities under the Registration
Statement until it has received copies of the Prospectus as then amended or
supplemented as contemplated in Section 3(g) and notice from the Company that
such Registration Statement and any post-effective amendments thereto have
become effective as contemplated by Section 3(c), (ii) comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration
Statement, and (iii) furnish to the Company information regarding such Holder
and the distribution of such Registrable Securities as is required by law to be
disclosed in the Registration Statement, and the Company may exclude from such
registration the Registrable Securities of the Holder if it fails to furnish
such information within a reasonable time prior to the filing of each
Registration Statement, supplemented Prospectus and/or amended Registration
Statement.
(c) upon receipt of a notice from the Company of the occurrence of
any event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv),
3(c)(v) or 3(m), forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until the Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing by the Company
that the use of the applicable Prospectus may be resumed, and, in either case,
has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.
5. Registration Expenses
All reasonable fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not the Registration Statement is filed or becomes effective and
whether or not any Registrable Securities are sold pursuant to the Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, the following: (i) all registration and
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filing fees (including, without limitation, fees and expenses (A) with respect
to filings required to be made with NASDAQ and each securities exchange or other
market on which Registrable Securities are required hereunder to be listed, (B)
with respect to filings required to be made with the Commission, and (C) in
compliance with state securities or Blue Sky laws); (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is requested by the holders of a majority of the Registrable
Securities included in the Registration Statement); (iii) messenger, telephone
and delivery expenses incurred by the Company; (iv) fees and disbursements of
counsel for the Company; and (v) fees and expenses of all other Persons retained
by the Company in connection with the consummation of the transactions
contemplated by this Agreement, including, without limitation, the Company's
independent public accountants (including the expenses of any comfort letters or
costs associated with the delivery by independent public accountants of a
comfort letter or comfort letters). In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, and the
fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder. The Company shall
not be responsible for the payment of any commissions or other expenses incurred
by the Holder in connection with their sales of Registrable Securities or for
the fees of any Special Counsel.
6. Indemnification
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Purchaser, its permitted assignees, officers, directors, agents, brokers
(including brokers who offer and sell Registrable Securities as principal as a
result of a pledge or any failure to perform under a margin call of Common
Stock), investment advisors and employees, each Person who controls any such
Purchaser or permitted assignee (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the officers, directors,
agents and employees of each such controlling Person, and the respective
successors, assigns, estate and personal representatives of each of the
foregoing, to the fullest extent permitted by applicable law, from and against
any and all claims, losses, damages, liabilities, penalties, judgments, costs
(including, without limitation, costs of investigation) and expenses (including,
without limitation, reasonable attorneys' fees and expenses) (collectively,
"Losses"), as incurred, arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in the Registration Statement, any
Prospectus, as supplemented or amended, if applicable, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading, except (i) to the
extent, but only to the extent, that such untrue statements or omissions are
based solely upon information regarding the Holder furnished in writing to the
Company by the Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto,
or (ii) as a result of the failure of the Holder to deliver a Prospectus, as
amended or supplemented, to a purchaser in connection with an offer or sale
(provided that copies of the Prospectus, as amended or supplemented, have been
provided to the
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Holder by the Company for delivery to such purchaser). The Company shall notify
the Holder promptly of the institution, threat or assertion of any Proceeding of
which the Company is aware in connection with the transactions contemplated by
this Agreement. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of an Indemnified Party (as defined in
Section 6(c) hereof) and shall survive the transfer of the Registrable
Securities by the Holder.
(b) Indemnification by Purchaser. Each Purchaser and its permitted
assignees shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of
such controlling Persons, and the respective successors, assigns, estate and
personal representatives of each of the foregoing, to the fullest extent
permitted by applicable law, from and against any and all Losses, as incurred,
arising out of or relating to any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any Prospectus, as
supplemented or amended, if applicable, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in the light of the circumstances under
which they were made) not misleading, to the extent, but only to the extent,
that (i) such untrue statement or omission is contained in or omitted from any
information so furnished in writing by the Holder or the Special Counsel to the
Company specifically for inclusion in the Registration Statement or such
Prospectus, and (ii) such information was reasonably relied upon by the Company
for use in the Registration Statement, such Prospectus or such form of
prospectus or, to the extent that such information relates to the Holder or the
Holder's proposed method of distribution of Registrable Securities, was reviewed
and expressly approved in writing by the Holder expressly for use in the
Registration Statement, such Prospectus or such form of Prospectus Supplement.
Notwithstanding anything to the contrary contained herein, the Holder shall be
liable under this Section 6(b) for only that amount as does not exceed the net
proceeds to the Holder as a result of the sale of Registrable Securities
pursuant to such Registration Statement.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall
be brought or asserted against any Person entitled to indemnity pursuant to
Section 6(a) or 6(b) hereunder (an "Indemnified Party"), such Indemnified Party
promptly shall notify the Person from whom indemnity is sought (the
"Indemnifying Party) in writing, and the Indemnifying Party shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have materially and adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (i) the Indemnifying Party
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has agreed in writing to pay such fees and expenses; or (ii) the Indemnifying
Party shall have failed promptly to assume the defense of such Proceeding and to
employ counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (iii) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld, conditioned or delayed. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, which consent shall not unreasonably
be withheld, conditioned or delayed, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.
All reasonable fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten (10) Business Days of written notice thereof to the
Indemnifying Party (regardless of whether it is ultimately determined that an
Indemnified Party is not entitled to indemnification hereunder; provided, that
the Indemnifying Party may require such Indemnified Party to undertake to
reimburse all such fees and expenses to the extent it is finally judicially
determined that such Indemnified Party is not entitled to indemnification
hereunder or pursuant to applicable law).
(d) Contribution. If a claim for indemnification under Section 6(a)
or 6(b) is unavailable to an Indemnified Party because of a failure or refusal
of a governmental authority to enforce such indemnification in accordance with
its terms (by reason of public policy or otherwise), then each 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, in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and Indemnified Party in connection with the actions,
statements or omissions that resulted in such Losses 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 any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission of a material fact, has been
taken or made by, or relates to information supplied by, such Indemnifying Party
or Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Section 6(c), any
reasonable attorneys' or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for under
Section 6(a) or 6(b) was available to such
-11-
party in accordance with its terms. Notwithstanding anything to the contrary
contained herein, the Holder shall be liable or required to contribute under
this Section 6(d) for only that amount as does not exceed the net proceeds to
the Holder as a result of the sale of Registrable Securities pursuant to the
Registration Statement.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
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.
The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
7. Rule 144.
As long as the Holder owns Registrable Securities, the Company
covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange
Act and to promptly furnish the Holder with true and complete copies of all such
filings. As long as the Holder owns Registrable Securities, if the Company is
not required to file reports pursuant to Section 13(a) or 15(d) of the Exchange
Act, it will prepare and furnish to the Holder and make publicly available in
accordance with Rule 144(c) promulgated under the Securities Act annual and
quarterly financial statements, together with a discussion and analysis of such
financial statements in form and substance substantially similar to those that
would otherwise be required to be included in reports required by Section 13(a)
or 15(d) of the Exchange Act, as well as any other information required thereby,
in the time period that such filings would have been required to have been made
under the Exchange Act. The Company further covenants that it will take such
further action as the Holder may reasonably request, all to the extent required
from time to time to enable the Holder to sell the Common Shares and Warrant
Shares without registration under the Securities Act within the limitation of
the exemptions provided by Rule 144 promulgated under the Securities Act,
including providing any legal opinions of counsel to the Company referred to in
the Purchase Agreement. Upon the request of any Holder, the Company shall
deliver to such Holder a written certification of a duly authorized officer as
to whether it has complied with such requirements.
8. Miscellaneous.
(a) Remedies. The remedies provided in this Agreement and the
Purchase Agreement are cumulative and not exclusive of any remedies provided by
law. In the event of a breach by the Company or by the Holder of any of their
obligations under this Agreement, the Holder or the Company, as the case may be,
in addition to being entitled to exercise all rights granted by law and under
this Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and the Holder agree
that monetary damages would not provide adequate compensation for any losses
incurred by reason
-12-
of a breach by it of any of the provisions of this Agreement and hereby further
agrees that, in the event of any action for specific performance in respect of
such breach, it shall waive the defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any of its
Affiliates has as of the date hereof entered into, nor shall the Company or any
of its Affiliates, on or after the date of this Agreement, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holder in this Agreement or otherwise conflicts with the
provisions hereof. Without limiting the generality of the foregoing, without the
written consent of the Holder, the Company shall not grant to any Person the
right to request the Company to register any securities of the Company under the
Securities Act if the rights so granted are inconsistent with the rights granted
to the Holder set forth herein, or otherwise prevent the Company with complying
with all of its obligations hereunder.
(c) No Piggyback on Registrations. Neither the Company nor any of
its security holders (other than the Holder in such capacity pursuant hereto)
may include securities of the Company in the Registration Statement; provided,
however, that securities held by other security holders the resale of which the
Company is contractually obligated to register under the Securities Act as of
the date of this Agreement may be included in the Registration Statement.
(d) Failure to File Registration Statement and Other Events. The
Company and the Holder agree that the Holder will suffer damages if the
Registration Statement is not filed on or prior to the Required Filing Date or
is not declared effective by the Commission on or prior to the Effectiveness
Date and maintained in the manner contemplated herein during the Effectiveness
Period or if certain other events occur. The Company and the Holder further
agree that it would not be feasible to ascertain the extent of such damages with
precision. Accordingly, if (i) the Registration Statement is not filed on or
prior to the Required Filing Date, or is not declared effective by the
Commission on or prior to the Effectiveness Date, or (ii) the Company fails to
file with the Commission a request for acceleration within five (5) Business
Days of the date that the Company is notified in writing by the Commission that
a Registration Statement will not be "reviewed," or not subject to further
review, or (iii) the Registration Statement is filed with and declared effective
by the Commission but thereafter ceases to be effective or available as to all
Registrable Securities at any time during the Effectiveness Period, without
being succeeded within a reasonable period by a subsequent Registration
Statement filed with and declared effective by the Commission (any such failure
or breach being referred to as an "Event"), the Company shall pay as liquidated
damages for such failure or breach and not as a penalty (the "Liquidated
Damages") to the Holder an amount equal to two percent (2%) of the purchase
price of the Common Stock paid by the Holder pursuant to the Purchase Agreement
for each thirty (30) day period during which any Event described in subsections
(i), (ii) or (iii) above occurs and is continuing, pro rated for any period less
than thirty (30) days, following the Event until the applicable Event has been
cured; provided, however, the Holder will waive any Liquidated Damages resulting
from the Registration Statement ceasing to remain effective after being declared
effective by the Commission if the Company cures such breach prior to the end of
the first thirty (30) day period thereafter. Notwithstanding the foregoing, in
no event shall the Company be required to pay aggregate Liquidated Damages (A)
in excess of sixteen percent (16%) of the purchase price of the Common Stock
paid by the Holder pursuant to the Purchase
-13-
Agreement for a failure to comply with subsections (i) or (ii) above, or (B) in
excess of eight percent (8%) of the purchase price of the Common Stock paid by
the Holder pursuant to the Purchase Agreement for a failure to comply with
subsection (iii) above. Payments to be made pursuant to this Section 8(d) shall
be due and payable immediately upon demand in cash. The parties agree that the
Liquidated Damages represent a reasonable estimate on the part of the parties,
as of the date of this Agreement, of the amount of damages that may be incurred
by the Holder if the Registration Statement is not filed on or prior to the
Required Filing Date or has not been declared effective by the Commission on or
prior to the Effectiveness Date and maintained in the manner contemplated herein
during the Effectiveness Period.
(e) Consent to Jurisdiction. The Company and each Purchaser (i)
hereby irrevocably submit to the non-exclusive jurisdiction of the United States
District Court for the Central District of California and the courts of the
State of California located in the City of Los Angeles, California, for the
purposes of any suit, action or proceeding arising out of or relating to this
Agreement or the Purchase Agreement, and (ii) hereby waive, and agree 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 brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. The Company and each Purchaser consent 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 Section 8(e) shall affect
or limit any right to serve process in any other manner permitted by law.
(f) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Purchasers.
(g) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earlier of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified for notice prior to 5:00 p.m., Pacific
Time, on a Business Day, (ii) the first Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified for notice later than 5:00 p.m., Pacific
Time, on any date and earlier than 11:59 p.m., Pacific Time, on such date, (iii)
the Business Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (iv) actual receipt by the party to whom such
notice is required to be given.
(x) if to the Company:
-14-
CytRx Corporation
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ & ▇▇▇▇▇ Professional Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(y) if to any Purchaser:
At the address of such Purchaser set forth
on Exhibit A to this Agreement.
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice.
(h) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns
and shall inure to the benefit of the Holder and its successors and assigns. The
Company may not assign this Agreement or any of its respective rights or
obligations hereunder without the prior written consent of the Purchasers. Each
Purchaser may assign its rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.
(i) Assignment of Registration Rights. The rights of the Holder
hereunder, including the right to have the Company register for resale
Registrable Securities in accordance with the terms of this Agreement, shall be
assignable by each Holder to any transferee of the Holder of all or a portion of
the shares of Registrable Securities if: (i) the Holder agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (A) the name and address of such transferee or
assignee, and (B) the securities with respect to which such registration rights
are being transferred or assigned; (iii) following such transfer or assignment
the further disposition of such securities by the transferee or assignees is
restricted under the Securities Act and applicable state securities laws; (iv)
at or before the time the Company receives the written notice contemplated by
clause (ii) of this Section, the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions of this Agreement; and (v) such
transfer shall have been made in accordance with the applicable requirements of
the Purchase Agreement and shall be for no less than 10% of the Registrable
-15-
Securities. In addition, the Holder shall have the right to assign its rights
hereunder to any other Person with the prior written consent of the Company,
which consent shall not be unreasonably withheld, conditioned or delayed. The
rights to assignment shall apply to the Holder (and to subsequent) successors
and assigns. In the event of an assignment pursuant to this Section 8(i), the
Purchaser shall pay all incremental costs and expenses incurred by the Company
in connection with filing a Registration Statement (or an amendment to the
Registration Statement) to register the shares of Registrable Securities
assigned to any assignee or transferee of the Purchaser.
(j) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.
(k) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to
principles of conflicts of law thereof. This Agreement shall not be interpreted
or construed with any presumption against the party causing this Agreement to be
drafted.
(l) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(m) Termination. This Agreement shall terminate on the date on which
the Registrable Securities may be sold without restriction pursuant to Rule
144(k) of the Securities Act.
(n) Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable in any
respect, the remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and the parties hereto shall use their
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(o) Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
[Remainder of page intentionally left blank. Signature pages to follow.]
-16-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized persons as of the date first
indicated above.
CYTRX CORPORATION
By:
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
[SIGNATURES OF PURCHASERS TO FOLLOW ON NEXT PAGES.]
PURCHASERS:
---------------------------------
By:_____________________________
EXHIBIT A
---------
PURCHASERS
A-1
EXHIBIT B
PLAN OF DISTRIBUTION
We are registering the shares of common stock on behalf of the selling
stockholders. The common stock may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at prices related to
the prevailing market prices, at varying prices determined at the time of sale,
or at negotiated prices. These sales may be effected at various times in one or
more of the following transactions, or in other kinds of transactions:
o transactions on the NASDAQ Stock Market or on any national
securities exchange or U.S. inter-dealer system of a registered
national securities association on which the common stock and the
warrants may be listed or quoted at the time of sale;
o in the over-the-counter market;
o in private transactions and transactions otherwise than on these
exchanges or systems or in the over-the-counter market;
o in connection with short sales of the shares;
o by pledge to secure or in payment of debt and other obligations;
o through the writing of options, whether the options are listed on an
options exchange or otherwise;
o in connection with the writing of non-traded and exchange-traded
call options, in hedge transactions and in settlement of other
transactions in standardized or over-the-counter options; or
o through a combination of any of the above transactions.
The selling stockholders and their successors, including their
transferees, pledgees or donees or their successors, may sell the common stock
directly to purchasers or through underwriters, broker-dealers or agents, who
may receive compensation in the form of discounts, concessions or commissions
from the selling stockholders or the purchasers. These discounts, concessions or
commissions as to any particular underwriter, broker-dealer or agent may be in
excess of those customary in the types of transactions involved.
The selling stockholders also may engage in short sales against the box,
puts and calls and other transactions in our securities or derivatives of our
securities and may sell or deliver shares in connection with these trades.
In addition, any securities covered by this prospectus which qualify for
sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144
rather than pursuant to this prospectus.
B-1
The selling stockholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock from time to time under
this prospectus after we have filed an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act amending the list
of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus.
The selling stockholders also may transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this
prospectus and may sell the shares of common stock from time to time under this
prospectus after we have filed an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act amending the list
of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus.
The selling stockholders and any broker-dealers or agents that are
involved in selling the shares of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales. In such event, any commissions received by such broker-dealers or agents
and any profit on the resale of the shares of common stock purchased by them may
be deemed to be underwriting commissions or discounts under the Securities Act.
We entered into a registration rights agreement for the benefit of the
selling stockholders to register the common stock under applicable federal and
state securities laws. The registration rights agreement provides for
cross-indemnification of the selling stockholders and us and our respective
directors, officers and controlling persons against specific liabilities in
connection with the offer and sale of the common stock, including liabilities
under the Securities Act. We will pay substantially all of the expenses incurred
by the selling stockholders incident to the registration of the common stock.
The selling stockholders have advised us that they have not entered into
any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares of common stock, nor is there
an underwriter or coordinating broker acting in connection with a proposed sale
of shares of common stock by any selling stockholder. If we are notified by any
selling stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares of common stock, if required, we will file
a supplement to this prospectus. If the selling stockholders use this prospectus
for any sale of the shares of common stock, they will be subject to the
prospectus delivery requirements of the Securities Act.
The anti-manipulation rules of Regulation M under the Securities Exchange
Act may apply to sales of our common stock and activities of the selling
stockholders.
B-2
EXHIBIT C
---------
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[Name and address of Transfer Agent]
-----------------
-----------------
-----------------
Attn: ____________
Re: CytRx Corporation
Ladies and Gentlemen:
We are counsel to CytRx Corporation, a Delaware corporation (the
"COMPANY"), and have represented the Company in connection with that certain
Securities Purchase Agreement (the "PURCHASE AGREEMENT"), dated as of September
15, 2003, by and among the Company and the purchasers (the "PURCHASERS" and the
"HOLDERS") named therein pursuant to which the Company issued to the Purchasers
shares (the "SHARES") of its Common Stock, $0.001 par value. Pursuant to the
Purchase Agreement, the Company has also entered into a Registration Rights
Agreement with the Purchasers (the "REGISTRATION RIGHTS AGREEMENT"), dated as of
September 15, 2003, pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined in the Registration Rights
Agreement), including the Shares, under the Securities Act of 1933, as amended
(the "1933 ACT"). In connection with the Company's obligations under the
Registration Rights Agreement, on _________ __, 2003, the Company filed a
Registration Statement on Form S-3 (File No. 333-________) (the "REGISTRATION
STATEMENT") with the Securities and Exchange Commission (the "SEC") relating to
the resale of the Registrable Securities which names the Holders as selling
stockholders thereunder.
In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and, accordingly, the
Registrable Securities are available for resale under the 1933 Act in the manner
specified in, and pursuant to the terms of, the Registration Statement.
Very truly yours,
By:
cc: [PURCHASERS]
C-1