1
EXHIBIT 4.3
NEOGENE TECHNOLOGIES, INC.
REGISTRATION RIGHTS AGREEMENT
SEPTEMBER 21, 2000
2
TABLE OF CONTENTS
Page
----
1. Definitions; Registration Rights.................................................... 1
1.1 Definitions................................................................ 1
1.2 Company Registration....................................................... 3
1.3 Form S-3 Registration...................................................... 4
1.4 Obligations of the Company................................................. 4
1.5 Furnish Information........................................................ 6
1.6 Expenses of Registration................................................... 6
1.7 Delay of Registration...................................................... 6
1.8 Indemnification............................................................ 6
1.9 Reports Under Securities Exchange Act of 1934.............................. 9
1.10 Assignment of Registration Rights.......................................... 9
1.11 Market-Standoff Agreement.................................................. 10
1.12 Termination of Registration Rights......................................... 10
2. Miscellaneous....................................................................... 11
2.1 Entire Agreement........................................................... 11
2.2 Recapitalizations, Etc..................................................... 11
2.3 Successors and Assigns..................................................... 11
2.4 Amendments and Waivers..................................................... 11
2.5 Notices.................................................................... 11
2.6 Severability............................................................... 12
2.7 Delays or Omissions; Remedies Cumulative................................... 12
2.8 Attorney's Fees............................................................ 12
2.9 Governing Law.............................................................. 12
2.10 Counterparts............................................................... 12
2.11 Titles and Subtitles....................................................... 13
2.12 Aggregation of Stock....................................................... 13
2.13 Confidentiality............................................................ 13
2.14 Additional Parties......................................................... 13
2.15 Independent Nature of Holders' Obligations and Rights...................... ▇▇
-▇-
▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, INC.
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made as of
September 21, 2000, among NeoGene Technologies, Inc., a California corporation
(the "Company"), each of the parties identified on the signature page hereto as
a Purchaser (each a "Purchaser," and collectively, the "Purchasers"),
NeoTherapeutics, Inc., a Delaware corporation ("NeoTherapeutics"), and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, an individual ("Civelli"), ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, an individual
("▇▇▇▇▇▇▇▇▇") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, an individual ("▇▇▇▇▇▇▇▇▇▇"). Each of
NeoTherapeutics, Civelli, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ is referred to herein as a
"Founder".
RECITALS
The Company, NeoTherapeutics and the Purchasers are parties to a
Securities Purchase Agreement (the "Purchase Agreement") of even date herewith
pursuant to which the Company desires to sell to the Purchasers and the
Purchasers desire to purchase from the Company shares of the Company's Series A
Preferred Stock and warrants to purchase shares of the Common Stock of the
Company (the "Warrants"). A condition to the Purchasers' obligations under the
Purchase Agreement is that the Company and the Purchasers enter into this
Agreement in order to provide the Purchasers with certain rights to register
shares of the Company's Common Stock issuable upon (i) conversion of the Series
A Preferred Stock held by the Purchasers and (ii) exercise of the Warrants. The
Company and the Founders each desire to induce the Purchasers to purchase shares
of Series A Preferred Stock and the Warrants pursuant to the Purchase Agreement
by agreeing to the terms and conditions set forth herein.
AGREEMENT
The parties agree as follows:
1. DEFINITIONS; REGISTRATION RIGHTS.
1.1 DEFINITIONS. For purposes of this Agreement:
(a) "Board" means the Board of Directors of the
Company, as the same shall be constituted from time to time.
(b) "Common Stock" means the Common Stock no par
value of the Company.
(c) "Exempt Registration" means a registration
statement relating to the sale of securities by the Company pursuant to a stock
option, stock purchase or similar benefit plan or an SEC Rule 145 transaction or
any other registration statement that would not customarily provide for the sale
of secondary equity shares for cash.
4
(d) "Form S-3" means such form under the Securities
Act as in effect on the date hereof or any successor form under the Securities
Act that is intended to be used as a short form for the registration of
distributions of secondary shares.
(e) "Founders' Stock" means shares of Common Stock
held by NeoTherapeutics and shares of Common Stock issued to Civelli, ▇▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇▇▇▇ pursuant to those certain Restricted Stock Purchase Agreements
dated as of June 6, 2000.
(f) "Holder" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof in accordance
with Section 1.10 of this Agreement.
(g) "person" means any individual, corporation,
partnership, limited liability company, trust, business, association or
government or political subdivision thereof, governmental agency or other
entity.
(h) "Qualified IPO" means the firm commitment
underwritten public offering by the Company of shares of its Common Stock
pursuant to a registration statement on Form S-1 (or any successor form) under
the Securities Act, which results in aggregate gross cash proceeds to the
Company of $25,000,000, and that is based on a pre-money valuation of the
Company of at least $80,000,000.
(i) "Preferred Stock" means the Series A Preferred
Stock of the Company.
(j) "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act and the
declaration or ordering of effectiveness of such registration statement or
document.
(k) The term "Registrable Securities" means (i) the
shares of Common Stock issuable or issued upon conversion of the Preferred
Stock, (ii) shares of Common Stock issuable or issued upon exercise of the
Warrants, (iii) the Founders' Stock, (iv) any other shares of Common Stock of
the Company issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, the
shares listed in clauses (i), (ii), (iii) and this clause (iv); provided,
however, that the foregoing definition shall exclude in all cases any
Registrable Securities sold or transferred by a Holder in a transaction in which
such Holder's rights under this Agreement are not assigned. Notwithstanding the
foregoing, securities shall only be treated as Registrable Securities if and so
long as they have not been (A) sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction, or (B)
sold in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions, and restrictive legends with respect thereto, if any, are
removed upon the consummation of such sale.
(l) The number of shares of "Registrable Securities
then outstanding" shall equal the number of shares of Common Stock outstanding
which are, and the number of shares of Common Stock issuable pursuant to then
exercisable or convertible securities which are, Registrable Securities.
-2-
5
(m) "SEC" means the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(n) "Securities Act" means the Securities Act of
1933, as amended (the "Securities Act").
1.2 COMPANY REGISTRATION.
(a) INITIATION. If (but without any obligation to do
so) the Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Holders) any of its
stock in connection with the public offering of such securities solely for cash
(other than an Exempt Registration), the Company shall, at such time, promptly
give each Holder notice of such registration. Upon the written request of each
Holder given within 20 days after receipt by such Holder of the Company's
notice, the Company shall, subject to the provisions of Section 1.2(b), cause to
be registered all of the Registrable Securities that each such Holder has
requested to be registered.
(b) UNDERWRITTEN OFFERING. In connection with any
offering involving an underwriting of shares of the Company's capital stock, the
Company shall not be required under Section 1.2(a) to include any of the
Holders' securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it (or by other persons entitled to select the underwriters), and then only in
such quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by stockholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata (to the nearest 100 shares) among the
selling stockholders according to the total amount of securities entitled to be
included therein owned by each selling stockholder or in such other proportions
as shall mutually be agreed to by such selling stockholders) but in no event
shall any securities held by a Founder be included if any securities held by any
selling Holder are excluded. For purposes of the preceding apportionment, for
any participating Holder that is a partnership, limited liability company or
corporation, the partners, retired partners, members, retired members and
stockholders of such Holder, or the estates and family members of any such
partners, members, retired partners or members and any trusts for the benefit of
any of the foregoing persons shall be deemed to be a single "selling
stockholder," and any pro-rata reduction with respect to such "selling
stockholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all Persons included in such "selling stockholder,"
as defined in this sentence.
(c) RIGHT TO TERMINATE REGISTRATION. The Company
shall have the right to terminate or withdraw any registration initiated by it
under this Section 1.2 prior to the effectiveness of such registration whether
or not any Holder has elected to include Registrable Securities in such
registration.
-3-
6
1.3 FORM S-3 REGISTRATION. In case the Company shall receive
from any Holder or Holders of not less than twenty-five percent (25%) of the
Registrable Securities then outstanding a written request or requests that the
Company effect a registration on Form S-3 and any related qualification or
compliance with respect to all or a part of the Registrable Securities owned by
such Holder or Holders, the Company will:
(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders;
and
(b) as soon as practicable, effect such registration
and all such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written request
given within 15 days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 1.3: (i) if
Form S-3 is not available for such offering by the Holders; (ii) if the Holders,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $1,000,000; (iii) if the
Company shall furnish to the Holders a certificate signed by the President of
the Company stating that in the good faith judgment of the Board of Directors of
the Company, it would be seriously detrimental to the Company and its
shareholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than 60 days after receipt of
the request of the Holder or Holders under this Section 1.3; provided, however,
that the Company shall not utilize this right more than once in any twelve month
period; (iv) if the Company has, within the twelve (12) month period preceding
the date of such request, already effected two registrations on Form S-3 for the
Holders pursuant to this Section 1.3; (v) in any particular jurisdiction in
which the Company would be required to qualify to do business or to execute a
general consent to service of process in effecting such registration,
qualification or compliance; or (vi) during the period ending one hundred eighty
(180) days after the effective date of a registration statement subject to
Section 1.2.
(c) Subject to the foregoing, the Company shall file
a registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt of
the request or requests of the Holders.
1.4 OBLIGATIONS OF THE COMPANY. Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become effective.
-4-
7
(b) Prepare and file with the SEC 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 Securities Act.
(c) Furnish to the Holders such numbers of copies of
a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of such Registrable
Securities.
(d) Use its reasonable 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 the Holders, 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.
(e) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement with the
managing underwriter of such offering in usual and customary form and consistent
with the other provisions of this Agreement. Each Holder participating in such
underwriting shall also enter into and perform its obligations under such an
agreement.
(f) Promptly notify each Holder covered by the
registration statement at any time when the Company becomes aware of the
happening of any event as a result of which the registration statement or the
prospectus included in such registration statement or any supplement to the
prospectus (as then in effect) contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements there in (in
the case of the prospectus, in light of the circumstances under which they were
made) not misleading or, if for any other reason it shall be necessary during
such time period to amend or supplement the registration statement or the
prospectus in order to comply with the Securities Act, whereupon, in either
case, each Holder shall immediately cease to use such registration statement or
prospectus for any purpose and, as promptly as practicable thereafter, the
Company shall prepare and file with the SEC, and furnish without charge to the
appropriate Holders and managing underwriters, if any, a supplement or amendment
to such registration statement or prospectus which will correct such statement
or omission or effect such compliance and such copies thereof as the Holders and
any underwriters may reasonably request.
(g) Cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange or over-the-counter
market on which similar securities issued by the Company are then listed, if
applicable.
(h) Provide a transfer agent and registrar for such
Registrable Securities and a CUSIP number for all such Registrable Securities,
in each case not later than the effective date of such registration.
(i) Use its reasonable best efforts to furnish, at
the request of any Holder requesting registration of Registrable Securities
pursuant to this Section 1, on the date that such Registrable Securities are
delivered to the underwriters for sale in connection with a
-5-
8
registration pursuant to this Section 1, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a letter dated such date, from
the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities (to
the extent the then applicable standards of professional conduct permit said
letter to be addressed to the Holders).
1.5 FURNISH INFORMATION. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 1
with respect to the Registrable Securities of any selling Holder that such
Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities.
1.6 EXPENSES OF REGISTRATION.
(a) COMPANY REGISTRATION. All expenses other than
underwriting discounts and commissions incurred in connection with registrations
initiated pursuant to Section 1.2, including all registration, filing and
qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company, and the reasonable fees up to a maximum of $5,000 and
disbursements of one counsel for the selling Holders selected by Holders selling
a majority of the subject Registrable Securities with the approval of the
Company, which approval shall not be unreasonably withheld, shall be borne by
the Company.
(b) REGISTRATION ON FORM S-3. All expenses incurred
in connection with a registration requested pursuant to Section 1.3, including
(without limitation) all registration, filing, qualification, printers' and
accounting fees and the reasonable fees and disbursements of one counsel for the
selling Holder or Holders selected by them, and counsel for the Company shall be
borne by the Company, and any underwriters' discounts or commissions associated
with Registrable Securities, shall be borne pro rata by the Holder or Holders
participating in the Form S-3 Registration.
1.7 DELAY OF REGISTRATION. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
1.8 INDEMNIFICATION. In the event any Registrable Securities
are included in a registration statement under this Section 1:
(a) INDEMNIFICATION BY THE COMPANY. To the extent
permitted by law, the Company will indemnify and hold harmless each Holder, any
underwriter (as defined in
-6-
9
the Securities Act) for such Holder and each person, if any, who controls such
Holder or underwriter within the meaning of the Securities Act or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law; and the Company will pay to
each such Holder, underwriter or controlling person, as incurred, any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this subsection 1.8(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 shall not be unreasonably withheld), nor shall the Company be liable to
any Holder, underwriter or controlling person for any such loss, claim, damage,
liability, or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such Holder, underwriter or controlling person.
(b) INDEMNIFICATION BY THE HOLDERS. To the extent
permitted by law, each selling Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who has signed the
registration statement, each person, if any, who controls the Company within the
meaning of the Securities Act, any underwriter, any other Holder selling
securities in such registration statement and any controlling person of any such
underwriter or other Holder, against any losses, claims, damages, or liabilities
(joint or several) to which any of the foregoing persons may become subject,
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder expressly for
use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this Section 1.8(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this Section 1.8(b)
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
Holder, which consent shall not be unreasonably withheld; provided, that in no
event shall any indemnity under this Section 1.8(b) exceed the net proceeds from
the offering received by such Holder, except in the case of willful fraud by
such Holder.
(c) PROCEDURES. Promptly after receipt by an
indemnified party under this Section 1.8 of notice of the commencement of any
action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any
-7-
10
indemnifying party under this Section 1.8, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party (together with all other indemnified parties
which may be represented without conflict by one counsel) shall have the right
to retain one separate counsel, with the reasonable fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 1.8, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 1.8. 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. The
indemnity agreements contained in this Section 1.8 shall not apply to amounts
paid in settlement of any loss, claim, damage, liability or action if such
settlement is effected without the consent of the indemnifying party.
(d) CONTRIBUTION. If the indemnification provided for
in this Section 1.8 is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any loss, liability, claim,
damage or expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage, or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions that resulted
in such loss, liability, claim, damage or expense as well as any other relevant
equitable considerations; provided, that in no event shall any contribution by a
Holder under this Section 1.8(d) exceed the net proceeds from the offering
received by such Holder, except in the case of willful fraud by such Holder. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(e) UNDERWRITING AGREEMENT. Notwithstanding the
foregoing, to the extent that the provisions on indemnification and contribution
contained in the underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall control.
-8-
11
(f) SURVIVAL. The obligations of the Company and
Holders under this Section 1.8 shall survive the completion of any offering of
Registrable Securities in a registration statement under this Section 1, and
otherwise.
1.9 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 SEC 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 SEC Rule 144, at all times after the
effective date of the first registration statement filed by the Company for the
offering of its securities to the general public so long as the Company remains
subject to the periodic reporting requirements under Sections 13 or 15(d) of the
Exchange Act;
(b) file with the SEC in a timely manner all reports
and other documents as may be required of the Company under the Securities Act
and the Exchange Act; and
(c) furnish to any Holder, so long as the Holder owns
any Registrable Securities, forthwith upon request (i) a written statement by
the Company that it has complied with the reporting requirements of SEC Rule
144, the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), (ii) a copy of the most recent annual
or quarterly report of the Company and such other reports and documents so filed
by the Company, and (iii) such other information as may be reasonably requested
in availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
1.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause
the Company to register securities granted Holders under Sections 1.2 and 1.3
may be assigned to a transferee or assignee in connection with any transfer or
assignment of Registrable Securities by a Holder; provided, that (a) such
transfer may otherwise be effected in accordance with applicable securities laws
and restrictions on transfer agreed upon by the Holder and the Company
(including those set forth in the Purchase Agreement), (b) notice of such
assignment is given to the Company, (c) such transferee or assignee (i) is a
wholly-owned subsidiary or constituent partner, retired partner, member, retired
member or shareholder of such Holder, or (ii) is a spouse, ancestor or
descendant or (iii) is a trust for the benefit of such Holder or any spouse,
ancestor or descendant of such Holder, or (iv) acquires from such Holder at
least 50,000 Registrable Securities (as appropriately adjusted for stock splits
and the like) and (d) such transferee or assignee agrees to be bound by all
provisions of this Agreement. Notwithstanding the foregoing all assignees and
transferees of a Holder who acquire less than 50,000 Registrable Securities (as
appropriately adjusted for stock splits and the like) from such Holder shall
have a single attorney-in-fact for the purpose of exercising any rights,
receiving notices or taking any action under Section 1.
-9-
12
1.11 MARKET-STANDOFF AGREEMENT.
(a) MARKET-STANDOFF PERIOD; AGREEMENT. In connection
with the initial public offering of the Company's securities and upon request of
the Company or the underwriters managing such offering of the Company's
securities, each Holder hereby agrees not to sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of any securities of
the Company (other than any disposed of in the registration and those acquired
by the Holder in the registration or thereafter in open market transactions)
without the prior written consent of the Company or such underwriters, as the
case may be, for such period of time (not to exceed 180 days) from the effective
date of such registration as may be requested by the Company or such managing
underwriters and to execute an agreement reflecting the foregoing as may be
requested by the underwriters at the time of the Company's initial public
offering. In addition, the Holder agrees to be bound by similar restrictions,
and to sign a similar agreement, in connection with no more than one additional
registration statement filed after the closing date of the initial public
offering, provided, that the duration of the market-standoff period with respect
to such additional registration shall not exceed 90 days from the effective date
of such additional registration statement.
(b) LIMITATIONS. The obligations described in Section
1.11(a) shall apply only if all officers and directors of the Company and all
other persons with registration rights (whether or not pursuant to this
Agreement) enter into similar agreements. If the Company or the underwriter of
any public offering of the Company's securities waive or terminate any standoff
or lockup restrictions imposed on any holder of securities of the Company, then
such waiver or termination shall be granted to all Holders subject to standoff
or lockup restrictions pro rata based on the number of shares of Common Stock
beneficially held by such holder and the Holders. From and after the date of
this Agreement, the Company shall use its best efforts to ensure that all
holders of capital stock of the Company agree to be bound by terms substantially
similar to those set forth in this Section 1.11.
(c) STOP-TRANSFER INSTRUCTIONS. In order to enforce
the foregoing covenants, the Company may impose stop-transfer instructions with
respect to the securities of each Holder (and the securities of every other
person subject to the restrictions in Section 1.11(a)).
(d) TRANSFEREES BOUND. Each Holder agrees that it
will not transfer securities of the Company unless each transferee agrees in
writing to be bound by all of the provisions of this Section 1.11, provided that
this Section 1.11(d) shall not apply to transfers pursuant to a registration
statement or transfers after the 12-month anniversary of the effective date of
the Company's initial registration statement subject to this Section 1.11.
1.12 TERMINATION OF REGISTRATION RIGHTS. No Holder shall be
entitled to exercise any registration right provided for in this Section 1 after
the earlier of (i) three years following the consummation of a Qualified IPO, or
(ii) such time as Rule 144 or another similar exemption under the Securities Act
is available for the sale of all of such Holder's shares during a three-month
period without registration, without reference to Rule 144(k).
-10-
13
2. MISCELLANEOUS.
2.1 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof, and
any and all other written or oral agreements relating to the subject matter
hereof existing among any of the parties hereto are expressly canceled.
2.2 RECAPITALIZATIONS, ETC. The provisions of this Agreement
(including any calculation of share ownership) shall apply, to the full extent
set forth herein with respect to the Registrable Securities and to the Common
Stock, to any and all shares of capital stock of the Company or any capital
stock, partnership or member units or any other security evidencing ownership
interests in any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) that may be issued in respect of, in
exchange for, or in substitution of the Common Stock by reason of any stock
dividend, split, combination, recapitalization, liquidation, reclassification,
merger, consolidation or otherwise.
2.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided in
this Agreement, and subject to the restriction on transfer set forth in the
Purchase Agreement, the terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective permitted successors and
assigns of the parties (including transferees of any of the Preferred Stock or
any Common Stock issued upon conversion thereof). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
2.4 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended or waived only with the written consent of the Company and the holders
of at least a majority of the Registrable Securities then outstanding. The
Purchasers and their successors and assigns acknowledge that by operation of
this Section 2.4, the holders of at least a majority of the then outstanding
Registrable Securities, when acting together with the Company, will have the
right and power to diminish or eliminate any rights or increase any or all
obligations under this Agreement.
2.5 NOTICES. Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient upon delivery, when
delivered personally or by overnight courier or sent by telegram or fax, or
forty-eight (48) hours after being deposited in the U.S. mail, as certified or
registered mail, with postage prepaid, addressed (a) if to the Company or
NeoTherapeutics, to ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Chief Financial Officer or via facsimile to (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, or via facsimile to (▇▇▇) ▇▇▇-▇▇▇▇, (b)
if to a Founder other than NeoTherapeutics, to such party's address or fax
number set forth on the signature pages hereto, or (c) if to Purchaser, to such
party's address or fax number set forth on the signature page hereto, with a
copy to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
-11-
14
2.6 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. Until the parties have agreed upon an
enforceable replacement for such provision, (a) such provision shall be excluded
from this Agreement, (b) the balance of the Agreement shall be interpreted as if
such provision were so excluded and (c) the balance of the Agreement shall be
enforceable in accordance with its terms.
2.7 DELAYS OR OMISSIONS; REMEDIES CUMULATIVE. No delay or
omission to exercise any right, power or remedy accruing to any party under this
Agreement, upon any breach or default of any other party under this Agreement,
shall impair any such right, power or remedy of such non-breaching or
non-defaulting party nor shall it be construed to be a waiver of any such breach
or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.
2.8 ATTORNEY'S FEES. If any action at law or in equity
(including arbitration) is necessary to enforce or interpret the terms of any
this Agreement, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
2.9 GOVERNING LAW. The corporate laws of the State of
California shall govern all issues concerning the relative rights of the Company
and its shareholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. The Company
and each Purchaser hereby irrevocably submit to the exclusive jurisdiction of
the state and federal courts sitting in the City of New York, borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, or that such suit, action or proceeding is improper. Each of the
Company and each Purchaser hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by
receiving a copy thereof sent to the Company at the address in effect for
notices to it under this instrument and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.
2.10 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-12-
15
2.11 TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
2.12 AGGREGATION OF STOCK. All shares of Company stock held or
acquired by affiliated Persons (including former and current partners, former
and current members and former and current stockholders) shall be aggregated
together for the purpose of determining the availability of any rights under
this Agreement.
2.13 CONFIDENTIALITY. Each Holder agrees that, except with the
prior written permission of the applicable party, it shall at all times keep
confidential and not divulge, furnish or make accessible to anyone any
confidential information, knowledge or data concerning or relating to the
business or financial affairs of the Company or any other party to which such
Holder has been or shall become privy by reason of this Agreement. The
provisions of this Section 2.13 shall be in addition to, and not in substitution
for, the provisions of any separate nondisclosure agreement executed by the
parties hereto with respect to the transactions contemplated hereby.
2.14 ADDITIONAL PARTIES. Persons who become "Purchasers" of
the Company's Series A Preferred Stock after the effective date of this
Agreement pursuant to and in accordance with the Purchase Agreement and who
execute signature pages to this Agreement shall become parties hereto, and no
consent or waiver of any other party hereto, other than the Company, shall be
required to add any such additional party.
2.15 INDEPENDENT NATURE OF HOLDERS' OBLIGATIONS AND RIGHTS.
The obligations of each Holder hereunder is several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible in
any way for the performance of the obligations of any other Holder hereunder.
Nothing contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto, shall be
deemed to constitute the Holders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Holders
are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Holder shall be entitled to
protect and enforce its rights, including without limitation the rights arising
out of this Agreement, and it shall not be necessary for any other Holder to be
joined as an additional party in any proceeding for such purpose.
[Signature Page Follows]
-13-
16
The parties have executed this Registration Rights Agreement as of the
date first above written.
COMPANY: PURCHASERS:
NEOGENE TECHNOLOGIES, INC. MONTROSE INVESTMENTS LTD.
By: By:
----------------------------------------- -------------------------------------
, President Name:
------------------------------ -------------------------------------
Title:
-------------------------------------
FOUNDERS: Address:
Montrose Investments Ltd.
NEOTHERAPEUTICS, INC. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
By: Attn: ▇▇▇▇ ▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Executive Officer
STRONG RIVER INVESTMENTS, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By:
-------------------------------------
Address: Name:
----------------------------------- -------------------------------------
Title:
----------------------------------- -------------------------------------
-----------------------------------
Fax: Address:
-----------------------------------
Strong River Investments, Inc.
▇/▇ ▇▇▇▇▇▇▇▇-▇▇▇▇ ▇ ▇▇▇▇▇▇ (▇▇▇) ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Cay I, ▇▇▇▇▇▇▇▇▇▇ Plaza
-------------------------------------------- P.O. Box 873
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Road Town, Tortolla, BVI
Address:
----------------------------------- Facsimile:
---------------------------------
-----------------------------------
-----------------------------------
Fax:
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Address:
-----------------------------------
-----------------------------------
-----------------------------------
Fax:
-----------------------------------