EXHIBIT 4.1
INVESTOR RIGHTS AGREEMENT
This Investor Rights Agreement (this "Agreement") is made and entered
into as of April 20, 2004 among Spectrum Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and each of the purchasers executing this Agreement
and listed on Schedule 1 attached hereto (collectively, the "Purchasers").
This Agreement is being entered into pursuant to the Common Stock and
Warrant Purchase Agreement, dated as of the date hereof, by and among the
Company and the Purchasers (the "Purchase Agreement").
The Company and the Purchasers hereby agree as follows:
1. Definitions.
Capitalized terms used and 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:
"Advice" shall have the meaning set forth in Section 3(m).
"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 of "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
"August 2003 Financing Registration Rights Agreement" means the
Registration Rights Agreement, dated as of August 12, 2003, by and among the
Company and each of the persons listed on Schedule 1 attached thereto, and
certain other persons set forth therein.
"Blackout Period" shall have the meaning set forth in Section 3(n).
"Board" shall have the meaning set forth in Section 3(n).
"Business Day" means any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of Texas generally are authorized or required by law or other government
actions to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's Common Stock, par value $0.001 per
share.
"Effectiveness Deadline" means the date that is one hundred and
twenty (120) days after the Closing Date.
"Effectiveness Period" shall have the meaning set forth in Section 2.
"Event" shall have the meaning set forth in Section 7(e).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Filing Date" means the 30th day following the Closing Date.
"Holder" or "Holders" means the holder or holders, as the case may
be, from time to time of Registrable Securities, including without limitation
the Purchasers and their assignees.
"Indemnified Party" shall have the meaning set forth in Section 5(c).
"Indemnifying Party" shall have the meaning set forth in Section
5(c).
"Losses" shall have the meaning set forth in Section 5(a).
"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 any Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted 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 such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference in such Prospectus.
"Purchased Shares" means the shares of Common Stock purchased by the
Purchasers pursuant to the Purchase Agreement.
"Registrable Securities" means (a) the Purchased Shares and the
Warrant Shares (without regard to any limitations on beneficial ownership
contained in the Purchase Agreement or Warrants) or other securities issued or
issuable to each Purchaser or its transferee or designee (i) upon exercise of
the Warrants, or (ii) upon any distribution with respect to, any exchange for or
any replacement of such Purchased Shares or Warrants or (iii) upon any
conversion, exercise or exchange of any securities issued in connection with any
such distribution, exchange or replacement; (b) securities issued or issuable
upon any stock split, stock dividend, recapitalization or similar event with
respect to the foregoing; and (c) any other security issued as a dividend or
other distribution with respect to, in exchange for, in replacement or
redemption of, or in reduction of the liquidation value of,
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any of the securities referred to in the preceding clauses; provided, however,
that such securities shall cease to be Registrable Securities when such
securities have been sold pursuant to a Registration Statement, pursuant to Rule
144 or to or through a broker or dealer or underwriter in a public distribution
or a public securities transaction or when such securities may be sold without
any restriction pursuant to Rule 144(k).
"Registration Statement" means the registration statements and any
additional registration statements contemplated by Section 2, including (in each
case) 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.
"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.
"Securities Act" means the Securities Act of 1933, as amended.
"Series D Registration Rights Agreement" means the Registration
Rights Agreement, dated as of May 7, 2003, by and among the Company and certain
holders of the Company's Series D 8% Cumulative Convertible Voting Preferred
Stock, and certain other persons, as amended.
"Series E Registration Rights Agreement" means the Registration
Rights Agreement, dated as of September 26, 2003, by and among the Company and
certain holders of the Company's Series E Convertible Voting Preferred Stock,
and certain other persons.
"Special Counsel" means Wiggin and Dana LLP.
"Warrant Shares" means the shares of Common Stock issuable upon the
exercise of the warrants (including, without limitation, the Placement Agent
Warrants) issued or to be issued to the Purchasers or their assignees or
designees in connection with the offering consummated under the Purchase
Agreement.
2. Registration. As soon as reasonably practicable following the
Closing Date (but not later than the Filing Date), the Company shall prepare and
file with the Commission a "shelf" Registration Statement covering all
Registrable Securities for a secondary or resale
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offering to be made on a continuous basis pursuant to Rule 415. The Registration
Statement shall be on Form S-3 (or if such form is not available to the Company
on another form appropriate for such registration in accordance herewith).
Subject to Section 3(n) below, the Company shall use its best efforts to cause
the Registration Statement to be declared effective under the Securities Act not
later than the Effectiveness Deadline (including filing with the Commission a
request for acceleration of effectiveness in accordance with Rule 461
promulgated under the Securities Act within five (5) Business Days after the
date that the Company is notified (orally or in writing, whichever is earlier)
by the Commission that a Registration Statement will not be "reviewed," or not
be subject to further review and the effectiveness of the Registration Statement
may be accelerated) and to keep such Registration Statement continuously
effective under the Securities Act until such date as is the earlier of (x) the
date when all Registrable Securities covered by such Registration Statement have
been sold or (y) with respect to any Holder, such time as all Registrable
Securities held by such Holder may be sold without any restriction pursuant to
Rule 144(k) (the "Effectiveness Period"). Such Registration Statement also shall
cover, to the extent allowable under the Securities Act and the Rules
promulgated thereunder (including Securities Act Rule 416), such indeterminate
number of additional shares of Common Stock resulting from stock splits, stock
dividends or similar transactions with respect to the Registrable Securities.
If, after the first filing of a Registration Statement under this Agreement, the
Commission advises the Company that any Registrable Securities may not be
included in such Registration Statement on Form S-3 ("Delayed Securities"), then
the Company shall not be in breach of any provision of this Agreement or subject
to liquidated damages pursuant to Section 7(e) or Section 7(f) for the failure
to include such Delayed Securities in such Registration Statement. The Company
shall prepare and file a Registration Statement and related Prospectus effecting
the registration of the Delayed Securities as soon as reasonably practicable
after it is permitted to do so on Form S-3 under the Securities Act and the
rules and regulations of the Commission. If the Company is not permitted to
register the Delayed Securities on Form S-3 such that the Registration Statement
with respect to the Delayed Securities is effective prior to the first
anniversary of the Closing Date, then Company shall effect the registration of
the Delayed Securities no later than such first anniversary by preparing and
filing a Registration Statement on any form as may be necessary to cause the
registration of such Delayed Securities to become effective no later than such
anniversary.
3. Registration Procedures.
In connection with the Company's registration obligations hereunder,
the Company shall:
(a) Prepare and file with the Commission on or prior to the Filing
Date, a Registration Statement on Form S-3 (or if such form is not available to
the Company on another form appropriate for such registration in accordance
herewith) (which shall include a Plan of Distribution substantially in the form
of Exhibit A attached hereto), and 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, the
Company shall (i) furnish to the Special Counsel, copies of all such documents
proposed
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to be filed, which documents (other than those incorporated by reference) will
be subject to the review of such Special Counsel, and (ii) at the request of any
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 counsel to such Holders, 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 which the Holders of a majority of the Registrable
Securities or the Special Counsel shall reasonably object in writing within
three (3) Business Days after their receipt thereof. In the event of any such
objection, the Holders shall provide the Company with any requested revisions to
such prospectus or supplement within two (2) Business Days of such objection,
and any time limits applicable to the Company under this Agreement, including
the Filing Date and the Effectiveness Deadline shall be extended by the amount
of time elapsing between such objection and the receipt by the Company of such
requested revisions.
(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 and to the extent
any Registrable Securities are not included in such Registration Statement for
reasons other than the failure of the Holder to comply with Section 3(m) hereof,
shall prepare and file with the Commission such amendments to the Registration
Statement or such additional Registration Statements in order to register for
resale under the Securities Act all 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 as promptly as possible, and in no event later than fifteen (15)
Business Days to any comments received from the Commission with respect to the
Registration Statement or any amendment thereto and as promptly as reasonably
possible provide the Holders 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 Effectiveness Period in accordance with the
intended methods of disposition by the Holders thereof set forth in the
Registration Statement as so amended or in such Prospectus as so supplemented.
(c) Notify Holders of Registrable Securities to be sold and the
Special Counsel as promptly as possible (i) when a Prospectus or any Prospectus
supplement or post-effective amendment to the Registration Statement is proposed
to be filed (but in no event in the case of this clause (i), less than three (3)
Business Days prior to date of such filing); (ii) 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
(iii) with respect to the Registration Statement or any post-effective
amendment, when the same has become effective, and after the effectiveness
thereof: (A) 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; (B) of the issuance by
the Commission of any stop order suspending the
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effectiveness of the Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose;
(C) 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 (D) if the financial
statements included in the Registration Statement become ineligible for
inclusion therein or 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. Without limitation to any remedies to which the
Holders may be entitled under this Agreement, if any of the events described in
Section 3(c)(iii)(A), 3(c)(iii)(B) and 3(c)(iii)(C) occur, the Company shall use
its reasonable best efforts to respond to and correct the event.
(d) Use its reasonable best efforts to avoid the issuance of, or, if
issued, use reasonable best efforts to 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 jurisdiction, at the earliest practicable
time.
(e) If requested by any Holder of Registrable Securities, (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 each Holder and the Special Counsel, without charge,
at least one conformed copy of each Registration Statement and each amendment
thereto, including financial statements and schedules, 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 each Holder and the Special Counsel, without
charge, as many copies of the 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 each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto in conformity
with the requirements of the Securities Act.
(h) Prior to any public offering of Registrable Securities, use its
best efforts to register or qualify or cooperate with the selling Holders and
the Special Counsel in
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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 any Holder 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 the Company to
general service of process in any jurisdiction where it is not then so subject
or subject the Company to any material tax in any such jurisdiction where it is
not then so subject.
(i) Cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold
pursuant to a Registration Statement, which certificates shall be free, to the
extent permitted by applicable law and the Purchase Agreement, of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any Holder may request at least
two (2) Business Days prior to any sale of Registrable Securities. In connection
therewith, if required by the Company's transfer agent, the Company shall
promptly after the effectiveness of the Registration Statement cause an opinion
of counsel as to the effectiveness of the Registration Statement to be delivered
to and maintained with its transfer agent, together with any other
authorizations, certificates and directions required by the transfer agent,
which authorize and direct the transfer agent to issue such Registrable
Securities without legend upon sale by the Holder of such shares of Registrable
Securities under the Registration Statement.
(j) Following the occurrence of any event contemplated by Section
3(c)(iii)(D), as promptly as possible, 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 reasonable best efforts to cause all Registrable Securities
covered by such Registration Statement to be listed on every United States
securities exchange, quotation system, market or over-the-counter bulletin
board, if any, on which securities of the same class issued by the Company are
then listed.
(l) Comply in all material respects with all applicable rules and
regulations of the Commission and make generally available to its security
holders earnings statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 not later than 45 days after the end of any 3-month
period (or 90 days after the end of any 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.
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(m) (i) Request each selling Holder to furnish to the Company
information regarding such Holder and the distribution of such
Registrable Securities as is required by law or the Commission to be
disclosed in the Registration Statement, including any Prospectus,
Prospectus supplement or amended Registration Statement, and the
Company may exclude from such registration the Registrable Securities
of any such Holder who fails to furnish such information within a
reasonable time prior to the filing of each Registration Statement,
supplemented Prospectus and/or amended Registration Statement.
(ii) If the Registration Statement refers to any Holder by
name or otherwise as the holder of any securities of the Company,
then such Holder shall have the right to require (if such reference
to such Holder by name or otherwise is not required by the Securities
Act or any similar federal statute or rule or regulation of the
Commission then in force) the deletion of the reference to such
Holder in any amendment or supplement to the Registration Statement
filed or prepared subsequent to the time that such reference ceases
to be required.
(iii) Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the
Company of the occurrence of any event of the kind described in
Section 3(c)(iii)(A), 3(c)(iii)(B), 3(c)(iii)(C), 3(c)(iii)(D), or
3(n), such Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until such
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 (the "Advice") 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. The Company may provide stop
orders to enforce the provisions of this paragraph, provided that the
Company shall promptly remove any such stop orders when such stop
orders are no longer required.
(n) 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, notwithstanding anything to the contrary
in this Agreement or the Purchase Agreement, the Company may postpone or suspend
filing or effectiveness of a registration statement for a period not to exceed
30 consecutive days, provided that the Company may not postpone or suspend its
obligation under this Section 3(n) for more than 60 days in the aggregate during
any 12 month period (each, a "Blackout Period"). The Filing Date and the
Effectiveness Deadline shall be delayed for the duration of any Blackout Period
in compliance with this Section 3(n).
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4. Registration Expenses.
All 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, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
NASDAQ SmallCap Market and each other securities exchange, quotation system,
market or over-the-counter bulletin board 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 (including, without limitation, reasonable and documented fees and
disbursements of Special Counsel in connection with Blue Sky qualifications of
the Registrable Securities and determination of the eligibility of the
Registrable Securities for investment under the laws of such jurisdictions as
the Holders of a majority of Registrable Securities may designate)), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities and of printing or photocopying
prospectuses), (iii) messenger, telephone and delivery expenses, (iv) Securities
Act liability insurance, if the Company so desires such insurance, (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, in
the case of an underwritten offering, the expenses of any comfort letters or
costs associated with the delivery by independent public accountants of a
comfort letter or comfort letters if requested by any underwriter) and legal
counsel, and (vi) reasonable and documented fees and expenses of the Special
Counsel in connection with any Registration Statement hereunder. 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, the fees and expenses incurred in connection with the listing
of the Registrable Securities on any securities exchange as required hereunder.
5. Indemnification.
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, the 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 of each of them, each Person who controls any such Holder (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, to the fullest extent permitted by applicable law, from and against any
and all losses, claims, damages, liabilities, costs (including, without
limitation, costs of preparation and 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 or incorporated by
reference in the Registration Statement, any Prospectus or any form of
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prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, 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
amendment or supplement thereto, in the light of the circumstances under which
they were made) not misleading, except to the extent, but only to the extent,
that (i) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, which information was reasonably relied on by the
Company for use therein or to the extent that such information relates to (x)
such Holder and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form of
prospectus or in any amendment or supplement thereto or (y) such Holder's
proposed method of distribution of Registrable Securities as set forth in
Exhibit A (or as such Holder otherwise informs the Company in writing); or (ii)
in the case of an occurrence of an event of the type described in Section
3(c)(iii)(B), 3(c)(iii)(C), 3(c)(iii)(D) or 3(n), such Losses arise solely out
of or are based solely upon the use by a Holder of an outdated or defective
Prospectus after the delivery to the Holder of written notice from the Company
that the Prospectus is outdated or defective and prior to the receipt by such
Holder of the Advice contemplated in Section 3(m); provided, however, that the
indemnity agreement contained in this Section 5(a) shall not apply to amounts
paid in settlement of any Losses if such settlement is effected without the
prior written consent of the Company, which consent shall not be unreasonably
withheld. The Company shall notify the Holders 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 5(c) of this Agreement)
and shall survive the transfer of the Registrable Securities by the Holders.
(b) Indemnification by Holders. Each Holder 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 and employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising solely out of or based solely upon (i) any untrue statement of
a material fact contained in the Registration Statement, any Prospectus, or any
form of prospectus, or in any amendment or supplement thereto, or arising solely
out of or based solely upon any 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 (A) such untrue statement or omission is contained in
or omitted from any information so furnished in writing by such Holder to the
Company specifically for inclusion in the Registration Statement or such
Prospectus and that such information was reasonably relied upon by the Company
for use in the Registration Statement, such Prospectus, or in any amendment or
supplement thereto, or (B) such information relates to (x) such Holder and was
reviewed and expressly approved in writing by such Holder expressly for use in
the Registration Statement, such Prospectus, or such form of prospectus or in
any amendment or supplement thereto or (y) such Holder's proposed method of
distribution of Registrable Securities as set forth in Exhibit A (or as
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such Holder otherwise informs the Company in writing) or (ii) in the case of an
occurrence of an event of the type described in Section 3(c)(iii)(B),
3(c)(iii)(C), 3(c)(iii)(D) or 3(n), the use by a Holder of an outdated or
defective Prospectus after the delivery to the Holder of written notice from the
Company that the Prospectus is outdated or defective and prior to the receipt by
such Holder of the Advice contemplated in Section 3(m); provided, however, that
the indemnity agreement contained in this Section 5(b) shall not apply to
amounts paid in settlement of any Losses if such settlement is effected without
the prior written consent of the Holder, which consent shall not be unreasonably
withheld. Notwithstanding anything to the contrary contained herein, the Holder
shall be liable under this Section 5(b) for only that amount as does not exceed
the net proceeds to such 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 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 have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all reasonable 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 proximately and materially 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 has agreed in writing to pay such
fees and expenses; (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 reasonable
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. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, 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 and does not impose any monetary or other obligation or
restriction on the Indemnified Party.
11
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, which notice shall be delivered no more frequently than on a
monthly basis (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).
(d) Contribution. If a claim for indemnification under Section 5(a)
or 5(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 5(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 in
this Section was available to such party in accordance with its terms.
Notwithstanding anything to the contrary contained herein, the Holder shall be
required to contribute under this Section 5(d) for only that amount as does not
exceed the net proceeds to such Holder as a result of the sale of Registrable
Securities pursuant to such Registration Statement.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(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. The indemnity and contribution agreements herein are in
addition to and not in diminution or limitation of any indemnification
provisions under the Purchase Agreement.
12
6. Rule 144.
As long as any Holder owns Purchased Shares, Warrants or Warrant
Shares, 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. As long as any Holder owns Purchased Shares, Warrants or
Warrant Shares, 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
Holders 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 any Holder
may reasonably request, all to the extent required from time to time to enable
such Person to sell Purchased 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 compliance with the
provisions of the Purchase Agreement relating to the transfer of the Purchased
Shares and Warrant Shares. 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.
7. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a Holder,
of any of their obligations under this Agreement, each 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 each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason 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. Except as otherwise disclosed in the
Purchase Agreement, neither the Company nor any of its subsidiaries is a party
to an agreement currently in effect, nor shall the Company or any of its
subsidiaries, 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 Holders in this Agreement or otherwise conflicts with the provisions hereof.
Without limiting the generality of the foregoing, without the written consent of
the Holders of a majority of the then outstanding Registrable Securities, 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 unless the
rights so granted are subject in all respects to the rights of the Holders set
forth herein, and are not otherwise in conflict with the provisions of this
Agreement.
(c) Notice of Effectiveness. Within two (2) Business Days after the
Registration Statement which includes the Registrable Securities is ordered
effective by the Commission,
13
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 Holders 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 B.
(d) Piggy-Back Registrations. Subject to the limitations imposed
under the Series D Registration Rights Agreement, the August 2003 Financing
Registration Rights Agreement and the Series E Registration Rights Agreement, if
at any time when there is not an effective Registration Statement covering all
of the Registrable Securities, the Company shall determine to prepare and file
with the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or its then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, the Company shall send to each Holder of Registrable Securities
written notice of such determination and, if within seven (7) Business Days
after receipt of such notice, any such Holder shall so request in writing (which
request shall specify the Registrable Securities intended to be disposed of by
the Holder), the Company will cause the registration under the Securities Act of
all Registrable Securities which the Company has been so requested to register
by the Holder, to the extent required to permit the disposition of the
Registrable Securities so to be registered, provided that if at any time after
giving written notice of its intention to register any securities and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to such Holder and, thereupon, (i) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay expenses in accordance with Section 4 hereof),
and (ii) in the case of a determination to delay registering, shall be permitted
to delay registering any Registrable Securities being registered pursuant to
this Section 7(d) for the same period as the delay in registering such other
securities. The Company shall include in such registration statement all or any
part of such Registrable Securities such Holder requests to be registered. In
the case of an underwritten public offering, if the managing underwriter(s) or
underwriter(s) should reasonably object to the inclusion of the Registrable
Securities in such registration statement, then if the Company after
consultation with the managing underwriter should reasonably determine that the
inclusion of such Registrable Securities, would materially adversely affect the
offering contemplated in such registration statement, and based on such
determination recommends inclusion in such registration statement of fewer or
none of the Registrable Securities of the Holders, then (x) the number of
Registrable Securities of the Holders included in such registration statement
shall be reduced pro-rata among such Holders (based upon the number of
Registrable Securities requested to be included in the registration), if the
Company after consultation with the underwriter(s) recommends the inclusion of
fewer Registrable Securities, or (y) none of the Registrable Securities of the
Holders shall be included in such registration statement, if the Company after
consultation with the underwriter(s) recommends the inclusion of none of such
Registrable Securities; provided, however, that if
14
securities are being offered for the account of other persons or entities as
well as the Company, such reduction shall not represent a greater fraction of
the number of Registrable Securities intended to be offered by the Holders than
the fraction of similar reductions imposed on such other persons or entities
(other than the Company). The right of any holder to participate in an
underwritten public offering hereunder shall be conditioned upon such Holder's
entering into the underwriting agreement and lock-up agreement with the
representative of the underwriter or underwriters on the same terms as required
of other selling securities holders in such offering that are not affiliated
with the Company.
(e) Failure to File Registration Statement and Other Events. The
Company and the Holders agree that the Holders will suffer damages if the
Registration Statement is not filed on or prior to the thirtieth (30th) day
following the Closing Date and maintained in the manner contemplated herein
during the Effectiveness Period. The Company and the Holders 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
Filing Date (as such Filing Date may be delayed pursuant to Section 3(n)), or
(ii) the Company fails to file with the Commission a request for acceleration in
accordance with Rule 461 promulgated under the Securities Act within five (5)
Business Days of the date that the Company is notified (orally or in writing,
whichever is earlier) by the Commission that a Registration Statement will not
be "reviewed," or not subject to further review and effectiveness of the
Registration Statement may be accelerated (except to the extent that such
effectiveness may be delayed pursuant to Section 3(n)), or (iii) trading in the
Common Stock shall be suspended or if the Common Stock is delisted from the
NASDAQ SmallCap Market or any other securities exchange, quotation system,
market or over-the-counter bulletin board on which Registrable Securities are
required hereunder to be listed (each an "Exchange"), without immediately being
listed on any other Exchange, for any reason for more than one (1) Business Day,
other than pursuant to Section 3(n), or (iv) the rights of the Holders to
exercise into Warrant Shares are suspended for any reason without the consent of
the particular Holder other than as set forth in the Purchase Agreement or the
Warrant (any such failure or breach being referred to as an "Event"), the
Company shall pay in cash as liquidated damages for such failure and not as a
penalty to each Holder an amount equal to one percent (1%) of the purchase price
paid by such Holder for Purchased Shares and Warrants purchased pursuant to the
Purchase Agreement and then held by such Holder for the initial thirty (30) day
period until the applicable Event has been cured, which shall be pro rated for
such periods less than thirty (30) days, and for each subsequent thirty (30) day
period until the applicable Event has been cured which shall be pro rated for
such periods less than thirty days (the "Periodic Amount"). Payments to be made
pursuant to this Section 7(e) shall be due and payable immediately upon demand
in immediately available cash funds, provided that a demand by each Holder for
payment of the Periodic Amount shall not be made more frequently than once every
thirty (30) days. The parties agree that the Periodic Amount represents 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 Holders if any
Event as described herein has occurred. Notwithstanding the foregoing, the
Company shall remain obligated to cure the breach or correct the condition that
caused the Event, and the Holder shall have the right to take any action
necessary or desirable to enforce such obligation.
15
(f) Failure of Registration Statement to Become Effective. The
Company and the Holders agree that the Holders will suffer damages if the
Registration Statement is not declared effective on or prior to the one hundred
and twentieth (120th) day following the Closing Date. The Company and the
Holders further agree that it would not be feasible to ascertain the extent of
such damages with precision. Accordingly, if the Registration Statement is not
declared effective on or before the date that is thirty (30) days after the
Effectiveness Deadline (as such Effectiveness Deadline may be delayed pursuant
to Section 3(n)), the Company shall pay in cash as liquidated damages for such
failure and not as a penalty to each Holder an amount equal to (i) one percent
(1%) of the purchase price paid by such Holder for the Purchased Shares and
Warrants purchased pursuant to the Purchase Agreement and (ii) one percent (1%)
of the purchase price paid by such Holder for the Purchased Shares and Warrants
purchased pursuant to the Purchase Agreement and then held by such Holder for
each subsequent thirty (30) day period (which shall be pro rated for such
periods less than thirty (30) days) until either (x) the Registration Statement
is declared effective or (y) the twelfth (12th) month after the Closing Date has
ended. Payments to be made pursuant to this Section 7(f) shall be due and
payable immediately upon demand in immediately available cash funds, provided
that a demand by each holder for payment of such amounts shall not be made more
frequently than once every thirty (30) days. The parties agree that the amounts
set forth in this Section 7(f) 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 Holders if the Registration Statement is not declared
effective on or prior to the one hundred and twentieth (120th) day following the
Closing Date. At any time that amounts continue to accrue pursuant to Section
7(e), such amounts shall be credited against any amounts that simultaneously
accrue pursuant to this Section 7(f) such that the Company shall in no event be
obligated to make any payments under this Section 7(f) with respect to any
period for which it is obligated to pay the Periodic Amount under Section 7(e).
Notwithstanding the foregoing, the Company shall remain obligated to cause the
Registration Statement to become effective, and the Holders shall have the right
to take any action necessary or desirable to enforce this obligation.
(g) Specific Enforcement, Consent to Jurisdiction.
(i) The Company and the Holders acknowledge and agree that
irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions
hereof, this being in addition to any other remedy to which any of
them may be entitled by law or equity.
(ii) Each of the Company and the Holders (i) hereby
irrevocably submits to the exclusive jurisdiction of the state and
federal courts located in New York City, New York for the purposes of
any suit, action or proceeding arising out of or relating to this
Agreement and (ii) hereby waives, and agrees not to assert in any
such suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding
16
is improper. Each of the Company and the Holders consents to process
being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing in
this Section 7(g) shall affect or limit any right to serve process in
any other manner permitted by law.
(h) 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 Holders of at least a majority of the Registrable Securities.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders and that does not directly or indirectly affect the rights of other
Holders may be given by Holders of the Registrable Securities to which such
waiver or consent relates; provided, however, that the provisions of this
sentence may not be amended, modified, or supplemented except in accordance with
the provisions of the immediately preceding sentence.
(i) 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., New York
City time, on a Business Day, (ii) the next Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Business Day
or later than 5:00 p.m., New York City time, on any date and earlier than 11:59
p.m., New York City time, on such date, (iii) the Business Day following the
date of mailing, if sent by nationally recognized overnight courier service such
as Federal Express or (iv) actual receipt by the party to whom such notice is
required to be given. The addresses for such communications shall be with
respect to each Holder at its address set forth under its name on Schedule 1
attached hereto, or with respect to the Company, addressed to:
Spectrum Pharmaceuticals, Inc.
157 Technology Drive
Irvine, California 92618
Attention: CEO
Facsimile No.: (949) 788-6706
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. Copies of notices to the Company shall be sent to:
Latham & Watkins LLP
650 Town Center Drive, Suite 2000
Costa Mesa, California 92626
Attention: Alan W. Pettis, Esq.
Facsimile No.: (714) 755-8290
Copies of notices to any Holder shall be sent to the addresses, if any, listed
on Schedule 1
17
attached hereto.
(j) 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 each Holder and its successors and assigns;
provided, that the Company may not assign this Agreement or any of its rights or
obligations hereunder without the prior written consent of each Holder; and
provided, further, that each Holder may assign its rights hereunder in the
manner and to the Persons as permitted under the Purchase Agreement.
(k) Assignment of Registration Rights. The rights of each Holder
hereunder, including the right to have the Company register for resale
Registrable Securities in accordance with the terms of this Agreement, shall be
automatically assignable by each Holder to any transferee of such Holder of all
or a portion of the Purchased Shares, the Warrants or the 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 7(k),
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. The
rights to assignment shall apply to the Holders (and to subsequent) successors
and assigns.
The Company may require, as a condition of allowing such assignment
in connection with a transfer of Purchased Shares, Warrants or Registrable
Securities (i) that the Holder or transferee of all or a portion of the
Purchased Shares, the Warrants or the Registrable Securities as the case may be,
furnish to the Company a written opinion of counsel that is reasonably
acceptable to the Company to the effect that such transfer may be made without
registration under the Securities Act, (ii) that the Holder or transferee
execute and deliver to the Company an investment letter in form and substance
acceptable to the Company and (iii) that the transferee be an "accredited
investor" as defined in Rule 501(a) promulgated under the Securities Act.
(l) Counterparts; Facsimile. 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 electronic means or
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.
(m) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to
principles of conflicts
18
of law thereof.
(n) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(o) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction 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.
(p) Headings; Construction. 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. Any form of the word "include" as
used in this Agreement shall be deemed to be followed by the phrase "without
limitation".
(q) Registrable Securities Held by the Company and its Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by the
Company or its Affiliates (other than any Holder or transferees or successors or
assigns thereof if such Holder is deemed to be an Affiliate solely by reason of
its holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
(r) Obligations of Purchasers. The Company acknowledges that the
obligations of each Purchaser under this Agreement, are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under this Agreement. The decision of each Purchaser to enter into to
this Agreement has been made by such Purchaser independently of any other
Purchaser. The Company further acknowledges that nothing contained in this
Agreement, and no action taken by any Purchaser pursuant hereto, shall be deemed
to constitute the Purchasers as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Purchasers are in
any way acting in concert or as a group with respect to such obligations or the
transactions contemplated hereby. Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation, the
rights arising out of this Agreement, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such
purpose.
Each Purchaser acknowledges that it has been represented by its own
separate legal counsel in their review and negotiation of this Agreement and
with respect to the transactions contemplated hereby. For reasons of
administrative convenience only, this Agreement has been prepared by Special
Counsel (counsel for SDS Capital Group, SPC,
19
Ltd, a Purchaser) and the Special Counsel will perform certain duties under this
Agreement. Each Purchaser acknowledges that such counsel does not represent all
of the Purchasers but only SDS Capital Group, SPC, Ltd.
[signature page follows]
20
IN WITNESS WHEREOF, the parties hereto have caused this Investor
Rights Agreement to be duly executed by their respective authorized persons as
of the date first indicated above.
COMPANY:
SPECTRUM PHARMACEUTICALS, INC.
By: /s/ Rajesh C. Shrotriya
--------------------------------
Name: Rajesh C. Shrotriya
Title: Chief Executive Officer
21
PURCHASER:
Print Exact Name:_________________________________
By:_____________________________________________
Name:
Title:
[Omnibus Spectrum Pharmaceuticals, Inc. Investor Rights Agreement Signature
Page]
22
SCHEDULE 1
TO
INVESTOR RIGHTS AGREEMENT
PURCHASERS AND SHARES OF COMMON STOCK AND WARRANTS PURCHASED
NAME, ADDRESS, FAX NUMBER OF PURCHASER AND COPIES OF SHARES OF COMMON STOCK COMMON STOCK UNDERLYING
NOTICES TO: PURCHASED WARRANTS PURCHASE PRICE
- ----------- --------- -------- --------------
BayStar Capital II LP 65,000 22,750 $503,750.00
80 E. Sir Francis Drake Blvd. Suite 2B
Larkspur, CA 94939
Attn: Steven M. Lamar, Managing Partner
Bristol Investment Fund, Ltd. 83,872 29,355 $650,008.00
c/o Bristol Capital Advisors, LLC
6363 Sunset Blvd., 5th Floor
Hollywood, CA 90028
Attn: Amy Wang, Esq.
Cranshire Capital, L.P. 193,548 67,742 $1,499,997.00
666 Dundee Road, Suite 1901
Northbrook, IL 60062
Attn: Mitchell Kopin, President
C.S.L. Associates L.P. 40,000 14,000 $310,000.00
399 Park Avenue, 37th Floor
New York, NY 10022
Attn: Charles S. Lipson, General Partner
Galleon Captain's Offshore, Ltd. 118,350 41,423 $917,212.50
135 East 57th Street, 16th Floor
New York, NY 10022
Attn: George Lau, Managing Director
Galleon Captain's Partners, L.P. 31,650 11,078 $245,287.50
135 East 57th Street, 16th Floor
New York, NY 10022
Attn: George Lau, Managing Director
23
NAME, ADDRESS, FAX NUMBER OF PURCHASER AND COPIES OF SHARES OF COMMON COMMON STOCK UNDERLYING PURCHASE PRICE
NOTICES TO: STOCK PURCHASED WARRANTS
- ----------- --------------- -------- --------------
Galleon Healthcare Offshore, Ltd. 350,400 122,640 $2,715,600.00
135 East 57th Street, 16th Floor
New York, NY 10022
Attn: George Lau, Managing Director
Galleon Healthcare Partners, L.P. 49,600 17,360 $384,400.00
135 East 57th Street, 16th Floor
New York, NY 10022
Attn: George Lau, Managing Director
J.W. Focused Growth Fund, LP 4,516 1,581 $34,999.00
46 Windmill Road
Armonk, NY 10504
Attn: Jason Wild, President
J. Wild Fund, LP 5,161 1,806 $39,997.75
46 Windmill Road
Armonk, NY 10504
Attn: Jason Wild, President
LEBA Investments, LP 20,000 7,000 $155,000.00
1645 Village Center Circle, #170
Las Vegas, NV 89134
MAIL ALL DOCUMENTS TO:
c/o Smith Barney
1000 E. Hallandale Beach Blvd.
Hallendale, FL 33009
Attn: Allan Yarkin
Mulligan BioCapital AG 129,032 45,161 $999,998.00
Stubbenhuk 7
20459 Hamburg, Germany
Attn: Hans Hermann Munchmeyer, Managing Director
North Sound Legacy Fund LLC 27,500 9,625 $213,125.00
53 Forest Avenue, #202
Old Greenwich, CT 06870
Attn: Thomas E. McAuley, Managing Member
24
NAME, ADDRESS, FAX NUMBER OF PURCHASER AND COPIES OF SHARES OF COMMON STOCK COMMON STOCK UNDERLYING PURCHASE PRICE
NOTICES TO: PURCHASED WARRANTS
- ----------- --------- -------- --------------
North Sound Legacy Institutional Fund LLC 396,000 138,600 $3,069,000
53 Forest Avenue, #202
Old Greenwich, CT 06870
Attn: Thomas E. McAuley, Managing Member
North Sound Legacy International LTD 676,500 236,775 $5,242,875.00
53 Forest Avenue, #202
Old Greenwich, CT 06870
Attn: Thomas E. McAuley, Managing Member
Off Sands Point, LTD 62,500 21,875 $484,375.00
280 Park Avenue, 39th Floor
New York, NY 10017
Attn: Stuart Z. Feldman, COO
Omicron Master Trust 193,548 67,742 $1,499,997.00
810 7th Avenue, 39th Floor
New York, NY 10019
Attn: Bruce Bernstein, Managing Partner
ProMed Offshore Fund, Ltd. 14,930 5,226 $115,707.50
237 Park Avenue, 9th Floor
New York, NY 10017
Attn: Barry Kurokawa, Managing Director
ProMed Partners, L.P. 92,210 32,274 $714,627.50
237 Park Avenue, 9th Floor
New York, NY 10017
Attn: Barry Kurokawa, Managing Director
ProMed Partners II, L.P. 25,770 9,020 $199,717.50
237 Park Avenue, 9th Floor
New York, NY 10017
Attn: Barry Kurokawa, Managing Director
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NAME, ADDRESS, FAX NUMBER OF PURCHASER AND COPIES OF SHARES OF COMMON STOCK COMMON STOCK UNDERLYING PURCHASE PRICE
NOTICES TO: PURCHASED WARRANTS
- ----------- --------- -------- --------------
Sands Point Partners, LP 62,500 21,875 $484,375.00
280 Park Avenue, 39th Floor
New York, NY 10017
Attn: Stuart Z. Feldman, COO
Schottenfeld Qualified Associates, LP 51,612 18,064 $399,993.00
399 Park Avenue, 37th Floor
New York, NY 10022
Attn: Richard Schottenfeld, Managing Member
SDS Capital Group, SPC, Ltd 200,000 70,000 $1,550,000.00
53 Forest Avenue, Suite 203
Old Greenwich, CT 06870
Attn: Steve Derby, Managing Member
COPIES OF NOTICES TO:
Michael Grundei, Esq.
Wiggin & Dana LLP
400 Atlantic Street
Stamford, CT 06901
Wheaton HealthCare Partners LP 25,806 9,032 $199,996.50
212 Durham Avenue, Bldg. 1, Suite 201
Metuchen, NJ 08840
Attn: Jerry Treppel
Xmark Fund, LTD. 146,670 51,335 $1,136,692.50
152 West 57th Street, 21st Floor
New York, NY 10019
Attn: Mitchell D. Kaye, CIO
Xmark Fund, L.P. 153,330 53,666 $1,188,307.50
152 West 57th Street, 21st Floor
New York, NY 10019
Attn: Mitchell D. Kaye, CIO
TOTALS: $24,955,038.75
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EXHIBIT A
PLAN OF DISTRIBUTION
We are registering the shares of common stock on behalf of the selling
security holders. Sales of shares may be made by selling security holders,
including their respective donees, transferees, pledgees or other
successors-in-interest directly to purchasers or to or through underwriters,
broker-dealers or through agents. Sales may be made from time to time on the
NASDAQ SmallCap Market, any other exchange or market upon which our shares may
trade in the future, in the over-the-counter market or otherwise, at market
prices prevailing at the time of sale, at prices related to market prices, or at
negotiated or fixed prices. The shares may be sold by one or more of, or a
combination of, the following:
- - a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction (including crosses in
which the same broker acts as agent for both sides of the transaction);
- - purchases by a broker-dealer as principal and resale by such
broker-dealer, including resales for its account, pursuant to this
prospectus;
- - ordinary brokerage transactions and transactions in which the broker
solicits purchases;
- - through options, swaps or derivatives;
- - in privately negotiated transactions;
- - in making short sales or in transactions to cover short sales; and
- - put or call option transactions relating to the shares.
The selling security holders may effect these transactions by selling
shares directly to purchasers or to or through broker-dealers, which may act as
agents or principals. These broker-dealers may receive compensation in the form
of discounts, concessions or commissions from the selling security holders
and/or the purchasers of shares for whom such broker-dealers may act as agents
or to whom they sell as principals, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions). The
selling security holders 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 securities.
The selling security holders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with those
transactions, the broker-dealers or other financial institutions may engage in
short sales of the shares or of securities convertible
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into or exchangeable for the shares in the course of hedging positions they
assume with the selling security holders. The selling security holders may also
enter into options or other transactions with broker-dealers or other financial
institutions which require the delivery of shares offered by this prospectus to
those broker-dealers or other financial institutions. The broker-dealer or other
financial institution may then resell the shares pursuant to this prospectus (as
amended or supplemented, if required by applicable law, to reflect those
transactions).
The selling security holders and any broker-dealers that act in
connection with the sale of shares may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act of 1933, and any commissions
received by broker-dealers or any profit on the resale of the shares sold by
them while acting as principals may be deemed to be underwriting discounts or
commissions under the Securities Act. The selling security holders may agree to
indemnify any agent, dealer or broker-dealer that participates in transactions
involving sales of the shares against liabilities, including liabilities arising
under the Securities Act. We have agreed to indemnify each of the selling
security holders and each selling security holder has agreed, severally and not
jointly, to indemnify us against some liabilities in connection with the
offering of the shares, including liabilities arising under the Securities Act.
The selling security holders will be subject to the prospectus delivery
requirements of the Securities Act. We have informed the selling security
holders that the anti-manipulative provisions of Regulation M promulgated under
the Securities Exchange Act of 1934 may apply to their sales in the market.
Selling security holders also may resell all or a portion of the shares
in open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of Rule 144.
Upon being notified by a selling security holder that a material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, we will file a supplement to
this prospectus, if required pursuant to Rule 424(b) under the Securities Act,
disclosing:
- - the name of each such selling security holder and of the participating
broker-dealer(s);
- - the number of shares involved;
- - the initial price at which the shares were sold;
- - the commissions paid or discounts or concessions allowed to the
broker-dealer(s), where applicable;
- - that such broker-dealer(s) did not conduct any investigation to verify
the information set out or incorporated by reference in this
prospectus; and
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- - other facts material to the transactions.
In addition, if required under applicable law or the rules or
regulations of the Commission, we will file a supplement to this prospectus when
a selling security holder notifies us that a donee or pledgee intends to sell
more than 500 shares of common stock.
We are paying all expenses and fees customarily paid by the issuer in
connection with the registration of the shares. The selling security holders
will bear all brokerage or underwriting discounts or commissions paid to
broker-dealers in connection with the sale of the shares.
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EXHIBIT B
FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT
[Name and Address of Transfer Agent]
Re: Spectrum Pharmaceuticals, Inc.
Dear [______]:
We are counsel to Spectrum Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and have represented the Company in connection with
that certain Common Stock and Warrant Purchase Agreement (the "Purchase
Agreement") dated as of __________________, 2004 by and among the Company and
the buyers named therein (collectively, the "Holders") pursuant to which the
Company issued to the Holders shares of its Common Stock, par value $0.001 per
share (the "Common Stock"), and warrants to purchase shares of the Common Stock
(the "Warrants"). Pursuant to the Purchase Agreement, the Company has also
entered into an Investor Rights Agreement with the Holders (the "Investor Rights
Agreement") pursuant to which the Company agreed, among other things, to
register the shares of Common Stock issued pursuant to the Purchase Agreement
and the Common Stock issuable upon exercise of the Warrants, under the
Securities Act of 1933, as amended (the "1933 Act"). In connection with the
Company's obligations under the Investor Rights Agreement, on ____________ ___,
2004, the Company filed a Registration Statement on Form S-__ (File No.
333-_____________) (the "Registration Statement") with the Securities and
Exchange Commission (the "SEC") relating to the Registrable Securities which
names each of the Holders as a selling securityholder 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 the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
By:__________________________________
cc: [LIST NAMES OF HOLDERS]
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