Exhibit 10.2


 


EXECUTION COPY


 


REGISTRATION
RIGHTS AGREEMENT


 


This Registration Rights Agreement (this “Agreement”) is made and entered into as of June 20,
2008, by and between ImmunoGen, Inc., a Massachusetts corporation (the “Company”), and Ziff Asset Management, L.P.,
a Delaware limited partnership (the “Purchaser”).


 


This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of June 20, 2008, between the Company and the Purchaser (the “Purchase Agreement”).


 


NOW, THEREFORE, IN CONSIDERATION of the mutual covenants
contained in this Agreement, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Company and the
Purchaser agree as follows:


 


1.  Definitions.  Capitalized terms used and not otherwise
defined herein that are defined in the Purchase Agreement shall have the
meanings given such terms in the Purchase Agreement. As used in this Agreement,
the following terms shall have the respective meanings set forth in this Section 1:


 


“Commission” means the United States
Securities and Exchange Commission or any other federal agency at the time
administering the Securities Act.


 


“Common Stock” means the common stock, par
value $0.01 per share, of the Company.


 


“Effective Date” means the date that the
Registration Statement filed pursuant to Section 2(a) is first
declared effective by the Commission.


 


“Effectiveness Date” means: (a) with
respect to the Initial Registration Statement, the 90th day following the Closing, (b) with
respect to any additional Registration Statements that may be required pursuant
to Section 2 hereof, the 90th day following the date on which the Company
first knows, or reasonably should have known, that such additional Registration
Statement is required under such Section.


 


“Effectiveness Period” shall have the
meaning set forth in Section 2(a).


 


“Event” shall have the meaning set forth in Section 2(c).


 


“Event Date” shall have the meaning set
forth in Section 2(c).


 


“Exchange Act” means the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated
thereunder.


 


“Filing Date” means: (a) with respect
to the initial Registration Statement required to be filed to cover the resale
by the Holders of the Registrable Securities, the 45th day following the Closing, and (b) with
respect to any additional Registration Statements that may be required pursuant
to Section 2 hereof, the 45th day following the date on which the Company
first knows, 


 

















 


or
reasonably should have known, that such additional Registration Statement is
required under such Section.


 


“Holder” or “Holders” means the holder or holders, as the case may be, from
time to time of Registrable Securities.


 


“Indemnified Party” shall have the meaning
set forth in Section 5(c)(i).


 


“Indemnifying Party” shall have the meaning
set forth in Section 5(c)(i).


 


“Initial Registration Statement” shall mean
the initial Registration Statement required to be filed to cover the resale by
the Holders of the Registrable Securities pursuant to Section 2(a).


 


“Inspectors” shall have the meaning set
forth in Section 3(l).


 


“Losses” shall have the meaning set forth in
Section 5(a).


 


“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or 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 a 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 or Rule 430B
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 a Registration Statement, and all
other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.


 


“Reduction Securities” shall have the
meaning set forth in Section 2(d).


 


“Registrable Securities” means (i) the
Shares issued pursuant to the Purchase Agreement and (ii) any other shares
of Common Stock issued as (or issuable upon conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, in exchange for or in replacement of the Shares; provided,
however, that Shares which are Registrable Securities shall cease to be
Registrable Securities upon the earlier of (x) any sale of such
Registrable Securities pursuant to a Registration Statement or Rule 144,
or (y) following any sale of such Registrable Securities by the Purchaser
(other than pursuant to a Registration Statement or Rule 144) to any
Person other than an Affiliate of the Purchaser who, after giving effect to
such sale, owns less than 10% of the outstanding shares of Common Stock, at
such time as such Person is able to sell all of his or its Registrable
Securities 


 


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pursuant
to Rule 144(b)(1).


 


“Registration Statement” means each of the
following: (i) the Initial Registration Statement, and (ii) each
additional registration statement, if any, contemplated by Section 2, and
including, in each case, the Prospectus, amendments and supplements to each
such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be 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 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.


 


“Rule 424” means Rule 424
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, and the rules and regulations promulgated thereunder.


 


“Shares” shall have the meaning set forth in
the Purchase Agreement.


 


“Trading Day” shall have the meaning set
forth in the Purchase Agreement.


 


2.  Registration.


 


(a)       On or prior to each Filing
Date, the Company shall prepare and file with the Commission a Registration
Statement covering the resale of all Registrable Securities not already covered
by an existing and effective Registration Statement (except as provided in Section 2(b) and
Section 2(d)) for an offering to be made on a continuous basis pursuant to
Rule 415. The Registration Statement shall be on Form S-3 (except if
the Company is not then eligible to register for resale the Registrable
Securities on Form S-3, in which case such registration shall be on
another appropriate form for such purpose reasonably acceptable to the
Purchaser) and shall contain (except if otherwise required pursuant to written
comments received from the Commission upon a review of such Registration
Statement) the “Plan of Distribution” in substantially the form attached hereto
as Annex A, with such changes as may be requested by the Holders. The
Company shall use its commercially reasonable efforts to cause each
Registration Statement to be declared effective under the Securities Act as
soon as possible after the respective dates of filing thereof, but, in any
event, no later than the Effectiveness Date for such Registration Statement,
and shall use its commercially reasonable efforts to keep the Registration
Statement continuously effective under the Securities Act until the date on
which all Registrable Securities covered by such Registration Statement have ceased
to be Registrable Securities (the “Effectiveness Period”), subject to Section 6(d) hereof.
It is agreed and understood that the 


 


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Company
shall, from time to time, be obligated to file one or more additional
Registration Statements to cover any Registrable Securities which are not
registered for resale pursuant to a pre-existing Registration Statement.


 


(b)       Notwithstanding anything
contained herein to the contrary, including the fact that such Registrable
Securities may be registered pursuant to the Registration Statement referred to
in Section 2(d) below, in the event that the Commission limits the
amount of Registrable Securities that may be included and sold by Holders in
any Registration Statement, including the Initial Registration Statement,
pursuant to Rule 415 or any other basis, the Company may reduce the number
of Registrable Securities included in such Registration Statement on behalf of
the Holders (in proportion to the respective numbers of Registrable Securities
represented by Shares held by such Holders ). In such event the Company shall
give the Holders prompt notice of the number of the Registrable Securities
excluded and the Company will not be liable for any liquidated damages under Section 2(c),
or otherwise under this Agreement, in connection with the excluded Registrable
Securities. The Company shall use its commercially reasonable efforts at the
first opportunity that is permitted by the Commission to register for resale
the Registrable Securities that were excluded from being registered on such
Registration Statement. Such new Registration Statement shall be on Form S-3
(except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall
be on another appropriate form for such purpose reasonably acceptable to the
Purchaser) and shall contain (except if otherwise required pursuant to written
comments received from the Commission upon a review of such Registration
Statement) the “Plan of Distribution” in substantially the form attached hereto
as  Annex A, with such changes as
the Holders may request. The Company shall use its commercially reasonable
efforts to cause each such Registration Statement to be declared effective
under the Securities Act as soon as possible after the respective dates of
filing thereof, but, in any event, no later than the Effectiveness Date for
such Registration Statement, and shall use its commercially reasonable efforts
to keep such Registration Statement continuously effective under the Securities
Act during the entire Effectiveness Period, subject to Section 6(d) hereof.


 


(c)       Except as provided in Section 2(b),
if: (i) a Registration Statement is not filed on or prior to its Filing
Date, (ii) a Registration Statement is not declared effective by the
Commission on or prior to its required Effectiveness Date, or (iii) after
its Effective Date, such Registration Statement ceases for any reason to be
effective and available to the Holders as to all Registrable Securities to
which it is required to cover at any time prior to the expiration of its
Effectiveness Period for an aggregate of more than 20 consecutive Trading Days
or an aggregate of 50 Trading Days (which need not be consecutive) in any given
360-day period, (any such failure or breach being referred to as an “Event,” and for
purposes of clauses (i) or (ii) the date on which such Event occurs,
and for purposes of clause (iii) the date on which such 20 consecutive or
50 Trading Day-period (as applicable) is exceeded, being referred to as the “Event
Date”), then, in addition to any other rights available to the Holders: (x) on
such Event Date the Company shall pay to each Holder an amount in cash, as
liquidated damages and not as a penalty, equal to 1% of the aggregate purchase
price paid by such Holder pursuant to the Purchase Agreement for its
Registrable Securities then held; and (y) on each monthly anniversary of
each such Event Date (if the applicable Event shall not have been cured by such
date) until the applicable Event is cured, the Company shall pay to each Holder
an amount in 


 


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cash,
as partial liquidated damages and not as a penalty, equal to 1% of the
aggregate purchase price paid by such Holder pursuant to the Purchase Agreement
for its Registrable Securities then held; provided, that all periods
shall be tolled, with respect to a Holder, by the number of Trading Days during
which such Holder fails to provide the Company with information regarding such
Holder which was reasonably requested by the Company in order to effect the
registration of such Holder’s Registrable Securities pursuant to Section 6(e) hereof.
The partial liquidated damages pursuant to the terms hereof shall apply on a
pro rata basis for any portion of a month prior to the cure of an Event.


 


(d)       In the event that the number
of Registrable Securities included in the Initial Registration Statement or any
subsequent Registration Statement are reduced as provided in Section 2(b) above
(such Registrable Securities, the “Reduction Securities”), the Company
shall prepare and file with the Commission a Registration Statement covering
the resale of the Reduction Securities on Form S-1 (or another appropriate
form for such purpose reasonably acceptable to the Purchaser). The Registration
Statement shall contain (except if otherwise required pursuant to written
comments received from the Commission upon a review of such Registration
Statement) the “Plan of Distribution” in substantially the form attached hereto
as Annex A, with such changes as the Holders may request. The Company
shall use its commercially reasonable efforts to cause such Registration
Statement to be declared effective under the Securities Act as soon as possible
after the date of filing thereof, but, in any event, no later than the
Effectiveness Date for such Registration Statement, and shall use its
commercially reasonable efforts to keep the Registration Statement continuously
effective under the Securities Act for the Effectiveness Period, subject to Section 6(d) hereof.
In the event that any Reduction Securities become registered pursuant to a
Registration Statement on Form S-3 pursuant to Section 2(b) or
otherwise, such Reduction Securities may be removed from the Registration
Statement on Form S-1 contemplated by this Section 2(d).


 


3.  Registration Procedures.  In connection with the Company’s registration
obligations hereunder, the Company shall:


 


(a)       Not less than five Trading
Days prior to the filing of a Registration Statement or any related Prospectus
or any amendment or supplement thereto, the Company shall furnish to the
Holders copies of all such documents proposed to be filed (other than those
incorporated by reference). In the event that any Registration Statement is on Form S-1
(or other form which does not permit incorporation by reference), the Company
shall not be required to furnish to the Holders any prospectus supplement
containing information included in a report or proxy statement filed under the
Exchange Act that would be incorporated by reference in such Registration
Statement if such Registration Statement were on Form S-3 (or other form
which permits incorporation by reference). The Company shall duly consider any
comments made by Holders and received by the Company not later than two Trading
Days prior to the filing of the Registration Statement, and shall not file any
Registration Statement or any related Prospectus or any amendment or supplement
thereto in a form to which such Holders reasonably object.


 


(b)       (i) Prepare and file
with the Commission such amendments, including post-effective amendments, to
each Registration Statement and the Prospectus used in connection therewith as
may be necessary to keep such Registration Statement continuously effective as
to 


 


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the
applicable Registrable Securities for its Effectiveness Period and prepare and
file with the Commission such additional Registration Statements in order to
register for resale under the Securities Act all of the Registrable Securities;
(ii) cause the related Prospectus to be amended or supplemented by any
required Prospectus supplement, and as so supplemented or amended to be filed
pursuant to Rule 424; (iii) respond as promptly as reasonably
possible to any comments received from the Commission with respect to each
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 such Registration Statement, excluding any
comments that would result in the disclosure to the Holders of material and
non-public information concerning the Company; and (iv) comply in all
material respects with the provisions of the Securities Act and the Exchange
Act with respect to the Registration Statements and the disposition of all
Registrable Securities covered by each Registration Statement.


 


(c)       Notify the Holders as
promptly as reasonably possible (and, in the case of clause (i)(A) below,
not less than five Trading Days prior to such filing) and confirm such notice
in writing no later than one Trading Day following the day: (i)(A) when a
Prospectus or any prospectus supplement (but only to the extent notice is required
under Section 3(a) above) or post-effective amendment to a
Registration Statement is proposed to be filed; (B) when the Commission
notifies the Company whether there will be a “review” of such Registration
Statement and whenever the Commission comments in writing on such Registration
Statement (in which case the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders, excluding
information that the Company believes would constitute material and non-public
information regarding the Company); and (C) with respect to each
Registration Statement or any post-effective amendment, when the same has been
declared effective; (ii) of any request by the Commission or any other
Federal or state governmental authority for amendments or supplements to a
Registration Statement or Prospectus or for additional information that
pertains to the Holders as Selling Stockholders or the Plan of Distribution; (iii) of
the issuance by the Commission of any stop order suspending the effectiveness
of a Registration Statement covering any or all of the Registrable Securities
or the initiation of any Proceedings for that purpose; (iv) of the receipt
by the Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale
in any jurisdiction, or the initiation or threatening of any Proceeding for
such purpose; (v) of the occurrence of any event or passage of time that
makes the financial statements included or incorporated by reference in a
Registration Statement ineligible for inclusion or incorporation by reference
therein or any statement made in such 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 such
Registration Statement, Prospectus or other documents so that, in the case of
such 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 light of the circumstances under which they were made, not misleading; and (vi) of
the occurrence or existence of any pending corporate development with respect
to the Company that the Company believes may be material and that, in the
determination of the Company, makes it not in the best interest of the Company
to allow continued availability of a Registration Statement or Prospectus; provided,
that any and all of 


 


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such
information shall remain confidential to each Holder until such information
otherwise becomes public, unless disclosure by a Holder is required by
law;  provided, further,
that notwithstanding each Holder’s agreement to keep such information
confidential, each such Holder makes no acknowledgement that any such
information is material, non-public information.


 


(d)       Use its commercially
reasonable efforts to prevent the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of a 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 moment and to notify each Holder who
holds Registrable Securities being sold of the issuance of any such order and
the resolution thereof or its receipt of actual notice of the initiation or
threat of any proceeding for such purpose.


 


(e)       Furnish to each Holder,
without charge, at least one conformed copy of each Registration Statement and
each amendment thereto and all exhibits to the extent reasonably requested by
such Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.


 


(f)        Promptly
deliver to each Holder, without charge, (i) as many copies of each
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request and (ii) such
other documents, including copies of any preliminary or final prospectus, as
such Holder may reasonably request from time to time in order to facilitate the
disposition of the Registrable Securities owned by such Holder. Subject to Section 6(d) hereof,
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.


 


(g)       Prior to any public offering
of Registrable Securities, use its commercially reasonable efforts to (i) register
or qualify or cooperate with the selling Holders in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of those jurisdictions within the United States as
any Holder reasonably requests in writing to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness
Period, (ii) prepare and file in those jurisdictions such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Effectiveness Period, (iii) take such other actions as may be
reasonably necessary to maintain such registrations and qualifications in
effect at all times during the Effectiveness Period and (iv) 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 the Registration
Statements; provided, that the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then qualified, or
subject the Company to any material tax in any such jurisdiction where it is
not then so subject, or file a general consent to service of process in any
such jurisdiction.


 


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(h)       If requested by the Holders,
cooperate with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a
transferee pursuant to the Registration Statements, which certificates shall be
free of all restrictive legends, and to enable such Registrable Securities to
be in such denominations and registered in such names as any such Holders may
request.


 


(i)        Upon the
occurrence of any event contemplated by Section 3(c)(vi), as promptly as
reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the affected Registration Statements 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, no Registration Statement nor any 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 light of the circumstances under which they were made, not misleading.  If the Company notifies the Holders in
accordance with Section 3(c)(vi) to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the Holders
shall suspend use of such Prospectus. 
The Company will use its commercially reasonable efforts to ensure that
the use of the Prospectus may be resumed as promptly as is practicable.  The Company shall be entitled to exercise its
right to suspend the availability of a Registration Statement and Prospectus
for a period not to exceed sixty (60) calendar days (which need not be
consecutive days) in any 12-month period.


 


(j)        The Company may
require each selling Holder to furnish to the Company a certified statement as
to the number of shares of Common Stock beneficially owned by such Holder and
any Affiliate thereof, and, if required by the Commission, the natural persons
thereof that have voting and dispositive control over the shares.


 


(k)       If any Holder reasonably
requests, the Company shall use its commercially reasonable efforts to obtain
an opinion from the Company’s counsel and a “comfort” letter from the Company’s
independent public accountants in customary form and covering such matters as
are customarily covered by such opinions and “comfort” letters delivered to
underwriters in underwritten public offerings, which opinion and letter shall
be reasonably satisfactory to the underwriter, if any, and furnish, on the date
of the effectiveness of the Registration Statement and thereafter from time to
time on such dates as a Holder may reasonably request, to each Holder
participating in the offering and to each underwriter, if any, a copy of such
opinion and letter addressed to such Holder or underwriter.


 


(l)        If any Holder
reasonably requests, the Company shall promptly make available for inspection
by (i) such Holder, (ii) its legal counsel and (iii) one firm of
accountants or other agents retained by the Holders (collectively, the “Inspectors”), all
pertinent financial and other records, and pertinent corporate documents and
properties of the Company, as shall be reasonably deemed necessary by each
Inspector, and cause the Company’s officers, directors and employees to supply
all information which any Inspector may reasonably request; provided, however,
that if any such information is designated by the Company as being
confidential, upon request by the Company, such Holder shall enter into a
customary confidentiality agreement with respect to such information.  Each Holder agrees that any non-public
information obtained by it as a result of such inspections shall be deemed
confidential and acknowledges its obligations 


 


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under
the federal securities laws not to trade any securities of the Company on the
basis of material non-public information. In addition, the Company shall not be
obligated under this section to disclose any information that is subject to a
confidentiality agreement between the Company and any third party, provided
that the Company shall use its commercially reasonable efforts to seek the appropriate
third party consent to such disclosure to the Inspectors and, in connection
with an underwritten offering, the Company shall provide any such information
to the underwriter of such offering and its legal counsel, pursuant to
customary due diligence procedures for underwritten securities offerings.
Nothing herein (or in any other confidentiality agreement between the Company
and any Holder) shall be deemed to limit the Holders’ ability to sell
Registrable Securities in a manner which is otherwise consistent with
applicable laws and regulations.


 


(m)      The Company shall hold in
confidence and not make any disclosure of information concerning a Holder
provided to the Company unless (i) disclosure of such information is
necessary to comply with federal or state securities laws, (ii) the
disclosure of such information is necessary to avoid or correct a misstatement
or omission in any Registration Statement, (iii) the release of such
information is ordered pursuant to a subpoena or other final, non-appealable order
from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this Agreement or any other agreement. The Company
agrees that it shall, upon learning that disclosure of such information
concerning a Holder is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt written notice to
such Holder and allow such Holder, at the Holder’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.


 


(n)       Enter into such customary
agreements (including, if applicable, an underwriting agreement) and take such
other actions as the Holders participating in such offering shall reasonably
request in order to expedite or facilitate the disposition of their Registrable
Securities (it being understood that the Holders of the Registrable Securities
which are to be distributed by any underwriters shall be parties to any such
underwriting agreement and may, at their option, require that the Company make
to and for the benefit of such Holders the representations, warranties and
covenants and indemnifications of the Company which are being made to and for the
benefit of such underwriters).


 


4.  Registration Expenses.  All fees and expenses incident to the Company’s
performance of or compliance with its obligations under this Agreement
(excluding any underwriting discounts and selling commissions) shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a
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 Trading Market on which the
Common Stock is then listed for trading, and (B) in compliance with
applicable state securities or Blue Sky laws), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) reasonable fees and disbursements of
counsel for the 


 


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Company,
(v) Securities Act liability insurance, if the Company so desires such
insurance, (vi) fees and disbursements of all independent certified public
accountants (including, without limitation, the expenses of any “comfort”
letters), and (vii) reasonable fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation
of the transactions contemplated by this Agreement (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expense of any annual audit and the fees and
expenses incurred in connection with the listing of the Registrable Securities
on any securities exchange as required hereunder.  The Company shall reimburse the Holders for
the fees and disbursements of one legal counsel representing the Holders in
connection with registration, filing or qualification pursuant to Sections 2
and 3 of this Agreement which amount shall be limited to $25,000.


 


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, partners, members,
stockholders and employees of each Holder, 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, partners, members,
stockholders 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, reasonable
costs of preparation and reasonable attorneys’ fees) and expenses
(collectively, “Losses”), as incurred, arising out
of or relating to (i) any untrue or alleged untrue statement of a material
fact contained in any Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto, (ii) any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein (in the case of any Prospectus or form of
prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, (iii) any violation or alleged violation
by the Company of the Securities Act, the Exchange Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement and (iv) any violation of
this Agreement, except to the extent, but only to the extent, that, with
respect to clauses (i) and (ii), such untrue statements, alleged untrue
statements, omissions or alleged omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein. 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.


 


(b)       Indemnification
by Holders.  Each Holder
shall, notwithstanding any termination of this Agreement, 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, partners, members, stockholders or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as 


 


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incurred,
arising solely out of or based solely upon any untrue statement of a material
fact contained in any 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 any form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading to the extent, but
only to the extent that, 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. In no event shall the liability of any
selling Holder hereunder be greater in amount than the dollar amount of the net
proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.


 


(c)       Conduct of
Indemnification Proceedings.


 


(i)        If any Proceeding shall be brought or asserted
against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from whom
indemnity is sought (the “Indemnifying Party”) in writing,
and the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof; provided,
that the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except (and only) to the extent that it shall be finally determined
by a court of competent jurisdiction (which determination is not subject to
appeal or further review) that such failure shall have proximately and
materially adversely prejudiced the Indemnifying Party.


 


(ii)       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: (1) the
Indemnifying Party has agreed in writing to pay such fees and expenses; (2) 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 (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party shall have been
advised by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in
which case, if such Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense thereof and such counsel shall be at the expense of the
Indemnifying Party); provided, that the Indemnifying Party shall not be
liable for the fees and expenses of more than one separate firm of attorneys at
any time for all Indemnified Parties pursuant to this Section 5(c). 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 


 


11

















 


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.


 


(iii)      All 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 Trading Days of written notice
thereof to the Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnifying Party may require such Indemnified
Party to undertake to reimburse all such fees and expenses to the extent it is
finally judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).


 


(d)                     Contribution.


 


(i)        If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party (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.


 


(ii)       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. Notwithstanding the provisions of this Section 5(d),
no Holder shall be required to contribute, in the aggregate, any amount in
excess of the amount by which the proceeds actually received by such Holder
from the sale of the Registrable Securities subject to the Proceeding exceeds
the amount of any damages that such Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of 


 


12

















 


such fraudulent misrepresentation.


 


(iii)      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 and are not in diminution or
limitation of the indemnification provisions under the Purchase Agreement.


 


6.  Miscellaneous.


 


(a)       Remedies.  In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, each
Holder will be entitled to seek specific performance under this Agreement.  The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of
the Company’s obligations contained in this Agreement and the Company hereby
agrees to waive and not to assert in any action for specific performance of any
such obligation the defense that a remedy at law would be adequate.


 


(b)       Reports.  With a view to making available to the
Holders the benefits of Rule 144 or any other similar rule or
regulation of the Commission that may at any time permit the Holders to sell
securities of the Company to the public without registration, the Company
agrees, from the date hereof until the end of the Effectiveness Period, to (i) make
and keep current public information available, as those terms are understood
and defined in Rule 144; (ii) file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and (iii) furnish to each Holder so
long as such Holder owns Registrable Securities, promptly upon request, (A) a
written statement by the Company, if true, that it has complied with the
reporting requirements of Rule 144, the Securities Act and the Exchange
Act, (B) 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 (C) such
other information as may be reasonably requested to permit the Holders to sell
such securities pursuant to Rule 144 without registration.


 


(c)       Subsequent
Registration Rights.  Until the
Initial Registration Statement required hereunder is declared effective by the
Commission, the Company shall not enter into any agreement granting any
registration rights with respect to any of its securities to any Person without
the written consent of the Purchaser, for so long as the Purchaser or its
assignee holds any Registrable Securities.


 


(d)       Discontinued
Disposition.  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 clauses (ii) through (vi) of Section 3(c), 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 or until it is
advised in writing by the Company that the use of the applicable Prospectus may
be resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement. The Company
acknowledges that receipt of such notice 


 


13

















 


shall
not require the Holders to cease to sell any Registrable Securities other than
pursuant to the Registration Statement and that the Holders may at any time
without restriction sell Registrable Securities other than pursuant to the
Registration Statement.


 


(e)       Furnishing of
Information.  Each Holder
shall furnish in writing to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the
Registrable Securities held by it, as shall be reasonably requested by the
Company to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.


 


(f)        Piggy-Back
Registrations. If at any time during the Effectiveness Period,
except as contemplated by Section 2(b) or Section 2(d) hereof,
there is not an effective Registration Statement covering all of the
Registrable Securities and 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 their 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 the stock option
or other employee benefit plans, then the Company shall send to each Holder a
written notice of such determination and, if within 15 days after the date of
such notice, any such Holder shall so request in writing, the Company shall
include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered.


 


(g)       Amendments and
Waivers.  No provision of this Agreement
may be waived or amended except in a written instrument signed by the Company
and the Purchaser, for so long as the Purchaser holds any Registrable
Securities, and thereafter by the Holder(s) of a majority of the then
outstanding Registrable Securities. Any amendment or waiver effected in
accordance with this Section 6(g) shall be binding upon each Holder
and the Company. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right.


 


(h)       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 earliest of (a) the
date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached
hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the
next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto on a day that is not a Trading Day or
later than 5:30 p.m. (New York City time) on any Trading Day, (c) the
2nd Trading Day following the date of mailing, if
sent by U.S. nationally recognized overnight courier service, or (d) upon
actual receipt by the party to whom such notice is required to be given.  The addresses for such notices and
communications shall be as follows:


 


If to the Company:


 


14

















 


ImmunoGen, Inc.


830 Winter Street


Waltham, MA 02451


Fax:  (781) 895-0613


Attn:  General Counsel


 


with a copy (which shall not constitute notice) to:


 


Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C.

One Financial Center

Boston, MA 02111

Fax:  (617) 542-2241


Attn:  Jonathan L. Kravetz, Esq


 


If to the Purchaser:


 


Ziff Brothers Investments

350 Park Avenue

New York, NY  10022 

Attention:  General Counsel

Fax:  (212) 292-6659


 


with a copy (which shall not constitute notice) to:


 


Fried, Frank,
Harris, Shriver & Jacobson LLP

One New York Plaza 

New York, New York 10004

Attention:  Jonathan Adler, Esq.


Fax:  (212) 859-4000


 


If to a Holder (other than the Purchaser), to such
Holder’s address and facsimile number set forth in the agreement pursuant to
which such Holder agrees to be bound by the provisions of this Agreement in
accordance with Section 6(h);


 


or such other address as may be designated in writing
hereafter, in the same manner, by such Person.


 


(i)        Successors and
Assigns.  This Agreement shall inure to
the benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder.  The Company may not assign its obligations
under this Agreement.  Each Holder may
assign any or all of its respective rights under this Agreement to any
transferee of all or any portion of such Holder’s Registrable Securities
provided the transferee or assignee agrees to be bound by all of the provisions
contained herein.  Each Holder shall, no
later than 10 days following any transfer, give written notice (which shall include
the identity of the transferee) to the Company of any transfer by it of
Registrable Securities that remain Registrable Securities following such
transfer.


 


15

















 


(j)        Execution and
Counterparts.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any
signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation of
the party executing (or on whose behalf such signature is executed) with the
same force and effect as if such facsimile or “.pdf” signature page were
an original thereof.


 


(k)       Governing Law.  All 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.  Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the
City of New York.  Each party hereby
irrevocably submits 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, that
such suit, action or proceeding is improper or is an inconvenient venue for
such proceeding.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
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
contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.  If
either party shall commence an action or proceeding to enforce any provisions
of this Agreement, then the prevailing party in such action or proceeding shall
be reimbursed by the other party for its reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution
of such action or proceeding.


 


(l)        Cumulative
Remedies.  The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.


 


(m)      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, 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 commercially 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.


 


16

















 


(n)       Actions by
Holders.  All consents and other
determinations required to be made by the Holders pursuant to this Agreement
shall be made, unless otherwise specified in this Agreement, by the Purchaser,
for so long as the Purchaser holds any Registrable Securities, and thereafter
by the Holder(s) of a majority of the then outstanding Registrable
Securities.


 


(o)       Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.


 


[Signature Page Follows]


 


17

















 


IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.


 


 


	
  COMPANY:

  	
   

  
	
   

  	
   

  
	
   

  	
  IMMUNOGEN,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
        /s/
  Mitchel Sayare

  
	
   

  	
   

  	
  Name: Mitchel Sayare, Ph.D.

  
	
   

  	
   

  	
  Title: President, Chief
  Executive Officer 

  
	
   

  	
   

  	
  and Chairman of the
  Board

  
	
   

  	
   

  
	
   

  	
   

  
	
  PURCHASER:

  	
   

  
	
   

  	
   

  
	
   

  	
  ZIFF
  ASSET MANAGEMENT, L.P.

  
	
   

  	
   

  
	
   

  	
  By: PBK
  Holdings, Inc., its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
      /s/
  David Gray

  
	
   

  	
   

  	
  Name: David Gray

  
	
   

  	
   

  	
  Title: Vice President

  



 


 


[Signature Page to
Registration Rights Agreement]


 

















 


ANNEX A


 


PLAN OF DISTRIBUTION


 


We are registering the
shares on behalf of the selling stockholder. 
The selling
stockholder and any of its transferees who are affiliates, or any of its
pledgees, assignees and successors-in-interest may, from time to time, sell any
or all of its shares of Common Stock or any interests therein on any stock
exchange, market or trading facility on which the shares are traded or in
private transactions.  These sales may be
at market prices prevailing at the time of sale, at prices related to the
prevailing market prices or at fixed or negotiated prices, or varying prices
determined at the time of sale.  The
shares of Common Stock may be sold by the selling stockholder directly to one
or more purchasers, through agents designated from time to time or to or
through one or more underwriters or broker-dealers designated from time to
time. In the event the shares of Common Stock are publicly offered through
broker-dealers or agents, the selling stockholder may enter into agreements
with respect thereto.  The selling
stockholder may also transfer, devise or gift these shares by other means not
described in this prospectus.  The
selling stockholder may also use any one or more of the following methods when
selling shares:


 


·                  on any national securities exchange
or quotation service on which the securities may be listed or quoted at the
time of sale or in private transactions;


 


·                  in
the over-the-counter market;


 


·                  in
transactions otherwise than on these exchanges or systems or in the
over-the-counter market;


 


·                  ordinary
brokerage transactions and transactions in which the broker-dealer solicits
purchasers;


 


·                  block
trades in which the broker-dealer will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction;


 


·                  purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;


 


·                  an
exchange distribution in accordance with the rules of the applicable
exchange;


 


·                  privately
negotiated transactions;


 


·                  short
sales;


 


·                  broker-dealers
may agree with the selling stockholder to sell a specified number of such
shares at a stipulated price per share;


 


·                  through
the writing or settlement of options or other hedging transactions entered into
after the effective date of the registration statement of which this prospectus
is a part, 


 


i

















 


whether through an
options exchange or otherwise;


 


·                  a
combination of any such methods of sale; or


 


·                  any
other method permitted pursuant to applicable law.


 


The selling stockholder may also sell shares under Rule 144
under the Securities Act, if available, rather than under this prospectus, provided it
meets the criteria and conforms to the requirements of such Rule.


 


In connection with the sale of the Common Stock or
interests therein, the selling stockholder may enter into hedging transactions
with broker-dealers or other financial institutions, which may in turn engage
in short sales of the Common Stock in the course of hedging the positions they
assume.  The selling stockholder may also
enter into option or other transactions with broker-dealers or other financial
institutions or the creation of one or more derivative securities which require
the delivery to such broker-dealer or other financial institution of shares
offered by this prospectus, which shares such broker-dealer or other financial
institution may resell pursuant to this prospectus (as supplemented to reflect
such transaction). The selling stockholder may also engage in short sales
against the box, puts and calls, loans or pledges and other transactions in
securities of the Company or derivatives of Company securities and may sell or
deliver shares in connection with these trades.


 


Broker-dealers engaged by the selling stockholder may
arrange for other broker-dealers to participate in sales.  Broker-dealers may receive commissions or
discounts from the selling stockholder (or, if any broker-dealer acts as agent
for the purchaser of shares, from the purchaser) in amounts to be
negotiated.  The selling stockholder does
not expect these commissions and discounts to exceed what is customary in the
types of transactions involved. Discounts, commissions and similar selling
expenses, if any, will be borne by the selling stockholder.


 


The selling stockholder may from time to time pledge
or grant a security interest in some or all of the shares of Common Stock owned
by it, and, if it defaults in the performance of its secured obligations, the
pledgees or secured parties may offer and sell the shares of Common Stock from
time to time under this prospectus, or under an amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities
Act amending, if necessary, the list of selling stockholders to include the
pledgee, transferee or other successors in interest as selling stockholders
under this prospectus.


 


The selling stockholder may also transfer shares of
Common Stock in other circumstances, in which case, upon notification of such transfer,
we will file, to the extent required, a supplement to this prospectus
disclosing all required information and the transferees, pledgees, assignees
and successors-in-interest will be the selling beneficial owner for purposes of
this prospectus and may sell the shares of Common Stock from time to time under
this prospectus.


 


The selling stockholder and any broker-dealers or
agents that are involved in selling the shares may be deemed to be “underwriters”
within the meaning of Section 2(11) of the Securities 


 


ii

















 


Act in
connection with such sales.  In such
event, any commissions received by such broker-dealers or agents and any profit
on the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.  The maximum commission or discount to be
received by any member of the Financial Industry Regulatory Authority (FINRA)
or independent broker-dealer will not be greater than 8% of the initial gross proceeds
from the sale of any security being sold.


 


We have agreed to indemnify
the selling stockholder against
certain liabilities, including liabilities arising under the Securities Act.  The selling
stockholder may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act.


 


Because the selling stockholder may be
deemed to be an “underwriter” within the meaning of Section 2(11) of the
Securities Act, the selling stockholder will be subject to the prospectus
delivery requirements of the Securities Act, which may include delivery through
the facilities of Nasdaq. The Company
has informed the selling stockholder that the anti-manipulative provisions of
Regulation M promulgated under the Exchange Act may apply to its sales in the
market.


 


The selling stockholder has advised us that, as of the
date of this prospectus, it has not entered into any agreements, understandings
or arrangements with any underwriters or broker-dealers regarding the sale of
its securities, nor is there an underwriter or coordinating broker acting in
connection with the proposed sale of shares by the selling stockholder.  However, the selling stockholder may enter
into agreements, understandings or arrangements with underwriters or
broker-dealers regarding the sale of its securities and upon notification by
the selling stockholder that any material arrangement has been entered into
with a broker-dealer or underwriter 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, disclosing all required information.  In addition, upon notification by the selling
stockholder that a donee or pledgee intends to sell more than 500 shares, we
will file a supplement to this prospectus.


 


The aggregate proceeds to the selling stockholder from
the sale of the Common Stock offered by the selling stockholder will be the
purchase price of the Common Stock less discounts or commissions, if any. The
selling stockholder reserves the right to accept and, together with its agents
from time to time, to reject, in whole or in part, any proposed purchase of
Common Stock to be made directly or through agents. We will not receive any of
the proceeds from this offering.


 


We will pay all fees and expenses incident to the
registration of the shares, including up to $25,000 of the fees and
disbursements of counsel to the selling stockholder.


 


We have agreed with the selling stockholder to keep
the registration statement of which this prospectus constitutes a part
effective until the earlier to occur of (x) such time as all of the shares
covered by this prospectus have been disposed of pursuant to the registration
statement  or pursuant to Rule 144
under the Securities Act, or (y) following any sale (other than pursuant
to the registration statement or Rule 144) of such shares by the selling
stockholder to any person (other than an affiliate of the selling stockholder)
who, after giving effect to such sale, owns less 


 


iii

















 


than
10% of our outstanding shares of Common Stock, at such time as such person is
able to sell all of his or its shares pursuant to Rule 144(b)(1).


 


iv