Document:

Exhibit 10.1

 

EXECUTION COPY

 

SECURITIES
PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (this “Agreement”) is dated as of June 20,
2008, between ImmunoGen, Inc., a Massachusetts corporation (the “Company”),
and Ziff Asset Management, L.P., a Delaware limited partnership (the “Purchaser”).

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
an effective registration statement under the Securities Act (as defined
below), the Company desires to issue and sell to the Purchaser, and the
Purchaser desires to purchase from the Company, securities of the Company as
more fully described in this Agreement; and

 

WHEREAS, the
parties hereto are concurrently entering into a registration rights agreement
in the form of Exhibit A
hereto (the “Registration Rights Agreement”) pursuant to which the
Company shall register the Shares (as defined below) for resale by the
Purchaser upon the terms and subject to the conditions set forth therein.

 

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:

 

ARTICLE I.

DEFINITIONS

 

1.1           Definitions.  In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following terms have
the meanings set forth in this Section 1.1:

 

“Action” shall have
the meaning ascribed to such term in Section 3.1(j).

 

“Affiliate” means any
Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person as such
terms are used in and construed under Rule 405 under the Securities Act.

 

“Board of Directors”
means the board of directors of the Company.

 

“Business Day” means
any day except any Saturday, any Sunday, any day which is a federal legal
holiday in the United States or any day on which banking institutions in the
State of New York are authorized or required by law or other governmental
action to close.

 

“Closing” means the
closing of the purchase and sale of the Shares pursuant to Section 2.1.

 

“Closing Date” means
the date hereof.

 

“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 of the Company, par value $0.01 per 

 

 

share,
any class of common stock of the Company hereafter created, and any other class
of securities into which such Common Stock may hereafter be reclassified or
changed into.

 

“Common Stock Equivalents”
means any securities of the Company or the Subsidiaries which would entitle the
holder thereof to acquire at any time Common Stock, including, without
limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exercisable or exchangeable
for, or otherwise entitles the holder thereof to receive, Common Stock.

 

“Company Counsel”
means Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., with offices located
at One Financial Center, Boston, MA 02111.

 

“Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently herewith.

 

“Evaluation Date”
shall have the meaning ascribed to such term in Section 3.1(r).

 

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

 

“FDA” shall have the
meaning ascribed to such term in Section 3.1(gg).

 

“FDCA” shall have the
meaning ascribed to such term in Section 3.1(gg).

 

“GAAP” shall have the
meaning ascribed to such term in Section 3.1(h).

 

“Indebtedness” means (a) any
liabilities for borrowed money or amounts owed in excess of $50,000 (other than
trade accounts payable incurred in the ordinary course of business), (b) all
guaranties, endorsements and other contingent obligations in respect of
indebtedness of others, whether or not the same are or should be reflected in
the Company’s balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (c) the present value
of any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP.

 

“Intellectual Property
Rights” shall have the meaning ascribed to such term in Section 3.1(o).

 

“Lien” means any
lien, claim, pledge, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.

 

“Lock-up Agreements”
shall have the meaning ascribed to such term in Section 2.2(a)(iii).

 

“Losses” shall have
the meaning ascribed to such term in Section 4.7.

 

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“Material Adverse Effect”
shall have the meaning ascribed to such term in Section 3.1(b).

 

“Material Permits”
shall have the meaning ascribed to such term in Section 3.1(m).

 

“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.

 

“Pharmaceutical Product”
shall have the meaning ascribed to such term in Section 3.1(gg).

 

“Prospectus” means
the final prospectus filed as a part of the Registration Statement.

 

“Prospectus Supplement”
means the supplement to the Prospectus complying with Rule 424(b) of
the Securities Act that is filed with the Commission with respect to the
transactions contemplated hereby.

 

“Purchase Price”
means $25,000,000.

 

“Purchaser Party”
shall have the meaning ascribed to such term in Section 4.7.

 

“Registration Rights
Agreement” shall have the meaning set forth in the recitals of this
Agreement.

 

“Registration Statement”
means the effective registration statement with Commission file No. 333-144488
which registers the sale of the Shares to the Purchaser.

 

“Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).

 

“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.

 

“SEC Reports” shall
have the meaning ascribed to such term in Section 3.1(h).

 

“Securities Act”
means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

“Shares” means
7,812,500 shares of Common Stock to be issued to the Purchaser pursuant to this
Agreement.

 

“Short Sales” means
all “short sales” as defined in Rule 200 of Regulation SHO under the
Exchange Act and all types of direct and indirect stock pledges, forward sale 

 

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contracts,
options, puts, calls, short sales, swaps and similar arrangements (including on
a total return basis), and sales and other transactions through non-U.S.
broker-dealers or foreign regulated brokers.

 

“Subsidiary” means
any subsidiary of the Company as set forth on Schedule 3.1(a) , which
shall include any direct or indirect subsidiary of the Company formed or
acquired after the date hereof.

 

“Trading Day” means a
day on which the Nasdaq Global Market is open for trading.

 

“Trading Market”
means any of the following markets or exchanges on which the Common Stock is
then listed or quoted for trading on the date in question: the American Stock
Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange or the OTC Bulletin Board.

 

“Transaction Documents”
means this Agreement, the Registration Rights Agreement, the Lock-up Agreements
and any other documents or agreements executed in connection with the
transactions contemplated hereunder.

 

“Transfer Agent”
means Mellon Investor Service LLC, the current transfer agent of the Company,
with a mailing address of 111 Founders Plaza, Suite 1100, East Hartford,
CT 06108 and a facsimile number of (860) 528-6472 and any successor transfer
agent of the Company.

 

ARTICLE II.

PURCHASE AND SALE

 

2.1           Closing.  On the Closing Date, upon
the terms and subject to the conditions set forth herein, substantially
concurrent with the execution and delivery of this Agreement by the parties
hereto, the Company agrees to sell, and the Purchaser agrees to purchase the
Shares.  The Purchaser shall deliver to
the Company, via wire transfer, immediately available funds equal to the
Purchase Price and the Company shall deliver to the Purchaser the Shares, and
the Company and the Purchaser shall deliver the other items set forth in Section 2.2
deliverable at the Closing.  Upon
satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3,
the Closing shall occur at the offices of Fried, Frank, Harris, Shriver &
Jacobson LLP, One New York Plaza, New York, NY 10004 or such other location as
the parties shall mutually agree.

 

2.2           Closing
Deliveries.

 

(a)           On or prior to
the Closing Date, the Company shall deliver or cause to be delivered to the
Purchaser the following:

 

(i)            this Agreement
duly executed by the Company;

 

(ii)           the
Registration Rights Agreement duly executed by the Company;

 

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(iii)          lock-up agreements in substantially the form
attached hereto as Exhibit B
duly executed by the Company and each of the Persons listed in Exhibit C (collectively, the “Lock-up
Agreements”)

 

(iv)          a legal opinion of Company Counsel, substantially in
the form of Exhibit D
attached hereto;

 

(v)           a legal opinion of the Company’s General Counsel,
substantially in the form of Exhibit E
attached hereto;

 

(vi)          a copy of the irrevocable instructions to the
Company’s transfer agent instructing the transfer agent to deliver, via the
Depository Trust Company Deposit Withdrawal Agent Commission System, the Shares
to the Purchaser’s accounts, as directed by the Purchaser; and

 

(vii)         evidence of the approval for listing of the Shares
on the Nasdaq Global Market.

 

(b)           On or prior to the Closing Date, the Purchaser shall
deliver or cause to be delivered to the Company the following:

 

(i)            this Agreement duly executed by the Purchaser;

 

(ii)           the Registration Rights Agreement duly executed by
the Purchaser; and

 

(iii)          the Purchase Price by wire transfer to the account
specified in writing by the Company to the Purchaser at least three Business
days prior to the Closing Date.

 

2.3           Closing Conditions.

 

(a)           The obligations of the Company hereunder in
connection with the Closing are subject to the following conditions being met:

 

(i)            the accuracy in all material respects on the Closing
Date of the representations and warranties of the Purchaser contained herein;

 

(ii)           all obligations, covenants and agreements of the
Purchaser required to be performed at or prior to the Closing Date shall have
been performed; and

 

(iii)          the delivery by the Purchaser of the items set forth
in Section 2.2(b) of this Agreement.

 

(b)           The obligations of the Purchaser hereunder in
connection with the Closing are subject to the following conditions being met:

 

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(i)            the accuracy in all material respects on the Closing
Date of the representations and warranties of the Company contained herein;

 

(ii)           all obligations, covenants and agreements of the
Company required to be performed at or prior to the Closing Date shall have been
performed; and

 

(iii)          the delivery by the Company of the items set forth
in Section 2.2(a) of this Agreement.

 

ARTICLE
III.

REPRESENTATIONS AND WARRANTIES

 

3.1           Representations and
Warranties of the Company. 
Except as set forth in the Disclosure Schedules, which Disclosure
Schedules shall be deemed a part hereof and shall qualify any representation or
otherwise made herein to the extent of the disclosure contained in the
corresponding section of the Disclosure Schedules, the Company hereby makes the
following representations and warranties to the Purchaser as of the date of
this Agreement, except for any representations and warranties made as of other
dates set forth in such representations and warranties:

 

(a)           Subsidiaries.  All of the direct and indirect Subsidiaries
of the Company are set forth on Schedule 3.1(a).  The Company owns, directly or indirectly, all
of the capital stock or other equity interests of each Subsidiary free and
clear of any Liens, and all of the issued and outstanding shares of capital
stock of each Subsidiary are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights to subscribe for or purchase
securities created by the certificate of incorporation, bylaws or other
organizational or charter documents of such Subsidiaries or any agreement to
which the Company or any Subsidiary is a party.

 

(b)           Organization and Qualification.  The Company and each of the Subsidiaries is
an entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization (as applicable), with the requisite power and authority to own and
use its properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any
Subsidiary is in violation or default of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents.  The
Company and each of the Subsidiaries is duly qualified to conduct business and
is in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not, individually or
in the aggregate, have or reasonably be expected to result in (i) a
material adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business, prospects or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole, or (iii) a material
adverse effect on the Company’s ability to perform in any material respect on a
timely basis its obligations under any Transaction Document 

 

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(any of (i), (ii) or (iii), a “Material Adverse Effect”)
and no Action has been instituted in any such jurisdiction revoking, limiting
or curtailing or seeking to revoke, limit or curtail such power and authority
or qualification.  The Company has made
available to the Purchaser, prior to the date of this Agreement, true and
complete copies of the Amended and Restated Articles of Organization of the
Company and the Amended and Restated Bylaws of the Company, in each case as in
effect on the date of this Agreement.

 

(c)           Authorization; Enforcement.  The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
each of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder.  The execution
and delivery of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action on the part of the Company and no
further action is required by the Company, the Board of Directors or the
Company’s stockholders in connection therewith other than in connection with the
Required Approvals.  Each Transaction
Document has been (or upon delivery will have been) duly executed by the
Company and, when delivered in accordance with the terms hereof and thereof,
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.

 

(d)           No Conflicts.  The execution, delivery and performance of
the Transaction Documents by the Company, the issuance and sale of the Shares
and the consummation by the Company of the other transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii) conflict
with, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, result in the creation of any Lien upon any
of the properties or assets of the Company or any Subsidiary, or give to others
any rights of termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any note, bond, mortgage, indenture,
deed of trust, license, lease, agreement, credit facility, debt (or other
instrument evidencing a Company or Subsidiary debt or otherwise) or other
instrument or understanding to which the Company or any Subsidiary is a party
or by which any property or asset of the Company or any Subsidiary is bound or
affected, or (iii) subject to obtaining the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state
securities laws and regulations, and the regulations of any self-regulatory
organization to which the Company or its Subsidiaries are subject), or by which
any property or asset of the Company or a Subsidiary is bound or affected;
except in the case of each of clauses (ii) and (iii), such as could not,
individually or in the aggregate, have or reasonably be 

 

7

 

expected to result in a Material Adverse Effect.

 

(e)           Filings, Consents and Approvals.  The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or any other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than prior notification to NASDAQ of the issuance of the Shares, which the
Company has given in a timely manner, and (i) the filing with the
Commission of the Prospectus Supplement and (ii) such filings as are
required to be made under applicable state securities laws (the filings
required in clauses (i) and (ii), collectively, the “Required Approvals”).  Except for the Required Approvals, all
consents, authorizations, orders, filings and registrations which the Company
is required to obtain, and all notices, filings and registrations it is
required to make, in connection with the transactions contemplated by each of
the Transaction Documents have been obtained or effected or been timely made,
on or prior to the Closing Date.

 

(f)            Issuance of the Shares; Registration.  The Shares are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear
of all Liens (other than Liens created by the Purchaser).  The Company has prepared and filed the
Registration Statement in conformity in all material respects with the
requirements of the Securities Act, which became effective on August 13,
2007 (the “Effective Date”), including the Prospectus, and such
amendments and supplements thereto as may have been required to the date of
this Agreement.  The Registration
Statement is effective under the Securities Act and no stop order preventing or
suspending the effectiveness of the Registration Statement or suspending or preventing
the use of the Prospectus has been issued by the Commission and no proceedings
for that purpose have been instituted or, to the knowledge of the Company, are
threatened by the Commission.  The Shares
(i) have been registered pursuant to the Registration Statement, (ii) are
being issued pursuant to the Registration Statement and (iii) are not “restricted
securities” within the meaning of Rule 144.  Any certificate representing the Shares shall
not contain any legend or other limitation on resale.  The Company proposes to file the Prospectus
Supplement with the SEC pursuant to Rule 424(b).  At the time the Registration Statement and
any amendments thereto became effective, at the date of this Agreement and at
the Closing Date, the Registration Statement and any amendments thereto
conformed and will conform in all material respects to the requirements of the
Securities Act and did not and 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 not misleading; and the Prospectus
and any amendments or supplements thereto, at the time the Prospectus or any
amendment or supplement thereto was issued and at the Closing Date, conformed
and will conform in all material respects to the requirements of the Securities
Act and did not and will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

 

(g)           Capitalization.  The capitalization of the Company is as set
forth on 

 

8

 

Schedule 3.1(g).  The
Company has not issued any capital stock since its most recently filed periodic
report under the Exchange Act, other than pursuant to the exercise of employee
stock options, and the award of shares of Common Stock, under the Company’s
stock incentive plans that were outstanding as of the date of the most recently
filed periodic report under the Exchange Act and are reflected on Schedule
3.1(g).  No Person has any right of
first refusal, preemptive right, right of participation, or any similar right
to participate in the transactions contemplated by the Transaction Documents.  Except as set forth on Schedule 3.1(g),
there are no outstanding options, warrants, scrip rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities, rights
or obligations convertible into or exercisable or exchangeable for, or giving
any Person any right to subscribe for or acquire, any shares of Common Stock or
Common Stock Equivalents, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to issue
additional shares of Common Stock or Common Stock Equivalents.  The issuance and sale of the Shares will not
obligate the Company to issue shares of Common Stock or other securities to any
Person and will not result in a right of any holder of Company securities to
adjust the exercise, conversion, exchange or reset price under any of such
securities.  All of the outstanding
shares of capital stock of the Company are validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase
securities.  No further approval or
authorization of any stockholder, the Board of Directors or others is required
for the issuance and sale of the Shares. 
There are no stockholders agreements, voting agreements, registration
rights agreements or other similar agreements with respect to the Company’s
capital stock to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company’s stockholders.

 

(h)           SEC Reports; Financial Statements.  The Company has filed or furnished all
reports, schedules, forms, statements and other documents required to be filed
or furnished by the Company under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the
two years preceding the date hereof (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, together with
the Prospectus and the Prospectus Supplement, being collectively referred to
herein as the “SEC Reports”) on a timely basis.  As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act, as applicable, and none of the SEC Reports, when filed or
furnished, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.  There are no
outstanding comments from the Commission with respect to any SEC Report.  The Company does not have pending before the
Commission any request for confidential treatment of information.  The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission
with respect thereto as in effect at the time of filing.  Such financial statements have been prepared
in 

 

9

 

accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries as of and
for the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended, subject, in the case of unaudited statements,
to normal, immaterial, year-end audit adjustments.

 

(i)            Material Changes; Undisclosed Events,
Liabilities or Developments.

 

(i)            Since June 30, 2007, there has been no event,
occurrence or development that could, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect.

 

(ii)           Except as set forth in the latest audited
consolidated balance sheet included within the SEC Reports filed prior to the
date of this Agreement or on Schedule 3.1(i)(ii), the Company and the
Subsidiaries do not have any obligations or liabilities (whether absolute,
contingent, accrued or otherwise) other than trade payables and accrued
expenses incurred in the ordinary course of business consistent with past
practice since the date of the latest audited consolidated balance sheet
included within the SEC Reports filed prior to the date of this Agreement, that
are material to the Company and its Subsidiaries taken as a whole.

 

(iii)          Since the date of the latest audited consolidated
balance sheet included within the SEC Reports filed prior to the date of this
Agreement, (A) the Company has not altered its method of accounting in any
material respect, (B) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (C) the Company has not issued any Common Stock or Common Stock
Equivalents to any officer, director or any Affiliate of the Company, except
pursuant to existing Company stock incentive plans.

 

(iv)          Except for the issuance of the Shares contemplated
by this Agreement, no event, liability or development has occurred or exists
with respect to the Company or its Subsidiaries or their respective business,
properties, operations or financial condition, that would be required to be
disclosed by the Company under applicable securities laws and that has not been
so disclosed.

 

(j)            Litigation.  There is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction 

 

10

 

Documents or the Shares or (ii) could, individually or in the
aggregate, if there were an unfavorable decision, have or reasonably be
expected to result in a Material Adverse Effect. Neither the Company nor any
Subsidiary, nor any current director or officer thereof, is or has been the
subject of any Action involving a claim of violation of or liability under
federal or state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the knowledge of
the Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current director or officer of the
Company.  The Commission has not issued
any stop order or other order suspending the effectiveness of any registration
statement filed by the Company or any Subsidiary under the Exchange Act or the
Securities Act.

 

(k)           Labor Relations.  No labor dispute exists or, to the knowledge
of the Company, is imminent with respect to any of the employees of the Company
which, individually or in the aggregate, has had or could reasonably be
expected to result in a Material Adverse Effect.  None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship
with the Company or such Subsidiary, and neither the Company nor any of its
Subsidiaries is a party to a collective bargaining agreement, and the Company
and its Subsidiaries believe that their relationships with their employees are
good.  No executive officer, to the
knowledge of the Company, is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any other
contract or agreement or any restrictive covenant in favor of any third party,
and the continued employment of each such executive officer does not subject
the Company or any of its Subsidiaries to any liability with respect to any of
the foregoing matters. The Company and its Subsidiaries are in compliance with
all U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.

 

(l)            Compliance.  Neither the Company nor any Subsidiary (i) is
in default under or in violation of (and no event has occurred that has not
been waived that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the Company or any
Subsidiary received notice of a claim that it is in default under or that it is
in violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is
in violation of any order of any court, arbitrator or governmental body, or (iii) is
or has been since January 1, 2006, in violation of any statute, rule or
regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws applicable to its business and all such
laws that affect the environment, except in each case as could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.

 

(m)          Regulatory Permits.  The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or 

 

11

 

foreign regulatory authorities necessary to conduct their respective
businesses as described in the SEC Reports (collectively, the “Material
Permits”), except where the failure to possess such permits could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.  Neither the
Company nor any Subsidiary has received any notice of proceedings relating to
the revocation or modification of any Material Permit.

 

(n)           Title to Assets.  The Company and the Subsidiaries have good
and marketable title in fee simple to all real property owned by them and good
and marketable title in all personal property owned by them that is material to
the business of the Company and the Subsidiaries, in each case free and clear
of all Liens, except for (i) Liens that do not materially affect the value
of such property and do not materially interfere with the use made and proposed
to be made of such property by the Company and the Subsidiaries, (ii) Liens
for the payment of federal, state or other taxes, the payment of which is
neither delinquent nor subject to penalties, and (iii) Liens that could
not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.  Any real
property and facilities held under lease by the Company and the Subsidiaries
are held by them under valid, subsisting and enforceable leases with which the
Company and the Subsidiaries are in compliance.

 

(o)           Patents and Trademarks.  The Company and the Subsidiaries have, or
have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions,
copyrights, licenses and other intellectual property rights and similar rights
necessary or material for use in connection with their respective businesses as
described in the SEC Reports and which the failure to so have could,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect (collectively, the “Intellectual Property Rights”).  Neither the Company nor any Subsidiary has
received a notice (written or otherwise) that any of the Intellectual Property
Rights used by the Company or any Subsidiary violates or infringes upon the
rights of any Person.  To the knowledge
of the Company, all such Intellectual Property Rights are enforceable and there
is no existing infringement by another Person of any of the Intellectual Property
Rights.  With respect to intellectual
property owned by the Company or its Subsidiaries, the Company and its
Subsidiaries have taken reasonable security measures, except where disclosure
has been required pursuant to applicable rules and regulations of the
Patent and Trademark Office or corresponding international authorities, to
protect the secrecy, confidentiality and value of all of their intellectual
properties, except where failure to do so could not, individually or in the
aggregate, have or reasonably be expected to have a Material Adverse Effect.

 

(p)           Insurance.  The Company and the Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and
risks and in such amounts as are customary in the businesses in which the
Company and the Subsidiaries are engaged, including, but not limited to,
directors and officers insurance coverage. 
Neither the Company nor any Subsidiary has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business without a 

 

12

 

significant increase in cost.

 

(q)           Transactions with Affiliates and Employees.  Except as set forth in the SEC Reports, none
of the officers, directors or employees of the Company is presently a party to
any transaction with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner, in each
case in excess of $120,000 other than for (i) payment of salary or
consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits,
including stock option agreements under any stock option plan of the Company.

 

(r)            Sarbanes-Oxley; Internal Accounting Controls.  The Company is in material compliance with
all provisions of the Sarbanes-Oxley Act of 2002 (including all rules and
regulations promulgated thereunder) which are applicable to it as of the
Closing Date.  The Company and the
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. 
The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
Company and designed such disclosure controls and procedures to ensure that
information required to be disclosed by the Company in the reports it files or
submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission’s rules and
forms.  The Company’s certifying officers
have evaluated the effectiveness of the Company’s disclosure controls and
procedures as of the end of the period covered by the Company’s most recently
filed periodic report under the Exchange Act (such date, the “Evaluation Date”).  The Company presented in its most recently
filed periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures
based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no
changes in the Company’s internal control over financial reporting (as such
term is defined in the Exchange Act) that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting.

 

(s)           Certain Fees.  No brokerage or finder’s fees or commissions
are or will be payable by the Company to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person with
respect to the transactions contemplated by the Transaction Documents.  The Purchaser shall not have any 

 

13

 

obligation with respect to any fees or with respect to any claims made
by or on behalf of other Persons for fees of a type contemplated in this Section that
may be due in connection with the transactions contemplated by the Transaction
Documents.

 

(t)            Investment Company.  The Company is not, and is not an Affiliate
of, and immediately after receipt of payment for the Shares, will not be or be
an Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended. The Company shall conduct its business in a
manner so that it will not become subject to the Investment Company Act of
1940, as amended.

 

(u)           Registration Rights.  No Person has any right to cause the Company
to effect the registration under the Securities Act of any securities of the
Company, other than the Purchaser pursuant to the Registration Rights
Agreement.

 

(v)           Listing and Maintenance Requirements.  The Common Stock is registered pursuant to Section 12(b) of
the Exchange Act, and the Company has taken no action designed to, or which to
its knowledge is likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such
registration.  The Company has not, in
the 12 months preceding the date hereof, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the effect
that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market.  The
Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance in all material respects with all such
listing and maintenance requirements.

 

(w)          Application of Takeover Protections.  The Company and the Board of Directors have
taken all necessary action, if any, in order to render inapplicable any control
share acquisition, business combination or other similar anti-takeover
provision under the Company’s certificate of incorporation (or similar charter
documents) or the laws of its state of incorporation that is or could become
applicable to the Purchaser as a result of the Purchaser and the Company
fulfilling their obligations or exercising their rights under the Transaction
Documents, including without limitation as a result of the Company’s issuance
of the Shares and the Purchaser’s ownership of the Shares.  The Company does not have any “poison pill”
or similar arrangements.

 

(x)            Disclosure.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company confirms that neither it nor, to the Company’s knowledge, any other
Person acting on its behalf has provided the Purchaser or its agents or counsel
with any information that it believes constitutes or might constitute material,
non-public information which is not otherwise disclosed in the Prospectus
Supplement.  The Company understands and
confirms that the Purchaser will rely on the foregoing representation in
effecting transactions in securities of the Company.  All information or document furnished by or
on behalf of the Company to the Purchaser regarding the Company, its business
and the transactions contemplated hereby, including the Disclosure Schedules to
this Agreement, is true and correct and does not contain any untrue statement
of a material fact or omit to state any 

 

14

 

material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading. The
press releases disseminated by the Company during the twelve months preceding
the date of this Agreement taken as a whole do not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made and when made, not misleading.  The Company acknowledges and agrees that the
Purchaser does not make or has not made any representations or warranties with
respect to the transactions contemplated hereby other than those specifically
set forth in Section 3.2 hereof.

 

(y)           No Integrated Offering.  Neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Shares to be integrated with prior offerings by the Company for purposes of any
applicable shareholder approval provisions of any Trading Market on which any
of the securities of the Company are listed or designated or otherwise.

 

(z)            Solvency.  Based on the consolidated financial condition
of the Company as of the Closing Date, after giving effect to the receipt by
the Company of the proceeds from the sale of the Shares hereunder, (i) the
fair saleable value of the Company’s assets exceeds the amount that will be
required to be paid on or in respect of the Company’s existing debts and other
liabilities (including known contingent liabilities) as they mature, (ii) the
Company’s assets do not constitute unreasonably small capital to carry on its
business as now conducted and as proposed to be conducted including its capital
needs taking into account the particular capital requirements of the business
conducted by the Company, and projected capital requirements and capital
availability thereof, and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash,
would be sufficient to pay all amounts on or in respect of its liabilities when
such amounts are required to be paid. 
The Company does not intend to incur debts beyond its ability to pay such
debts as they mature (taking into account the timing and amounts of cash to be
payable on or in respect of its debt). 
The Company has no knowledge of any facts or circumstances which lead it
to believe that it will file for reorganization or liquidation under the
bankruptcy or reorganization laws of any jurisdiction within one year from the
Closing Date.  Neither the Company nor
any Subsidiary is in default with respect to any Indebtedness.

 

(aa)         Tax Status.  Except for matters that could not, individually
or in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect, the Company and each Subsidiary has filed all necessary
federal, state and foreign income and franchise tax returns and has paid or
accrued all taxes shown as due thereon through the date hereof, and the Company
has no knowledge of a tax deficiency which has been asserted or threatened
against the Company or any Subsidiary.

 

15

 

(bb)         Foreign Corrupt Practices.  Neither the Company, nor to the knowledge of
the Company, any agent or other person acting on behalf of the Company, has (i) directly
or indirectly, used any funds for unlawful contributions, gifts, entertainment
or other unlawful expenses related to foreign or domestic political activity, (ii) made
any unlawful payment to foreign or domestic government officials or employees
or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the Company
(or made by any person acting on its behalf of which the Company is aware)
which is in violation of law, or (iv) violated in any material respect any
provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

(cc)         Accountants.  The Company’s accounting firm is Ernst &
Young LLP.  To the knowledge and belief
of the Company, such accounting firm (i) is a registered public accounting
firm as required by the Exchange Act and (ii) shall express its opinion
with respect to the financial statements to be included in the Company’s Annual
Report on Form 10-K for the year ending June 30, 2008.

 

(dd)         Acknowledgment Regarding Purchaser’s Purchase of
Shares.  The Company acknowledges and
agrees that the Purchaser is acting solely in the capacity of an arm’s length
purchaser with respect to the Transaction Documents and the transactions
contemplated thereby.  The Company
further acknowledges that the Purchaser is not acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated thereby and any advice
given by the Purchaser or any of its representatives or agents in connection
with the Transaction Documents and the transactions contemplated thereby is
merely incidental to the Purchaser’s purchase of the Shares. The Company
further represents to the Purchaser that the Company’s decision to enter into
this Agreement and the other Transaction Documents has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company
and its representatives.

 

(ee)         Acknowledgement Regarding Purchaser’s Trading
Activity.  Anything in
this Agreement or elsewhere herein to the contrary notwithstanding, it is
understood and acknowledged by the Company (i) that the Purchaser has not
been asked by the Company to agree, nor has the Purchaser agreed, to desist
from purchasing or selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Shares for
any specified term; (ii) that past or future open market or other
transactions by the Purchaser or any entity in which the Purchaser has an
interest, specifically including, without limitation, Short Sales or “derivative”
transactions, before or after the closing of this or future transactions, may
negatively impact the market price of the Company’s publicly-traded securities;
(iii) that the Purchaser, and counter-parties in “derivative” transactions
to which the Purchaser is a party or in which the Purchaser has an interest,
directly or indirectly, presently may have a “short” position in the Common
Stock; and (iv) that the Purchaser shall not be deemed to have any
affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (a) the
Purchaser or any entity in which the Purchaser has an interest may engage in
hedging activities at various times, and (b) such hedging activities (if
any) could reduce the value 

 

16

 

of the existing stockholders’ equity interests in the Company at and
after the time that the hedging activities are being conducted.  The Company
acknowledges that such aforementioned hedging activities do not constitute a
breach of any of the Transaction Documents.

 

(ff)           Regulation M Compliance.   The
Company has not, and to its knowledge no one acting on its behalf has, (i) taken,
directly or indirectly, any action designed to cause or to result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Shares, (ii) sold, bid for,
purchased, or, paid any compensation for soliciting purchases of, any of the
Shares, or (iii) paid or agreed to pay to any Person any compensation for
soliciting another to purchase any other securities of the Company.

 

(gg)         FDA.  As to each product subject to the
jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the
Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder
(“FDCA”) that is manufactured, packaged, labeled, tested, distributed,
sold, and/or marketed by the Company or any of its Subsidiaries (each such
product, a “Pharmaceutical Product”), such Pharmaceutical Product is
being manufactured, packaged, labeled, tested, distributed, sold and/or
marketed by the Company in compliance with all applicable requirements under
FDCA and similar laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application approval,
good manufacturing practices, good laboratory practices, good clinical
practices, product listing, quotas, labeling, advertising, record keeping and
filing of reports, except where the failure to be in compliance would not have
a Material Adverse Effect.  There is no
pending, completed or, to the Company’s knowledge, threatened, action
(including any lawsuit, arbitration, or legal or administrative or regulatory
proceeding, charge, complaint, or investigation) against the Company or any of
its Subsidiaries, and none of the Company or any of its Subsidiaries has
received any notice, warning letter or other communication from the FDA or any
other governmental entity, which (i) contests the premarket clearance,
licensure, registration, or approval of, the uses of, the distribution of, the
manufacturing or packaging of, the testing of, the sale of, or the labeling and
promotion of any Pharmaceutical Product, (ii) withdraws its approval of,
requests the recall, suspension, or seizure of, or withdraws or orders the
withdrawal of advertising or sales promotional materials relating to, any
Pharmaceutical Product, (iii) imposes a clinical hold on any clinical
investigation by the Company or any of its Subsidiaries, (iv) enjoins
production at any facility of the Company or any of its Subsidiaries, (v) enters
or proposes to enter into a consent decree of permanent injunction with the
Company or any of its Subsidiaries, or (vi) otherwise alleges any
violation of any laws, rules or regulations by the Company or any of its
Subsidiaries, and which, either individually or in the aggregate, would have a
Material Adverse Effect.  The properties,
business and operations of the Company have been and are being conducted in all
material respects in accordance with all applicable laws, rules and
regulations of the FDA.  The Company has not been informed by the FDA that
the FDA will prohibit the marketing, sale, license or use in the United States
of any product proposed to be developed, produced or marketed by the Company
nor has the FDA expressed any concern as to approving or clearing for 

 

17

 

marketing any product being developed or proposed to be developed by
the Company.

 

3.2           Representations and
Warranties of the Purchaser.  The Purchaser hereby represents and warrants
as of the date hereof to the Company as follows:

 

(a)           Organization; Authority.  The Purchaser is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with full right, corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by this Agreement
and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of this Agreement
and performance by the Purchaser of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate or similar
action on the part of the Purchaser. 
Each Transaction Document to which it is a party has been duly executed
by the Purchaser, and when delivered by the Purchaser in accordance with the
terms hereof, will constitute the valid and legally binding obligation of the
Purchaser, enforceable against it in accordance with its terms, except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.

 

(b)           Own Account.  The Purchaser is acquiring the Shares as
principal for its own account and not with a view to or for distributing or
reselling such Shares or any part thereof in violation of the Securities Act or
any applicable state securities law, has no present intention of distributing
any of such Shares in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such Shares in
violation of the Securities Act or any applicable state securities law (this
representation and warranty not limiting the Purchaser’s right to sell the
Shares immediately pursuant to Rule 144 or another applicable exemption
from the registration requirements of the Securities Act or pursuant to a
registration statement filed pursuant to the Registration Rights Agreement or
otherwise in compliance with applicable federal and state securities
laws).  The Purchaser is acquiring the Shares
hereunder in the ordinary course of its business.

 

(c)           Purchaser Status.  At the time the Purchaser was offered the
Shares, it was, and at the date hereof it is either: (i) an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under
the Securities Act or (ii) a “qualified institutional buyer” as defined in
Rule 144A(a) under the Securities Act.  The Purchaser is not required to be
registered as a broker-dealer under Section 15 of the Exchange Act.  Neither BVF Partners L.P. nor BVF Inc. will
beneficially own or control the Shares to be purchased by the Purchaser.

 

(d)           Experience of Purchaser.  The Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective 

 

18

 

investment in the Shares, and has so evaluated the merits and risks of
such investment.  The Purchaser is able
to bear the economic risk of an investment in the Shares and, at the present
time, is able to afford a complete loss of such investment.

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1           Furnishing of Information.  For so long as the Purchaser owns any Shares,
(a) 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 the Exchange Act even if
the Company is not then subject to the reporting requirements of the Exchange
Act and (b) if the Company is not required to file reports pursuant to the
Exchange Act, it will prepare and furnish to the Purchaser and make publicly
available in accordance with Rule 144(c) such information as is
required for the Purchaser to sell the Shares under Rule 144.  The Company further covenants that it will
take such further action as any holder of Shares may reasonably request, to the
extent required from time to time to enable such Person to sell such Shares
without registration under the Securities Act within the requirements of the
exemption provided by Rule 144.

 

4.2           Integration.  The Company shall not sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with
the offer or sale of the Shares for purposes of the rules and regulations
of any Trading Market such that it would require shareholder approval prior to
the closing of such other transaction unless shareholder approval is obtained
before the closing of such subsequent transaction.

 

4.3           Securities Laws Disclosure;
Publicity.  The Company
shall, by 8:30 a.m. (New York City time) on the Trading Day immediately following
the date hereof, issue a Current Report on Form 8-K, disclosing the
material terms of the transactions contemplated hereby, and filing the
Transaction Documents as exhibits thereto as well as the Prospectus
Supplement.  The Company and the Purchaser
shall consult with each other in issuing any other press releases with respect
to the transactions contemplated hereby, and neither the Company nor the
Purchaser shall issue any such press release or otherwise make any such public
statement without the prior consent of the Company, with respect to any press
release or public statement of the Purchaser, or without the prior consent of
the Purchaser, with respect to any press release or public statement of the
Company.  Notwithstanding the foregoing,
the Company shall not publicly disclose the name of the Purchaser or any of its
Affiliates, or include the name of the Purchaser or any of its Affiliates in
any filing with the Commission (including the Form 8-K and the Prospectus
Supplement referred to above) or any regulatory agency or Trading Market,
without the prior written consent of the Purchaser, except that the Purchaser’s
consent shall not be required with respect to subsequent regulatory filings by
the Company if the disclosure in such subsequent regulatory filings is
identical to the disclosure previously approved in writing by the Purchaser.

 

4.4           Shareholder Rights Plan.  No claim will be made or enforced by the
Company or, with the consent of the Company, any other Person, that the
Purchaser is an “Acquiring Person” 

 

19

 

under any control share
acquisition, business combination, poison pill (including any distribution
under a rights agreement) or similar anti-takeover plan or arrangement in
effect or hereafter adopted by the Company, or that the Purchaser could be
deemed to trigger the provisions of any such plan or arrangement, by virtue of
receiving Shares under the Transaction Documents or under any other agreement
between the Company and the Purchaser.

 

4.5           Non-Public Information.  Except with respect to the
material terms and conditions of the transactions contemplated by the
Transaction Documents, the Company covenants and agrees that neither it nor any
other Person acting on its behalf will provide the Purchaser or its agents or
counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto the Purchaser shall have executed
a written agreement regarding the confidentiality and use of such information.  The Company understands and confirms that the
Purchaser shall be relying on the foregoing covenant in effecting transactions
in securities of the Company.

 

4.6           Use of Proceeds.  The Company shall use the net proceeds from
the sale of the Shares hereunder for working capital purposes and shall not use
such proceeds for (a) the satisfaction of any portion of the Company’s
debt (other than payment of trade payables in the ordinary course of the
Company’s business and prior practices) or (b) the redemption of any
Common Stock or Common Stock Equivalents.

 

4.7           Indemnification of Purchaser.  Subject to the provisions of this Section 4.7,
the Company will indemnify and hold the Purchaser and its directors, officers,
shareholders, members, partners, employees and agents (and any other Persons
with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls the Purchaser (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act), and the directors, officers,
shareholders, agents, members, partners or employees (and any other Persons
with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling
persons (each, a “Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation that any Purchaser Party may suffer
or incur (collectively, “Losses”) as a result of or relating to (a) any
breach of any of the representations or warranties made by the Company in this
Agreement or in the other Transaction Documents (without regard to any “materiality”
or Material Adverse Effect” qualifiers contained therein), to the extent that
the amount of the Losses arising from all such breaches exceeds $500,000, (b) any
breach of any of the covenants or agreements made by the Company in this
Agreement or in the other Transaction Documents (without regard to any “materiality”
or Material Adverse Effect” qualifiers contained therein) and (c) any
action instituted against any Purchaser Party in any capacity, or any of them
or their respective Affiliates, by any stockholder of the Company who is not an
Affiliate of the Purchaser, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is based upon a
breach of the Purchaser’s representations, warranties or covenants under the
Transaction Documents or any agreements or understandings the Purchaser may
have with any such stockholder or any violations by the Purchaser of state or
federal securities laws or any conduct by the Purchaser which constitutes
fraud, gross negligence, willful misconduct or 

 

20

 

malfeasance).  If any action shall be brought against any
Purchaser Party in respect of which indemnity may be sought pursuant to this
Agreement, such Purchaser Party shall promptly notify the Company in writing,
and the Company shall have the right to assume the defense thereof with counsel
of its own choosing reasonably acceptable to the Purchaser Party.  Any Purchaser Party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Purchaser Party except to the extent that (i) the employment thereof
has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and
to employ counsel, or (iii) in such action there is, in the reasonable
opinion of such separate counsel, a material conflict on any material issue
between the position of the Company and the position of such Purchaser Party,
in which case the Company shall be responsible for the reasonable fees and
expenses of no more than one such separate counsel (and local counsel).  The Company will not be liable to any
Purchaser Party under this Agreement for any settlement by a Purchaser Party
effected without the Company’s prior written consent, which shall not be
unreasonably withheld or delayed.

 

4.8           Listing of Common Stock.  The
Company hereby agrees to use commercially reasonable efforts to maintain the
listing of the Common Stock on a Trading Market and, agrees that no later than
the Closing Date, all of the Shares will be listed on such Trading Market.  The Company further agrees, if the Company
applies to have the Common Stock traded on any other Trading Market, it will
include in such application all of the Shares, and will take such other action
as is necessary to cause all of the Shares to be listed on such other Trading
Market as promptly as possible.  The
Company will take all action reasonably necessary to continue the listing and
trading of its Common Stock on a Trading Market and will comply in all respects
with the Company’s reporting, filing and other obligations under the bylaws or rules of
the Trading Market.

 

ARTICLE V.

MISCELLANEOUS

 

5.1           Fees and Expenses.  Except as expressly set forth in the
Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and
all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.  The Company shall pay all Transfer Agent
fees, stamp taxes and other taxes and duties levied in connection with the
delivery of the Shares to the Purchaser.

 

5.2           Entire Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto, the Prospectus and the Prospectus Supplement,
contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral or
written, with respect to such matters, which the parties acknowledge have been
merged into such documents, exhibits and schedules.

 

5.3           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 

 

21

 

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:

 

(a)  If to the Company:

 

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.

 

(b)  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

 

5.4           Amendments; Waivers.  No provision of this Agreement may be waived
or amended except in a written instrument signed by the Company and the
Purchaser or, in the case of a waiver, by the party against whom enforcement of
any such waived provision is sought.  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 

 

22

 

of any party to exercise any
right hereunder in any manner impair the exercise of any such right.

 

5.5           Headings.  The headings herein are for convenience only,
do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.

 

5.6           Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted
assigns.  The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Purchaser (other than by merger).  The Purchaser may assign any or all of its
rights under this Agreement to any Person to whom the Purchaser assigns or
transfers any Shares.

 

5.7           No Third-Party Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.8.

 

5.8           Governing Law.  All questions concerning the construction,
validity, enforcement and interpretation of the Transaction Documents 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 and any other Transaction
Documents (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 (including with respect to the
enforcement of any of the Transaction Documents), 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 the Transaction Documents, 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.

 

5.9           Survival.  The representations and warranties contained
herein shall survive the Closing and the delivery of the Shares.

 

5.10         Execution.  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 

 

23

 

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.

 

5.11         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.

 

5.12         Replacement of Shares.  If any certificate or instrument evidencing any
Shares is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument (without any restrictive legends), but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft
or destruction.  The applicant for a new
certificate or instrument under such circumstances shall also pay any
reasonable third-party costs (including customary indemnity) associated with
the issuance of such replacement Shares.

 

5.13         Remedies.  In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, the
Purchaser will be entitled to specific performance under the Transaction
Documents.  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 the Transaction
Documents 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.

 

5.14         Saturdays, Sundays,
Holidays, etc.  If the last
or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then such action may be
taken or such right may be exercised on the next succeeding Business Day.

 

5.15         Construction.  The parties agree that each of them and/or
their respective counsel has reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of the Transaction Documents or any
amendments hereto.

 

5.16         Waiver of Jury Trial.  In any action, suit or proceeding in any
jurisdiction brought by any party against any other party, the parties each
knowingly and intentionally, to the greatest 

 

24

 

extent permitted by
applicable law, hereby absolutely, unconditionally, irrevocably and expressly
waives forever trial by jury.

 

(Signature Page Follows)

 

25

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective authorized signatories as of the date first indicated 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 Securities Purchase Agreement]

 

26

 

Exhibit C

 

1.             Mitchel Sayare

2.             David W. Carter

3.             Stephen C. McCluski

4.             Nicole Onetto

5.             Mark Skaletsky

6.             Joseph J. Villafranca

7.             Daniel M. Junius

8.             John M. Lambert

9.             John Tagliamonte

10.           Richard J. Wallace

 

27Exhibit 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 

 

2

 

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 

 

3

 

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 

 

4

 

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 

 

5

 

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 

 

6

 

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.

 

7

 

(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 

 

8

 

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 

 

9

 

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 

 

10

 

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

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