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EXHIBIT 10.13
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into as of February 4, 2000, by and among Incyte Pharmaceuticals, Inc.,
a Delaware corporation (the "Company"), Deutsche Bank Securities Inc. and
Warburg Dillon Read LLC (the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated
February 1, 2000 (the "Purchase Agreement"), between the Company and the Initial
Purchasers. In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement. The execution of this Agreement is a condition to the Closing
under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
Capitalized terms used herein without definition shall have their
respective meanings set forth in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
a. Affiliate: "Affiliate" means, with respect to any
specified Person, (i) any other Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, such specified
Person or (ii) any officer or director of such other Person. For purposes of
this definition, the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power (whether or not exercised) to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or otherwise.
b. Common Stock: The shares of common stock, par
value $0.001 per share, of the Company issuable or issued upon conversion of the
Notes and any Common Stock issued with respect thereto upon any stock dividend,
split or similar stock.
c. Effectiveness Date: The date that is 180 days
after the date of the Closing under the Purchase Agreement.
d. Effectiveness Period: See Section 2(a) hereof.
e. Exchange Act: The Securities Exchange Act of
1934, as amended, and the rules and regulations of the SEC promulgated
thereunder.
f. Filing Date: The date that is 90 days after the
date of the Closing under the Purchase Agreement.
g. Indenture: The Indenture, dated as of February 4,
2000, between the Company and State Street Bank and Trust Company, as trustee,
pursuant to which the Notes
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are being issued, as amended or supplemented from time to time in accordance
with the terms thereof.
h. Initial Shelf Registration: See Section 2(a)
hereof.
i. Losses: See Section 5(a) hereof.
j. Notes: The 5.5% Convertible Subordinated Notes
Due 2007 of the Company being issued and sold pursuant to the Purchase Agreement
and the Indenture.
k. Purchase Agreement: See the second paragraph of
this Agreement.
l. Prospectus: The prospectus included in any
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A promulgated under
the Securities Act), as amended or supplemented by any prospectus supplement,
including, without limitation, with respect to the terms of the offering of any
portion of the Registrable Securities covered by such Registration Statement and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
m. Initial Purchasers: Deutsche Bank Securities Inc.
and Warburg Dillon Read LLC.
n. Registrable Securities: The Notes and the Common
Stock issuable upon conversion of the Notes, upon original issuance thereof and
at all times subsequent thereto, until, in the case of any such Note or share of
Common Stock, (i) it has been effectively registered under the Securities Act
and disposed of in accordance with the Registration Statement covering it, (ii)
it is saleable by the holder thereof pursuant to Rule 144(k) under the
Securities Act or (iii) it is distributed to the public pursuant to Rule 144
under the Securities Act.
o. Registration Statement: Any registration
statement of the Company which covers any of the Registrable Securities pursuant
to the provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
p. Rule 144: Rule 144 under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
q. Rule 144A: Rule 144A under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
r. SEC: The Securities and Exchange Commission.
s. Securities Act: The Securities Act of 1933, as
amended, and the rules and regulations promulgated by the SEC thereunder.
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t. Special Counsel: Latham & Watkins, or such other
special counsel to the Initial Purchasers or the holders of the Registrable
Securities as shall be specified by holders of a majority of the Registrable
Securities, the fees and expenses of which will be paid by the Company pursuant
to Section 4 hereof.
u. Subsequent Shelf Registration: See Section 2(b)
hereof.
v. TIA: The Trust Indenture Act of 1939, as amended.
w. Trustee: State Street Bank and Trust Company, as
trustee under the Indenture.
x. Underwritten Offering: A registration in which
the Registrable Securities are sold to an underwriter or underwriters for
reoffering and sale to the public.
2. Shelf Registration
a. Shelf Registration. The Company shall prepare and
file with the SEC on or prior to the Filing Date a Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415 covering the
resale from time to time by the holders thereof of all of the Registrable
Securities (the "Initial Shelf Registration"). The Initial Shelf Registration
shall be on Form S-3, Form S-1 or another appropriate form permitting
registration of such Registrable Securities for resale by such holders
(including one or more underwritten offerings). The Company shall use all
reasonable efforts to cause the Initial Shelf Registration to be declared
effective under the Securities Act on or prior to the Effectiveness Date and to
keep the Initial Shelf Registration continuously effective under the Securities
Act until the date that is two years from the last date of issuance of any of
the Notes (the "Effectiveness Period"), or such shorter period ending when (i)
all Registrable Securities covered by the Initial Shelf Registration have been
sold, or (ii) a Subsequent Shelf Registration covering all of the Registrable
Securities has been declared effective under the Securities Act or (iii) there
cease to be outstanding any Registrable Securities.
b. If the Initial Shelf Registration or any
Subsequent Shelf Registration ceases to be effective for any reason at any time
during the Effectiveness Period (other than because of the sale of all of the
securities registered thereunder), the Company shall use all reasonable efforts
to obtain the prompt withdrawal of any order suspending the effectiveness
thereof, and in any event shall within 30 days of such cessation of
effectiveness amend the Shelf Registration in a manner reasonably expected to
obtain the withdrawal of the order suspending the effectiveness thereof, or file
an additional "shelf" Registration Statement pursuant to Rule 415 covering all
of the Registrable Securities (a "Subsequent Shelf Registration"). If a
Subsequent Shelf Registration is filed, the Company shall use all reasonable
efforts to cause the Subsequent Shelf Registration to be declared effective as
soon as practicable after such filing and to keep such Registration Statement
continuously effective until the end of the Effectiveness Period.
c. The Company shall supplement and amend the Shelf
Registration or Subsequent Shelf Registration, as the case may be, if required
by the rules, regulations or
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instructions applicable to the registration form used by the Company for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Initial Purchasers or by the Trustee on behalf of the holders
of the Registrable Securities covered by such Registration Statement or by any
managing underwriter of such Registrable Securities.
3. Registration Procedures
a. In connection with the Company's registration
obligations under Section 2 hereof, the Company shall effect such registrations
to permit the sale of the Registrable Securities in accordance with the method
or methods of disposition thereof intended by the holders of such Registrable
Securities (including one or more Underwritten Offerings), and pursuant thereto
the Company shall as expeditiously as possible:
i. Prepare and file with the SEC a
Registration Statement or Registration Statements on any appropriate form under
the Securities Act available for the sale of the Registrable Securities by the
holders thereof in accordance with the intended method or methods of
distribution thereof, and cause each such Registration Statement to become
effective and remain effective as provided herein; provided, that before filing
any such Registration Statement or Prospectus or any amendments or supplements
thereto (other than documents that would be incorporated or deemed to be
incorporated therein by reference and that the Company is required by applicable
securities laws or stock exchange requirements to file) the Company shall
furnish to the holders of the Registrable Securities covered by such
Registration Statement, the Initial Purchasers and the Special Counsel, copies
of all such documents proposed to be filed, which documents will be subject to
the review of such holders and the Special Counsel, and the Company shall not
file any such Registration Statement or amendment thereto or any Prospectus or
any supplement thereto (other than such documents which, upon filing, would be
incorporated or deemed to be incorporated by reference therein and that the
Company is required by applicable securities laws or stock exchange requirements
to file) to which the holders of a majority in aggregate principal amount of the
Registrable Securities covered by such Registration Statement, the Initial
Purchasers or the Special Counsel shall reasonably object on a timely basis.
ii. Prepare and file with the SEC such
amendments and post-effective amendments to each Registration Statement as may
be necessary to keep such Registration Statement continuously effective for the
applicable period specified in Section 2; cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the methods of
disposition intended by the holders thereof set forth in such Registration
Statement as so amended or to such Prospectus as so supplemented.
iii. Notify the selling holders of Registrable
Securities, the Initial Purchasers and the Special Counsel promptly, and (if
requested by any such Person) confirm such notice in writing, (a) when a
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (b) of any request by the SEC or
any other federal or state governmental authority during the period of
effectiveness of the
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Registration Statement for amendments or supplements to a Registration Statement
or related Prospectus or for additional information, (c) of the issuance by the
SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (d) of the receipt by the Company or its legal
counsel 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, (e) of the existence of any fact or the happening of any event or
circumstance which makes any statement made in such Registration Statement or
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or which requires the making
of any changes in such Registration Statement, Prospectus or documents so that,
in the case of the Registration Statement, 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 not misleading, and
that in the case of the Prospectus, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and (f) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate.
iv. Use all reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of a Registration
Statement, or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest possible moment.
v. Subject to Section 3(c), if reasonably
requested by the Initial Purchasers or the holders of a majority in aggregate
principal amount of the Registrable Securities being sold, (a) promptly
incorporate in a Prospectus supplement or post-effective amendment such
information as the Company, the Initial Purchasers or such holders agree should
be included therein as required by applicable law, (b) make all required filings
of such Prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment, and (c)
supplement or make amendments to any Registration Statement consistent with
clause (a) or (b) above; provided, that the Company shall not be required to
take any actions under this Section 3(a)(v) that are not, in the opinion of
outside counsel for the Company, in compliance with applicable law.
vi. Furnish to each selling holder of
Registrable Securities, the Initial Purchasers and the Special Counsel, without
charge, at least one conformed copy of the Registration Statement or Statements
and any post-effective amendment thereto, including financial statements and
schedules and, if the selling holder so requests in writing, all exhibits
thereto (including those, if any, incorporated by reference).
vii. Deliver to each selling holder of
Registrable Securities, the Initial Purchasers and the Special Counsel, without
charge, as many copies of the Prospectus or Prospectuses relating to such
Registrable Securities (including each preliminary prospectus) and any amendment
or supplement thereto as such Persons may reasonably request; and the Company
hereby consents to the use of such Prospectus or each amendment or supplement
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thereto by each of the selling holders of Registrable Securities in connection
with the offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto.
viii. Prior to any public offering of Registrable
Securities, to register or qualify or cooperate with the selling holders of
Registrable Securities and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any seller reasonably requests in writing; keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and 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 applicable
Registration Statement; provided, that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or take any action that would subject it to general service of process
or to taxation in any such jurisdiction where it is not then so subject.
ix. Cause the Registrable Securities covered by
the applicable Registration Statement to be registered with or approved by such
other governmental agencies or authorities within the United States, except as
may be required solely as a consequence of the nature of such selling holder, in
which case the Company will cooperate in all reasonable respects with the filing
of such Registration Statement and the granting of such approvals, as may be
necessary to enable the seller or sellers thereof to consummate the disposition
of such Registrable Securities.
x. Upon the occurrence of any event
contemplated by Section 3(a)(iii)(e) or 3(a)(iii)(f) above during the period for
which the Company is required to maintain an effective Registration Statement,
the Company shall prepare a supplement or post-effective amendment to each
Registration Statement or a supplement to the related Prospectus or any document
incorporated therein by reference or file any other required document (such as
Current Report on Form 8-K) so that, as thereafter delivered to the purchasers
of the Registrable Securities being sold thereunder, such Prospectus will not
(a) contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading or
(b) require amendment as provided in Section 3(a)(iii)(f) above.
xi. In connection with a disposition of
Registrable Securities, (a) make available for inspection, at the offices where
normally kept during reasonable business hours, by a representative of the
holders of Registrable Securities being sold or by any Managing Underwriter
participating in any disposition of the Registrable Securities, if any, and any
attorney or accountant retained by such selling holders or Managing
Underwriters, financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries as they may reasonably request,
and (b) cause the officers, directors, employees, accountants and auditors of
the Company and its subsidiaries to supply all information reasonably requested
by any such representative, managing underwriter, attorney or accountant in
connection with such disposition; provided, that any records, information or
documents that are designated by the Company in writing as confidential at the
time of delivery of such records, information or
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documents shall be kept confidential by such Persons, and such Persons shall so
agree in writing, unless (i) such records, information or documents are in the
public domain or otherwise publicly available, (ii) disclosure of such records,
information or documents is required by court or administrative order or is
necessary to respond to inquiries of regulatory authorities or (iii) disclosure
of such records, information or documents is otherwise required by law
(including, without limitation, pursuant to the requirements of the Securities
Act).
xii. Cause the Indenture to be qualified under
the TIA not later than the effective date of the first Registration Statement
relating to the Registrable Securities; and in connection therewith, cooperate
with the Trustee and the holders of the Registrable Securities, to effect such
changes to the Indenture as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute, and use all
reasonable efforts to cause such Trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents required to
be filed with the SEC to enable the Indenture to be so qualified in a timely
manner. In the event that such qualification would require the appointment of a
new trustee under the Indenture, the Company shall appoint a new trustee
thereunder pursuant to the applicable provisions of the Indenture.
xiii. Comply with all applicable rules and
regulations of the SEC and make generally available to its security holders
earning statements satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month period (or
90 days after the end of any 12-month period if such period is a fiscal year)
commencing on the first day of the first fiscal quarter of the Company, after
the effective date of a Registration Statement, which statements shall cover
said 12-month periods.
xiv. Enter into such agreements (including, in
the event of an Underwritten Offering, an underwriting agreement in form, scope
and substance as is customary in Underwritten Offerings) and take all such other
actions in connection therewith (including, in the event of an underwritten
offering, those reasonably requested by the managing underwriters, if any, or
the holders of a majority of the Registrable Securities being sold) in order to
expedite or facilitate the disposition of such Registrable Securities and in
such connection, whether or not an underwriting agreement is entered into, and
if the registration is an underwritten registration, (a) make such
representations and warranties, subject to the Company's ability to do so, to
the holders of such Registrable Securities and the underwriters with respect to
the business of the Company and its subsidiaries, the Registration Statement,
Prospectus and documents incorporated by reference or deemed incorporated by
reference, if any, in each case, in form, substance and scope as are customarily
made by issuers to underwriters in underwritten offerings and confirm the same
if and when requested; (b) use all reasonable efforts to obtain opinions of
counsel to the Company and updates thereof (which counsel and opinions (in form,
scope and substance) shall be reasonably satisfactory to the managing
underwriters, if any, Special Counsel and the holders of a majority of the
Registrable Securities being sold) addressed to each of the underwriters
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such Special
Counsel and managing underwriters; (c) use all reasonable efforts to obtain
comfort letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other
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certified public accountants of any subsidiary of the Company or any business
acquired or to be acquired by the Company for which financial statements and
financial date is, or is required to be, included in the Registration
Statement), addressed to each of the managing underwriters, if any, such letters
to be in customary form and covering matters of the type customarily covered in
comfort letters in connection with Underwritten Offerings; and (d) deliver such
documents and certificates as may be reasonably requested by the holders of a
majority of the Registrable Securities being sold, the Special Counsel and the
managing underwriters, if any, to evidence the continued validity of the
representations and warranties of the Company and its subsidiaries made pursuant
to clause (a) above and to evidence compliance with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
Company. The above shall be done at each closing under such underwriting or
similar agreement as and to the extent required thereunder.
xv. Unless any Registrable Securities shall be
in book-entry only form, cooperate with the selling holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends; and enable such Registrable Securities to be in such denominations and
registered in such names as the holders may request.
xvi. Provide a CUSIP number for all Registrable
Securities no later than the effective date of the Registration Statement and,
unless any Registrable Securities shall be in book-entry only form, provide the
Trustee under the Indenture and the transfer agent for the Common Stock with
printed certificates for the Registrable Securities which are in a form eligible
for deposit with The Depository Trust Company.
xvii. Cause the Common Stock to be listed on each
securities exchange or quotation system on which the Company's Common Stock is
then listed no later than the date the Registration Statement is declared
effective and, in connection therewith, to the extent applicable, to make such
filings under the Exchange Act and to have such filings declared effective
thereunder.
b. The Company may require each selling holder of
Registrable Securities as to which any registration is being effected, and such
selling holder of Registrable Securities agrees, to furnish to the Company such
information regarding the distribution of such Registrable Securities as is
called for in Appendix I to the Confidential Offering Memorandum dated February
1, 2000. The Company may exclude from such registration the Registrable
Securities of any seller who unreasonably fails to furnish such information
within a reasonable time after receiving such request. Each Holder of
Registrable Securities as to which any Registration Statement is being effected
agrees promptly to furnish to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not misleading. Any sale of any Registrable Securities by any
Holder shall constitute a representation and warranty by such Holder that the
information relating to such Holder and its plan of distribution is as set forth
in the Prospectus delivered by such Holder in connection with such disposition,
that such Prospectus does not as of the time of such sale contain any untrue
statement of a material fact relating to such Holder or its plan of distribution
and that such Prospectus does not as of the time of such sale omit to state any
material fact
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relating to such Holder or its plan of distribution necessary to make the
statement in such Prospectus, in light of the circumstances under which they
were made, not misleading.
c. Each holder of Registrable Securities agrees by
acquisition of such Registrable Securities that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
3(a)(iii)(b), 3(a)(iii)(c), 3(a)(iii)(d), 3(a)(iii)(e) or 3(a)(iii)(f) hereof,
such holder will forthwith discontinue disposition of such Registrable
Securities covered by the applicable Registration Statement or Prospectus until
such holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(a)(x) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
resumed, and has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus.
The period of effectiveness of the Shelf Registration Statement provided for in
Section 2(a) above shall be extended by the number of days from and including
the date of giving such notice to and including the date when the Initial
Purchaser and the Holders shall have received such amended or supplemented
prospectus pursuant to this Section.
4. Registration Expenses
All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not any of the Registration Statements become effective and whether
or not any of the Registrable Securities are transferred pursuant to the
Registration Statement. Such fees and expenses 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
National Association of Securities Dealers, Inc., (B) with respect to
designation of the Registrable Securities as eligible for trading on the Private
Offerings, Resales and Trading through Automated Linkages ("PORTAL") market or
on the Nasdaq National Market, and (C) of compliance with securities or Blue Sky
laws (including, without limitation, reasonable fees and disbursements of
counsel for selling holders of Registerable Securities in connection with Blue
Sky qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as the holders of a majority in aggregate principal amount of the
Registrable Securities being sold may designate), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities in a form eligible for deposit with The Depository Trust
Company and of printing Prospectuses if the printing of Prospectuses is
requested by the Special Counsel or the holders of a majority in aggregate
principal amount of the Registrable Securities included in any Registration
Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company and the Special Counsel for the selling
holders of Registrable Securities or the Initial Purchasers in connection with
the Shelf Registration (provided that the Company shall not be liable for the
reasonable fees and expenses of more than one separate firm for all parties
participating in any transaction hereunder), (v) fees and disbursements of all
independent certified public accountants, (vi) fees and expenses of any
qualified independent underwriter or other independent appraiser participating
in an offering pursuant to Section 3 of Schedule E to the Bylaws of the National
Association of Securities Dealers, Inc., (vii) rating agency fees in connection
with obtaining ratings of the Notes at the time of their original issuance,
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(viii) Securities Act liability insurance if the Company so desires such
insurance, and (ix) fees and expenses of all other Persons retained by the
Company. In addition, the Company will, in any event, bear its own internal
expenses (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the
expense of any annual audit, the fees and expenses incurred in connection with
the listing of the Registrable Securities on any securities exchange on which
similar securities issued by the Company are then listed and the fees and
expenses of any Person, including special experts, retained by the Company.
5. Indemnification
a. Indemnification by the Company. The Company
shall, without limitation as to time, indemnify and hold harmless, to the
fullest extent permitted by law, each holder of Registrable Securities, the
officers, directors and agents and employees of each of them, each Person who,
controls (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) such holder and the officers, directors, agents and
employees of any such controlling person, from and against all losses, claims,
damages, liabilities, costs (including, without limitation, the costs of
preparation and attorneys' fees) and expenses (collectively, "Losses"), as
incurred, arising out of or based upon any untrue or allegedly untrue statement
of a material fact contained in any Registration Statement, Prospectus or form
of Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are based solely
upon information furnished in writing to the Company by such holder pursuant to
Section 3(b) hereof expressly for use in the Registration Statement; provided,
that the Company shall not be liable to any holder of Registrable Securities to
the extent that any such Losses arise out of or are based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary prospectus if either (A) (i) such holder failed to send or
deliver a copy of the Prospectus with or prior to the delivery of written
confirmation of the sale by such holder of a Registrable Security to the person
asserting the claim from which such Losses arise and (ii) the Prospectus would
have completely corrected such untrue statement or alleged untrue statement or
such omission or alleged omission; or (B) (x) such untrue statement or alleged
untrue statement, omission or alleged omission is completely corrected in an
amendment or supplement to the Prospectus and (y) having previously been
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, such holder thereafter fails to deliver such Prospectus
as so amended or supplemented, prior to or concurrently with the sale of a
Registrable Security to the person asserting the claim from which such Losses
arise. The Company shall also indemnify each selling broker, dealer manager and
similar securities industry professional participating in the distribution, and
each of their officers, directors, agents and employees and each Person who
controls such Persons (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) to the same extent as provided above with
respect to the indemnification of the holders of Registrable Securities.
b. Indemnification by Holder of Registrable
Securities. In connection with any Registration Statement in which a holder of
Registrable Securities is participating, such holder severally agrees to
indemnify, to the fullest extent permitted by law, the Company, its directors
and officers, agents and employees, each Person who controls the Company (within
the
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meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling persons,
from and against all Losses arising out of or based upon any untrue statement of
a material fact contained in any Registration Statement, Prospectus or
preliminary prospectus or arising out of or based upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, to the extent, but only to the extent, that such untrue
statement or omission is contained in information so furnished in writing by
such holder to the Company pursuant to Section 3(b) hereof expressly for use in
such Registration Statement or Prospectus and that such information was solely
relied upon by the Company in preparation of such Registration Statement,
Prospectus or preliminary prospectus. In no event shall the liability of any
selling holder of Registrable Securities hereunder be greater in amount than the
dollar amount of the proceeds (net of payment of all expenses) received by such
holder upon the sale of Registrable Securities giving rise to such
indemnification obligation. The Company shall be entitled to receive indemnities
from selling brokers, dealer managers and similar securities industry
professionals participating in the distribution to the same extent as provided
above with respect to information so furnished in writing by such Persons
expressly for use in any Prospectus or Registration Statement.
c. Conduct of Indemnification Proceedings. If any
Person shall be entitled to indemnity hereunder (an "indemnified party"), such
indemnified party shall give prompt notice to the party from which such
indemnity is sought (the "indemnifying party") of any claim or of the
commencement of any Proceeding with respect to which such indemnified party
seeks indemnification or contribution pursuant hereto; and the indemnifying
party, upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and any
others the indemnifying party may designate in such proceeding and shall pay the
reasonable fees and disbursements of such counsel related to such proceeding.
The failure to so notify the indemnifying party shall not relieve the
indemnifying party from any obligation or liability except and only to the
extent that such failure was prejudicial to the indemnifying party and the
indemnifying party was actually damaged or suffered any loss incurred any
additional expense as a result thereof. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (a) the fees and expenses of
more than one separate firm (in additional to any local counsel) for all Holders
and all persons, if any, who control any Holder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, and (b) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign a Registration
Statement and each person, if any, who controls the Company within the meaning
of either such Section, and that all such fees and expenses shall be reimbursed
as they are incurred. In the case of any such separate firm for the Company, and
such directors, officers and control persons of the Company, such firm shall be
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designated in writing by the Company. The indemnifying party shall not be liable
for any settlement of any proceeding affected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable or any settlement of any proceeding affected without its written consent
if (i) such settlement is entered into more than 30 days after receipt of such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. The indemnifying party shall not consent
to entry of any judgment or enter into any settlement or otherwise seek to
terminate any proceeding in which any indemnified party is or could be a party
and as to which indemnification or contribution could be sought by such
indemnified party under this Section 5, unless such judgment, settlement or
other termination includes as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release, in form and
substance satisfactory to the indemnified party, from all liability in respect
of such claim or litigation for which such indemnified party would be entitled
to indemnification hereunder.
d. Contribution. If the indemnification provided for
in this Section 5 is unavailable to an indemnified party under Section 5(a) or
5(b) hereof in respect of any Losses or is insufficient to hold such indemnified
party harmless, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall, jointly and severally, 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 or indemnifying parties, on the one hand, and such indemnified party, on
the other hand, 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 or indemnifying parties, on the
one hand, and such indemnified party, on the other hand, 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 any
legal or other fees or expenses incurred by such party in connection with any
Proceeding.
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 provision of this Section 5(d), an indemnifying
party that is a selling holder of Registrable Securities shall not be required
to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities sold by such indemnifying party and distributed
to the public were offered to the public exceeds the amount of any damages which
such indemnifying party has otherwise been
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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 such fraudulent
misrepresentation.
The indemnity, contribution and expense reimbursement
obligations of the Company hereunder shall be in addition to any liability the
Company may otherwise have hereunder, under the Purchase Agreement, the
Securities Act or otherwise. The provisions of this Section 5 shall survive so
long as Registrable Securities remain outstanding, notwithstanding any transfer
of the Registrable Securities by any holder or any termination of this
Agreement.
6. Information Requirements
a. The Company shall file in a timely manner the
reports required to be filed by it under the Securities Act and the Exchange
Act, and if at any time the Company is not required to file such reports, it
will, upon the request of any holder of Registrable Securities, make publicly
available other information so long as necessary to permit sales pursuant to
Rule 144 and Rule 144A under the Securities Act. The Company further covenants
that it will cooperate with any holder of Registrable Securities and take such
further action as any holder of Registrable Securities may reasonably request
(including without limitation making such representations as any such holder may
reasonably request), all to the extent required from time to time to enable such
holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144 and Rule 144A
under the Securities Act. Upon the request of any holder of Registrable
Securities, the Company shall deliver to such holder a written statement as to
whether it has complied with such filing requirements. Notwithstanding the
foregoing, nothing in this Section 6 shall be deemed to require the Company to
register any of its securities under any section of the Exchange Act.
b. The Company shall file in a timely manner the
reports required to be filed by it under the Exchange Act and shall comply with
all other requirements set forth in the instructions to Form S-3 in order to
allow the Company to be eligible to file registration statements on Form S-3
after February 1, 2000.
7. Liquidated Damages
a. The parties hereto agree that the holders of
Registrable Securities will suffer damages and that it would not be feasible to
ascertain the extent of such damages with precision, if (i) the Initial Shelf
Registration has not been filed on or prior to the Filing Date, (ii) the Initial
Shelf Registration has not become effective on or prior to the Effectiveness
Date, (iii) prior to the end of the Effectiveness Period, the SEC shall have
issued a stop order suspending the effectiveness of any Shelf Registration or
proceedings have been initiated under Section 8(d) or 8(e) of the Securities
Act, or (iv) a notice under Section 3(a)(iii)(e) hereof is delivered and either
(A) such notice is delivered during the period from the effective date of the
Initial Shelf Registration until 90 days thereafter (the "Initial Resale
Period"), (B) the aggregate number of days since the Initial Resale Period for
which all notices delivered pursuant to Section 3(a)(iii)(e) hereof have been in
effect exceeds 90 days or (C) such notice is either the second such notice in
any three-month period or the third such notice in any twelve-month period
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(individually referred to herein as an "Event") (the Filing Date in the case of
clause (i), the Effectiveness Date in the case of clause (ii), the date on which
the Registration Statement ceases to be effective or proceedings referred to
therein have been commenced in the case of clause (iii), and the date on which
such notice is delivered in the case of clause (iv)(A) or the date on which the
90-day limit is exceeded in the case of clause (iv)(B) or the date on which the
second or third notice, respectively, is delivered in the case of clause
(iv)(C), being referred to herein as an "Event Date").
Accordingly, upon the occurrence of each Event, in addition to
agreeing to use all reasonable efforts to ensure that the use of the Prospectus
may be resumed as quickly as practicable, commencing on the Event Date, the
Company agrees to pay, as liquidated damages, and not as a penalty, to each
holder of a Registrable Security, an additional amount (the "Liquidated Damages
Amount") equal to one-half of one percent per annum (50 basis points) per $1,000
principal amount of Notes held by such holder and one-half of one percent per
annum (50 basis points) calculated on an amount equal to the product of (x) the
Conversion Price (as defined in the Indenture) times (y) the number of shares of
Common Stock held by such holder; provided, that such liquidated damages will,
in each case, cease to accrue on and after the date the Shelf Registration is
filed, becomes effective or resumes effectiveness, or the notice under clause
3(a)(iii)(e) is no longer in effect, as the case may be.
b. The Company shall pay the liquidated damages due
on the Registrable Securities by depositing with the Trustee under the
Indenture, in trust, for the benefit of the holders thereof, at least one
business day prior to the applicable interest payment date, sums sufficient to
pay the liquidated damages then due. The liquidated damages amount due shall be
payable on each interest payment date to the record holder entitled to receive
the interest payment to be made on such date, provided that accrued liquidated
damages amounts shall be paid on the applicable redemption date upon the
redemption of any Note (to the extent accrued with respect to such Note) and, in
the event of redemption of all Notes, shall also be paid on such redemption date
to the holders of Common Stock (to the extent accrued with respect to such
Common Stock). The Trustee shall be entitled, on behalf of the holders of
Registrable Securities, to seek any available remedy for the enforcement of this
Agreement, including for the payment of such liquidated damages. All of the
Company's obligations set forth in this Section 7 which are outstanding with
respect to any Registrable Securities at the time such security ceases to be a
Registrable Security shall survive until such time as all such obligations with
respect to such security have been satisfied in full (notwithstanding
termination of the Agreement pursuant to Section 8(o).
c. The parties hereto agree that the liquidated
damages provided for in this Section 7 constitute a reasonable estimate of the
damages that may be incurred by holders of Registrable Securities (other than
the Initial Purchasers) by reason of the failure of the Shelf Registration to be
filed, be declared effective or be available for use, as the case may be, in
accordance with the provisions hereof.
8. Miscellaneous
a. Remedies. In the event of a breach by the Company
of its obligations under this Agreement, each holder of Registrable Securities,
in addition to being
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entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
b. No Inconsistent Agreements. The Company has not,
as of the date hereof, and shall not, on or after the date of this Agreement,
enter into any agreement with respect to its securities which is inconsistent
with the rights granted to the holders of Registrable Securities in this
Agreement.
c. Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended (other
than the last sentence of Section 8(g)), modified or supplemented, and waivers
or consents to departures from the provisions hereof may not be given, unless
the Company has obtained the written consent of the holders of a majority of the
then outstanding Common Stock constituting Registrable Securities (with holders
of Notes deemed to be the holders for purposes of this Section 8(c), of the
number of outstanding shares of Common Stock into which such Notes are then
convertible). Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect the rights of other holders of Registrable Securities may be given by
holders of at least a majority of the Registrable Securities being sold by such
holders; provided, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
d. Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing and shall be deemed
given (i) when made, if made by hand delivery, (ii) upon confirmation, if made
by telecopier or (iii) one business day after being deposited with a reputable
next-day courier, postage prepaid, to the parties as follows:
(a) if to a holder of
Registrable Securities, at the most current address
given by such holder to the Company in accordance with
the provisions of this Section 8(d); and
(b) if to the Company, to Incyte
Pharmaceuticals, Inc., 3174 Porter Drive, Palo Alto,
California 94304, Attention: General Counsel.
or to such other address as any party may have furnished to the other parties in
writing in accordance herewith.
e. Owner of Registrable Securities. The Company will
maintain, or will cause its registrar and transfer agent to maintain, a register
with respect to the Registrable Securities in which all transfers of Registrable
Securities of which the Company has received notice will be recorded. The
Company may deem and treat the person in whose name
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Registrable Securities are registered in such register of the Company as the
owner thereof for all purposes, including, without limitation, the giving of
notices under this Agreement.
f. Approval of Holders. Whenever the consent or
approval of holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company or its affiliates
(as such term is defined in Rule 405 under the Securities Act) (other than the
Initial Purchasers or subsequent holders of Registrable Securities if such
subsequent holders are deemed to be such affiliates solely by reason of their
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the holders of such required
percentage. For purposes of calculating the consent or approval of holders of a
majority of the then outstanding aggregate principal amount of Registrable
Securities, Registrable Securities which have been converted into shares of
Common Stock shall be deemed to bear the principal amount at which such
securities were converted.
g. 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 of any
Registrable Securities. The Company may not assign its rights or obligations
hereunder without the prior written consent of each holder of any Registrable
Securities.
h. Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
i. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
j. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
k. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, 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 all 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 which may be hereafter declared invalid, void or unenforceable.
l. Entire Agreement. This Agreement is intended by
the parties as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and the
registration rights granted by the Company with respect to the Notes sold
pursuant
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to the Purchase Agreement and the Common Stock issuable upon conversion of the
Notes. Except as provided in the Purchase Agreement, there are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to the registration rights granted by the Company with
respect to the Notes or the Common Stock issuable upon conversion of the Notes.
This Agreement supersedes all prior agreements and understandings among the
parties with respect to such registration rights.
m. Attorneys' Fees. In any action or proceeding
brought to enforce any provision of this Agreement, or where any provision
hereof is validly asserted as a defense, the prevailing party, as determined by
the court, shall be entitled to recover reasonable attorneys' fees in addition
to any other available remedy.
n. Further Assurances. Each of the parties hereto
shall use all reasonable efforts to take, or cause to be taken, all appropriate
action, do or cause to be done all things reasonably necessary, proper or
advisable under applicable law, and execute and deliver such documents and other
papers, as may be required to carry out the provisions of this Agreement and the
other documents contemplated hereby and consummate and make effective the
transactions contemplated hereby.
o. Termination. This Agreement and the obligations
of the parties hereunder shall terminate at the end of the Effectiveness Period,
except for any liabilities or obligations under Sections 4 or 5 or the proviso
of Section 3(a)(xi) above, and the obligations to make payments of and provide
for liquidated damages under Section 7 hereof to the extent such damages accrue
prior to the end of the Effectiveness Period, each of which shall remain in
effect in accordance with their terms.
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
Incyte Pharmaceuticals, Inc.
By: /s/ John M. Vuko
Title: Chief Financial Officer
Accepted as of the date first above written:
DEUTSCHE BANK SECURITIES INC.
WARBURG DILLON READ LLC
As the Initial Purchasers:
By: Deutsche Bank Securities Inc.
By: /s/ James Scopa
Title: Managing Director
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