UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 20, 2005
CLINICAL DATA, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-12716 04-2573920
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
One Gateway Center, Suite 411, Newton, Massachusetts 02458
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (617) 527-9933
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. OTHER EVENTS.
Agreement and Plan of Merger
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On June 20, 2005, Clinical Data, Inc. (the "Company"), Safari Acquisition
Corporation ("Safari"), a wholly-owned subsidiary of the Company, and
Genaissance Pharmaceuticals, Inc. ("Genaissance") entered into an Agreement and
Plan of Merger (the "Merger Agreement") whereby the Company will acquire
Genaissance in a stock-for-stock reverse triangular Merger (the "Merger") valued
at approximately $56 million, including approximately $10 million in acquired
debt. In the Merger, Safari will merge with and into Genaissance, which will
result in Genaissance becoming a wholly owned subsidiary of the Company.
Following the Merger, former stockholders of Genaissance will hold approximately
40% of the outstanding capital stock of the Company.
The Merger Agreement provides that the common stockholders of Genaissance
will receive 0.065 newly issued, publicly registered shares of common stock of
the Company in exchange for each of their Genaissance common shares. The Merger
Agreement also provides that the holder of all of Genaissance Series A Preferred
Stock will receive newly issued, unregistered shares of Series A Preferred Stock
of the Company in exchange for their Genaissance preferred stock. The exchange
ratio of the Genaissance Series A Preferred Stock will be determined on the
eleventh day following the announcement of the Merger based on the average
closing prices of the Company's common stock over a specified period of time. As
more fully described herein, pursuant to an Investor Rights Agreement, the
Company has undertaken to register the shares of its common stock into which the
shares of Series A Preferred Stock are convertible. The Company will also assume
all existing Genaissance stock option plans, including all currently outstanding
stock options to acquire Genaissance common stock, as well as all outstanding
warrants for Genaissance common stock.
Certain stockholders of Genaissance will be entitled to statutory appraisal
rights under the Delaware General Corporation Law. The Merger Agreement provides
that if holders of more than 4% of the outstanding capital stock of Genaissance,
on an as-converted basis, exercise and perfect such appraisal rights, the
Company may terminate the Merger Agreement (the "Appraisal Rights Condition").
The holder of Genaissance preferred stock has entered into a Voting Agreement,
as more fully described herein, and has affirmatively waived such appraisal
rights.
During the period of time between the signing of the Merger Agreement and
the effectiveness of the Merger, Genaissance has obligated itself generally to
conduct its business only in the ordinary course and in substantially the same
manner as previously conducted. As more fully described in the Merger Agreement,
Genaissance has also agreed to not take certain actions with respect to its
capital stock, certain expenditures, incurrence of debt, sale, lease, exchange
or license of certain assets, as well as other matters. Genaissance is also
prohibited, subject to certain exceptions, from soliciting and negotiating
additional offers from third parties to purchase or merge with Genaissance.
In the Merger Agreement, the Company and Genaissance as the surviving
company have each agreed to indemnify the directors and officers of Genaissance
for all liabilities and costs arising out of any claims or suits pertaining to
the fact that such person is or was an officer or director of Genaissance,
including those claims based on matters existing at or prior to the effective
time of the Merger. The Company is obligated to advance expenses related to
defending such claims
Pursuant to the Merger Agreement, Genaissance has agreed to pay the Company
a (i) termination fee equal to approximately $1.325 million under certain
circumstances, including upon a termination of the Merger Agreement in favor of
a Superior Proposal (as defined in the Merger Agreement) and (ii) expense
reimbursement equal to $716,000 under certain other circumstances, including
upon a termination of the Merger Agreement as a result of the Appraisal Rights
Condition. In addition, the Company has agreed to pay Genaissance a termination
fee equal to approximately $1.325 million under certain circumstances and
expense reimbursement equal to $716,000 under certain other circumstances.
The Company and Genaissance will prepare and file with the Securities and
Exchange Commission ("SEC") a joint proxy statement/prospectus and registration
statement on Form S-4, and will hold separate special meetings of their
respective stockholders for purposes of approving the transactions contemplated
by the Merger Agreement. In addition to stockholder approval of both companies,
consummation of the merger is subject to a number of certain customary
conditions including the receipt of all necessary third party consents.
The foregoing description of the Merger Agreement is not complete and is
qualified in its entirety by reference to the Merger Agreement, which is filed
as Exhibit 2.1 hereto and is incorporated herein by reference. The Merger
Agreement has been included to provide information regarding its terms. It is
not intended to provide any other factual information about the Company. Such
information can be found elsewhere in this Form 8-K and in the other public
filings the Company makes with the SEC, which are available without charge at
www.sec.gov.
Investor Rights Agreement
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In connection with the Merger Agreement, the Company and RAM Trading, Ltd.
("RAM"), the sole stockholder of Genaissance Series A Preferred Stock, entered
into an Investor Rights Agreement, dated June 20, 2005 (the "Investor Rights
Agreement"). Under the Investor Rights Agreement, RAM is entitled to certain
registration rights, as well as other rights and remedies with respect to the
shares of the Company's Series A Preferred Stock to be acquired by RAM in
connection with the Merger. The Investor Rights Agreement provides that the
Company shall use commercially reasonable efforts to prepare and file a shelf
registration statement with the SEC, covering the sale of any common stock of
the Company received by RAM upon conversion of its Series A Preferred Stock. The
Company shall bear all expenses incident to the Company's performance of or
compliance with the Investor Rights Agreement, and shall reimburse RAM for any
related registration expenses incurred by RAM not to exceed $25,000.
Under the Investor Rights Agreement, RAM also is entitled to certain
protective provisions providing that, among other things, so long as RAM or its
affiliates own at least 125,000 shares of the Company's Series A Prefered Stock,
the Company shall not, without the vote or written consent of RAM: (1) authorize
or issue any capital stock having rights, preference, privileges or priorities
pari passu with or senior to the Series A Preferred Stock; or (2) directly or
indirectly redeem, purchase or otherwise acquire any of the Company's capital
stock, subject to certain exceptions.
The foregoing description of the Investor Rights Agreement is not complete
and is qualified in its entirety by reference to the Investor Rights Agreement,
which is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
The Investor Rights Agreement has been included to provide information regarding
its terms. It is not intended to provide any other factual information about the
Company. Such information can be found elsewhere in this Form 8-K and in the
other public filings the Company makes with the SEC, which are available without
charge at www.sec.gov.
Voting Agreements
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Concurrently with the execution of the Merger Agreement, on June 20, 2005,
Randal J. Kirk ("Mr. Kirk"), RJK, L.L.C., a Virginia limited liability company
that is controlled by Mr. Kirk ("RJK"), New River Management II, LP, a Virginia
limited partnership that is controlled by Mr. Kirk ("New River"), Kirkfield,
L.L.C., a Virginia limited liability company that is controlled by Mr. Kirk
("Kirkfield"), Zhong Mei, L.L.C., a Virginia limited liability company ("Zhong
Mei"), and Third Security Staff 2001 LLC, a Virginia limited liability company
("Staff LLC") entered into a Voting Agreement with Genaissance and the Company.
Additionally, on June 20, 2005, Israel M. Stein, M.D., ("Stein", and, together
with Mr. Kirk, RJK, New River, Zhong Mei, and Staff LLC, collectively, the
"Company Stockholders"), entered into a substantially similar Voting Agreement
with Genaissance and the Company, (collectively, the "Company Voting
Agreements"). Pursuant to the Company Voting Agreements, the Company
Stockholders have, among other things, agreed to vote their shares of the
Company's Common Stock (a) in favor of approving the issuance of shares of the
Company's Common Stock pursuant to the Merger Agreement and (b) against any
action or agreement submitted to the Company that would result in a breach of
the Company's representations, warranties, covenants or other obligations under
the Merger Agreement. In connection with the Company Voting Agreements, the
Company Stockholders have also granted an irrevocable proxy to Genaissance to
vote their shares of the Company's Common Stock in the manner described above.
Also concurrently with the execution of the Merger Agreement, on June 20,
2005, the Company and RAM entered into a Voting Agreement (the "RAM Voting
Agreement") with Genaissance pursuant to which RAM has agreed to vote its shares
of Genaissance Series A Preferred Stock (representing approximately 11.5% of
Genaissance's voting capital stock) (a) in favor of approving the Merger and
each of the other transactions and other matters specifically contemplated by
the Merger Agreement and (b) against any action or agreement submitted to
Genaissance that would result in a breach of Genaissance's representations,
warranties, covenants or other obligations under the Merger Agreement. In
connection with the RAM Voting Agreement, RAM has also granted an irrevocable
proxy to the Company to vote its shares of Genaissance Series A Preferred Stock
in the manner described above.
The foregoing descriptions of the Company Voting Agreements and the RAM
Voting Agreement are not complete and are qualified in their entirety by
reference to the respective voting agreements, which are filed as Exhibits 99.2
through 99.4 hereto and are incorporated herein by reference. The voting
agreements have been included to provide information regarding their terms. They
are not intended to provide any other factual information about the Company.
Such information can be found elsewhere in this Form 8-K and in the other public
filings the Company makes with the SEC, which are available without charge at
www.sec.gov.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
In connection with the Merger Agreement, on June 20, 2005, the Company
obligated itself to issue shares of its Series A Preferred Stock to RAM in the
Merger in exchange for the 460,000 shares of Genaissance Series A Preferred
Stock currently held by RAM. The number of shares of Company Series A Preferred
Stock to be issued will be determined on the eleventh day following the
announcement of the Merger based on the average closing prices of the Company's
common stock over a specified period of time. Pursuant to the terms of the
Company's Series A Preferred Stock (attached as Exhibit C to the Merger
Agreement attached hereto as Exhibit 2.1), the Series A Preferred Stock is
convertible into common stock of the Company (a) at the election of RAM at any
time and (b) at the election of the Company at such time as the market price of
the Company's common stock exceeds a certain value.
The Company believes that the foregoing transaction was exempt from the
registration requirements under Section 4(2) of the Securities Act of 1933, as
amended (the "Securities Act"), based on the fact that there was no general
solicitation, there was only one investor, who was an "accredited investor"
(within the meaning of Regulation D under the Securities Act) and was
sophisticated about business and financial matters, and who had access to
information about the Company, and all shares issued were subject to restriction
on transfer.
The foregoing description of the Company's Series A Preferred Stock terms
is not complete and is qualified in its entirety by reference to such terms,
which are filed as Exhibit C to the Merger Agreement filed as Exhibit 2.1 hereto
and is incorporated herein by reference. The Series A Preferred Stock terms have
been included to provide information regarding their provisions. They are not
intended to provide any other factual information about the Company. Such
information can be found elsewhere in this Form 8-K and in the other public
filings the Company makes with the SEC, which are available without charge at
www.sec.gov.
ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL
YEAR
On June 20, 2005, the Company's board of directors voted to amend and
restate the Company's Bylaws to update the indemnification provisions contained
therein. Specifically, the amendment (a) deleted the requirement that the
consent of the board of directors be obtained prior to bringing suits against
the Company for the purpose of enforcing the Company's obligation to advance
expenses to indemnities, and (b) to limit the Company's obligations to indemnify
officers and directors of acquired businesses with respect to their actions
taken prior to the acquisition of such businesses by the Company.
The Company's Bylaws, as amended and restated, are filed as Exhibit 3.1
hereto.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
2.1 Agreement and Plan of Merger, dated June 20, 2005, among Clinical Data,
Inc., Safari Acquisition Corporation and Genaissance Pharmaceuticals,
Inc.
3.1 Amended and Restated Bylaws, as of June 20, 2005.
99.1 Investor Rights Agreement, dated June 20, 2005, between Clinical Data,
Inc. and RAM Trading, Ltd.
99.2 Voting Agreement, dated as of June 20, 2005, among Clinical Data,
Genaissance Pharmaceuticals, Inc. and RAM Trading, Ltd.
99.3 Voting Agreement, dated as of June 20, 2005, among Clinical Data,
Genaissance Pharmaceuticals, Inc. and Israel M. Stein, M.D.
99.4 Voting Agreement, dated as of June 20, 2005, among Clinical Data,
Genaissance Pharmaceuticals, Inc., Randal J. Kirk, RJK, L.L.C., New
River Management II, LP, Kirkfield, L.L.C., Third Security Staff 2001
LLC, and Zhong Mei, L.L.C.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Clinical Data, Inc.
By: /s/ Israel M. Stein
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Israel M. Stein, M.D.
President and Chief Executive Officer
DATE: June 24, 2005
EXHIBIT INDEX
Exhibit No. Description
2.1 Agreement and Plan of Merger, dated June
20, 2005, among Clinical Data, Inc., Safari
Acquisition Corporation and Genaissance
Pharmaceuticals, Inc.
3.1 Amended and Restated Bylaws, as of June 20,
2005.
99.1 Investor Rights Agreement, dated June 20,
2005, between Clinical Data, Inc. and RAM
Trading, Ltd.
99.2 Voting Agreement, dated as of June 20,
2005, among Clinical Data, Genaissance
Pharmaceuticals, Inc. and RAM Trading, Ltd.
99.3 Voting Agreement, dated as of June 20,
2005, among Clinical Data, Genaissance
Pharmaceuticals, Inc. and Israel M. Stein,
M.D.
99.4 Voting Agreement, dated as of June 20,
2005, among Clinical Data, Genaissance
Pharmaceuticals, Inc., Randal J. Kirk, RJK,
L.L.C., New River Management II, LP,
Kirkfield, L.L.C., Third Security Staff
2001 LLC, and Zhong Mei, L.L.C.