CONFIDENTIAL TREATMENT REQUEST EXECUTION COPY
EXHIBIT 10.63
PORTIONS OF THIS EXHIBIT WERE OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
FILED WITH THE COMMISSION PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE
ACT OF 1934. SUCH PORTIONS ARE MARKED BY ASTERISKS.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made as of December
20, 2002 by and between Genome Therapeutics Corp., a Massachusetts corporation
(the "Company"), and Amgen Inc., a Delaware corporation ("Purchaser").
RECITALS
a. The Company and Purchaser have entered into a research
collaboration and license agreement dated the date hereof (the "Collaboration
Agreement") related to the discovery and development of human therapeutics for
the treatment of osteoporosis and other diseases;
b. In connection with the Collaboration Agreement, the Company and
the Purchaser have agreed that the Purchaser will purchase up to an aggregate
value of ***** of the Company's common stock, par value $0.10 per share (the
"Common Stock"); and
c. The Company and Purchaser are executing and delivering this
agreement in reliance upon the exemption from registration under the Securities
Act of 1933, as amended, by virtue of Section 4(2) thereof and Regulation D, as
promulgated thereunder by the U.S. Securities and Exchange Commission.
NOW, THEREFORE, in consideration of the premises and mutual promises
made herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged the parties hereto, intending to be
legally bound, hereby confirm their respective agreements as follows:
1. AUTHORIZATION AND PURCHASE OF THE SHARES.
1.1 Authorization of the Shares. The Company's Board of
Directors has authorized the issuance by the Company and the sale to the
Purchaser of fully paid and nonassessable shares of Common Stock, all as more
fully described, and subject to the conditions set forth, below (the "Shares").
1.2 Purchase of Shares. Subject to the terms and conditions
set forth below, the Company agrees to issue to Purchaser, and Purchaser hereby
agrees to purchase from the Company, the Shares in consideration for the rights
granted to the Company under the Collaboration Agreement and for cash
consideration at such times and in the amounts as more fully described, and
subject to the conditions set forth, below. A copy of the Collaboration
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CONFIDENTIAL TREATMENT REQUEST EXECUTION COPY
Agreement, in the form to be executed and delivered by each of Purchaser and the
Company on the date hereof, is annexed hereto as Exhibit 1.
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2. THE CLOSING.
2.1 Closing Dates. Each closing of the purchase and sale of
the Shares to Purchaser hereunder (the "Closings") shall be held at the offices
of the Company, within thirty (30) days of the achievement of each of the
milestones referenced in Section 2.2 hereof, at 5:00 p.m., Massachusetts time,
or at such other date, time and place as the Company and Purchaser mutually
agree upon, orally or in writing (the "Closing Dates"). On each Closing Date,
the Company shall deliver to Purchaser the Shares registered in the name of
Purchaser.
2.2 Schedule of Closings. Purchaser shall purchase at the
Fair Market Value per share (a) that number of shares equal to ***** upon
satisfaction of the *****; (b) that number of shares ***** upon satisfaction of
*****; and (c) that number of shares equal to *****. For the purposes of this
Agreement, "Fair Market Value" means 125% of the average closing stock price
over the period of time *****. The Company and Purchaser acknowledge and agree
that at no time shall Purchaser's equity interest in the Company ***** of the
outstanding shares of the Company's Common Stock. If, at the time of a Closing,
the requirement to purchase Shares at such Closing, in accordance with the
milestones set forth above would result in Purchaser owning an equity interest
***** of the outstanding shares of the Company's Common Stock at such time,
Purchaser's obligation to purchase such Shares as such Closing shall be limited
to that amount of Common Stock that would result in the cumulative purchase of
an equity interest of ***** of the Company's Common Stock, and Purchaser shall
have no further obligation to purchase additional stock at a later date or of
any other form of payment to the Company with respect to that particular
milestone.
2.3 Option of the Company. Notwithstanding anything in this
Agreement to the contrary, the obligation of the Company to sell Shares to
Purchaser upon satisfaction of the conditions set forth above will be at the
option of the Company. If the Company elects not to sell Shares to Purchaser,
then it must deliver written notice to Purchaser of such election within ten
business days of the date the Company is notified of satisfaction of the
applicable milestone. If the Company so elects, Purchaser will be relieved of
its obligation to purchase such Shares and will be under no further obligation
to purchase such Shares at a future date or make any other form of payment to
the Company with respect to that particular milestone.
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3. CONDITIONS OF THE PURCHASER'S OBLIGATIONS.
The obligations of Purchaser to the Company under this Agreement
are subject to the fulfillment, on or before each Closing, of each of the
following conditions, unless otherwise waived by Purchaser:
3.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 5 shall be true and correct in
all material respects on and as of such Closing with the same effect as though
such representations and warranties had been made on and as of the date of such
Closing.
3.2 Performance. The Company shall have performed and
complied in all material respects with all covenants, agreements, obligations
and conditions contained in this Agreement that are required to be performed or
complied with by it on or before such Closing.
3.3 Qualifications. All authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state or other self-regulatory body that are required to be in
effect as of such Closing in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall be obtained and effective as of such
Closing.
3.4 Consents and Waivers. The Company shall have obtained
any and all consents and waivers necessary or appropriate for consummation of
the transactions contemplated by this Agreement (except as such as may be
properly obtained subsequent to such Closing).
3.5 Compliance Certificate. The President of the Company
shall deliver to Purchaser at each Closing a certificate certifying that the
conditions specified in Sections 3.1, 3.2, 3.3, 3.4, 3.6, 3.9 and 3.10 have been
fulfilled.
3.6 Collaboration Agreement. Purchaser and the Company shall
have executed and delivered the Collaboration Agreement and the Collaboration
Agreement shall be in full force and effect. Purchaser shall have made the
applicable milestone payment under the Collaboration Agreement corresponding to
such Closing, whether by payment or pursuant to any offset provided under the
Collaboration Agreement.
3.7 Opinion of Company Counsel. Purchaser shall have
received from outside counsel for the Company a legal opinion, dated as of the
applicable Closing Date, containing the opinions attached hereto as Exhibit 3.7,
subject, in each case, to such outside counsel's customary exceptions,
qualifications and assumptions.
3.8 Bankruptcy Proceeding. Neither the Company nor any of
its Subsidiaries (as defined below) (a) has instituted or consented to the
institution of any proceeding under a Debtor Relief Law relating to it or to all
or any material part of its respective property; (b) is unable or has admitted
in writing its inability to pay its debts as they mature; (c) has made an
assignment for the benefit of creditors; or (d) applied for or consented to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; nor has any receiver, trustee, custodian, conservator,
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liquidator, rehabilitator or similar officer been appointed without the
application or consent of the Company or any of its Subsidiaries. No proceeding
under a Debtor Relief Law relating to the Company or any of its Subsidiaries or
to all or any part of their respective property has been instituted without the
consent of the Company or any of its Subsidiaries and continued undismissed or
unstayed for 30 days. For the purposes of this Agreement, "Debtor Relief Laws"
means the Bankruptcy Code of the United States of America, as amended from time
to time, and all other applicable liquidation, conservatorship, bankruptcy,
assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief laws from
time to time in effect affecting the rights of creditors generally.
3.9 Nasdaq Listing. The Shares to be purchased at such
Closing shall have been listed on The Nasdaq Stock Market, Inc. Nation Market.
3.10 Change of Control. Between the date hereof and the
applicable Closing, there shall not have been a Change of Control of the
Company. For the purposes of this Agreement, "Change of Control" shall have the
meaning set forth in the Collaboration Agreement.
4. CONDITIONS OF THE COMPANY'S OBLIGATIONS.
The obligations of the Company to Purchaser under this Agreement
are subject to the fulfillment, on or before each Closing, of each of the
following conditions, unless otherwise waived by Company:
4.1 Representations and Warranties. The representations and
warranties of Purchaser contained in Section 6 shall be true and correct in all
material respects on and as of such Closing with the same effect as though such
representations and warranties had been made on and as of such Closing.
4.2 Performance. Purchaser shall have performed and complied
in all material respects with all covenants, agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by it on or before such Closing.
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5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to Purchaser as follows:
5.1 Organization. The Company is duly organized and validly
existing in good standing under the laws of the jurisdiction of its
organization. Each of the Company and its Subsidiaries (as defined in Rule 405
under the Securities Act of 1933, as amended (the "Securities Act")) has full
power and authority to own, operate and occupy its properties and to conduct its
business as presently conducted and as described in the SEC Documents
(hereinafter defined) and is registered or qualified to do business and in good
standing in each jurisdiction in which it owns or leases property or transacts
business and where the failure to be so qualified would have a material adverse
effect upon the business, financial condition, properties or operations of the
Company and its Subsidiaries, considered as one enterprise. The Company has no
subsidiaries other than Collaborative Securities Corp. and Collaborative
Genetics, Inc. (each, a "Subsidiary").
5.2 Due Authorization; Consents. The Company has all
requisite corporate power and has taken all requisite corporate action to
execute and deliver each of this Agreement and the Collaboration Agreement
(collectively, the "Transaction Agreements"), to sell and issue the Shares and
to carry out and perform all of its obligations hereunder and thereunder. Each
of the Transaction Agreements has been duly authorized, executed and delivered
on behalf of the Company and constitutes the valid and binding agreement of the
Company, enforceable in accordance with its terms. All consents, approvals and
authorizations of, and registrations, qualifications and filings with, any
federal or state governmental agency, authority or body, or any third party,
required in connection with the execution, delivery and performance of this
Agreement and the Collaboration Agreement, the valid issuance and sale of the
Shares to be sold pursuant to this Agreement and the consummation of the
transactions contemplated hereby and thereby have been obtained or will be
obtained as of each Closing and are effective as of each Closing, except for any
securities filings required to be made under federal or state securities laws.
5.3 Validity of Securities. The Shares, when sold against
the consideration therefore as provided herein, will be duly authorized and
validly issued, fully paid and nonassessable and free of any liens or
encumbrances arising through the Company. The issuance and delivery of the
Shares is not subject to preemptive or any similar rights of the stockholders of
the Company or any liens or encumbrances arising through the Company.
5.4 SEC Documents; Financial Statements. Each of (a) the
Company's Annual Report on Form 10-K for the most recently completed fiscal
year, (b) the Company's most recently filed Notice of Annual Meeting of
Stockholders and Proxy Statement and (c) the Company's Quarterly Reports on Form
10-Q, and all other documents, if any, filed by the Company since the date of
the most recently filed Annual Report on Form 10-K pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act;" collectively, the above documents shall be referred to hereinafter as the
"SEC Documents"), as filed by the Company with the Securities and Exchange
Commission (the "SEC") or incorporated by reference therein complied in all
material respects to the requirements of the Exchange Act, and the rules,
regulations and instructions of the SEC thereunder. Each of
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the SEC Documents, as of its respective filing date, contained no untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances in which they were made, not misleading. The financial
statements of the Company included in the SEC Documents (the "Financial
Statements") comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto. Except as may be indicated in the Financial Statements or
the notes thereto, the Financial Statements have been prepared in accordance
with generally accepted accounting principles ("GAAP") consistently applied and
fairly present the consolidated financial position and operating results of the
Company and its Subsidiaries as of the dates, and for the periods, indicated
therein.
5.5 Non-Contravention. The execution and delivery of the
Agreement, the issuance and sale of the Shares to be sold by the Company under
this Agreement, the fulfillment of the terms of the Transaction Agreements and
the consummation of the transactions contemplated hereby and thereby will not
(A) conflict with or constitute a violation of, or default (with the passage of
time or otherwise) under, (i) any bond, debenture, note or other evidence of
indebtedness, or under any lease, contract, indenture, mortgage, deed of trust,
loan agreement, joint venture or other agreement or instrument to which the
Company or any Subsidiary is a party or by which it or any of its Subsidiaries
or their respective properties are bound, (ii) the charter, by-laws or other
organizational documents of the Company or any Subsidiary, or (iii) any law,
administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to the Company or any
Subsidiary or their respective properties, except where, in the cases of clauses
(i) and (iii) of this Section 5.5, any such conflict, violation, or default
would not, individually or in the aggregate have a material adverse effect on
the Company, or (B) result in the creation or imposition of any lien,
encumbrance, claim, security interest or restriction whatsoever upon any of the
properties or assets of the Company or any Subsidiary or an acceleration of
indebtedness pursuant to any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or any indenture,
mortgage, deed of trust or any other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them is bound or to
which any of the property or assets of the Company or any Subsidiary is subject.
5.6 Liabilities. Except as set forth in the SEC Documents,
the Company has no material indebtedness for borrowed money that the Company has
directly or indirectly created, incurred, assumed, or guaranteed, or with
respect to which the Company has otherwise become directly or indirectly liable.
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5.7 Capitalization. The capitalization of the Company is as
set forth in the SEC Documents. Since the date of the most recent SEC Document
which includes a full description of the capitalization of the Company, the
Company has not issued any capital stock other than pursuant to (i) employee
benefit plans disclosed in the SEC Documents, or (ii) outstanding warrants or
options disclosed in the SEC Documents. The outstanding shares of capital stock
of the Company have been duly and validly issued and are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and were not issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities. Except as a result of
the purchase and sale of the Shares and except as disclosed in Schedule 5.7,
which schedule shall only be required to be provided at each Closing, or as set
forth in or contemplated by the SEC Documents, there are no outstanding rights
(including, without limitation, preemptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any unissued
shares of capital stock or other equity interest in the Company or any
Subsidiary, or any contract, commitment, agreement, understanding or arrangement
of any kind to which the Company is a party or of which the Company has
knowledge and relating to the issuance or sale of any capital stock of the
Company or any Subsidiary, any such convertible or exchangeable securities or
any such rights, warrants or options. Without limiting the foregoing, no
preemptive right, co-sale right, right of first refusal, registration right, or
other similar right exists with respect to the Shares or the issuance and sale
thereof. No further approval or authorization of any stockholder, the Board of
Directors of the Company or others is required for the issuance and sale of the
Shares. The Company owns the entire equity interest in each of its Subsidiaries,
free and clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest, other than as described in the SEC Documents. Except as
disclosed in the SEC Documents, there are no stockholders agreements, voting
agreements or other similar agreements with respect to the Common Stock to which
the Company is a party or, to the knowledge of the Company, between or among any
of the Company's stockholders.
5.8 Legal Proceedings. There is no material legal or
governmental proceeding pending or, to the knowledge of the Company, threatened
to which the Company or any Subsidiary is or may be a party or of which the
business or property of the Company or any Subsidiary is subject that is not
disclosed in the SEC Documents.
5.9 No Violations. Neither the Company nor any Subsidiary is
in violation of its charter, bylaws, or other organizational document, or in
violation of any law, administrative regulation, ordinance or order of any court
or governmental agency, arbitration panel or authority applicable to the Company
or any Subsidiary (including without limitation, all foreign, federal, state and
local laws relating to taxes, environmental protection, occupational health and
safety, product quality and safety and employment and labor matters), which
violation, individually or in the aggregate, would be reasonably likely to have
a material adverse effect on the business or financial condition of the Company
and its Subsidiaries, considered as one enterprise, or is in default (and there
exists no condition which, with the passage of time or otherwise, would
constitute a default) in any material respect in the performance of any bond,
debenture, note or any other evidence of indebtedness in any indenture,
mortgage, deed of trust or any other material agreement or instrument to which
the Company or any Subsidiary is a party or by which the Company or any
Subsidiary is bound or by which the properties of the Company or any Subsidiary
are bound.
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5.10 Title to Properties and Assets. Except as set forth in
the SEC Documents, the Company has good and marketable title to its properties
and assets held in each case subject to no lien of any kind except for liens for
taxes that are not yet due and payable or, in the case of leased real property,
easements and other rights or restrictions of record that do not materially
impair the use or value of such property to the Company. With respect to the
property and assets it leases, the Company is in material compliance with such
leases and, to the Company's knowledge, the Company holds valid leasehold
interests in such assets free of any liens, encumbrances, security interests or
claims of any party other than the lessors of such property and assets.
5.11 Intellectual Property. (i) Each of the Company and its
Subsidiaries owns or possesses sufficient rights to use all patents, patent
rights, trademarks, copyrights, licenses, inventions, trade secrets, trade names
and know-how (collectively, "Intellectual Property") described or referred to in
the SEC Documents as owned by it or that are necessary for the conduct of its
business as now conducted or as proposed to be conducted as described in the SEC
Documents except where the failure to currently own or possess would not have a
material adverse effect on the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its Subsidiaries
considered as one enterprise, and (ii) neither the Company nor any of its
Subsidiaries has received any notice of, or has any knowledge of, any violation
or infringement by a third party of any Intellectual Property that, individually
or in the aggregate, would have a material adverse effect on the financial
condition or business of the Company and its Subsidiaries considered as one
enterprise.
5.12 No Infringement. Except as disclosed in the SEC
Documents, to the Company's knowledge, the Company has not violated or
infringed, and, to the Company's knowledge, is not currently violating or
infringing, and the Company has not received any communications alleging that
the Company (or any of its employees or consultants) has violated or infringed
or, by conducting its business as currently proposed, would violate or infringe,
any Intellectual Property of any other person or entity.
5.13 No Material Adverse Change. Since the date of the latest
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, there has not been
(i) any material adverse change in the financial condition or operating results
of the Company or its Subsidiaries, (ii) any material adverse event affecting
the Company or its Subsidiaries, (iii) any obligation, direct or contingent,
that is material to the Company and its Subsidiaries considered as one
enterprise, incurred by the Company or any Subsidiary, except obligations
incurred in the ordinary course of business (iv) any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company or any of
its Subsidiaries, or (v) any loss or damage (whether or not insured) to the
physical property of the Company or any of its Subsidiaries which has been
sustained which has a material adverse effect on the condition (financial or
otherwise), operating results, operations or business of the Company and its
Subsidiaries considered as one enterprise.
5.14 Disclosure. No representation or warranty by the Company
in the Transaction Agreements or in any statement or certificate signed by any
officer of the Company furnished or to be furnished to the Purchaser pursuant to
this Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to state any material fact required to
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be stated therein or necessary in order to make the statements therein, in light
of the circumstances in which they are made, not misleading.
5.15 Exchange Market Compliance. The Company's Common Stock
is listed on the Nasdaq Stock Market, Inc. National Market (the "Nasdaq National
Market") or such other nationally recognized exchange or quotation system,
including, but not limited to, the Nasdaq SmallCap Market or the OTC Bulletin
Board. The Company has taken no action that is likely to have the effect of
causing the Common Stock to be delisted from the Nasdaq National Market or such
other nationally recognized exchange or quotation system. The Company's Common
Stock is registered pursuant to Section 12(g) of the Exchange Act, and the
Company has taken no action that 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 SEC is contemplating terminating such
registration.
5.16 Listing. The Company shall comply with all requirements
of the National Association of Securities Dealers, Inc. ("NASD") with respect to
the issuance of the Shares and the listing thereof on the Nasdaq National Market
or other trading market on which the Common Stock is listed or quoted, if
applicable.
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants to the Company as
follows:
6.1 Investment Experience. Purchaser is an "accredited
investor" within the meaning of Rule 501 under the Securities Act. Purchaser is
aware of the Company's business affairs and financial condition and has, in
reliance upon the representations and warranties contained in this Agreement,
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Shares. Purchaser has such business and
financial experience as is required to give it the capacity to protect its own
interests in connection with the purchase of the Shares. Purchaser has had the
opportunity to ask questions and receive answers concerning the terms and
conditions of its purchase of the Shares and to obtain any additional
information from the Company that is necessary to verify the information
furnished in the SEC Documents.
6.2 Investment Intent. Purchaser is purchasing the Shares
for investment for its own account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning of the Securities
Act. Purchaser understands that the Shares have not been registered under the
Securities Act or registered or qualified under any state securities law in
reliance on specific exemptions therefrom, which exemptions may depend upon,
among other things, the bona fide nature of Purchaser's investment intent as
expressed herein.
6.3 Due Authorization. Purchaser has all requisite corporate
power and has taken all requisite corporate action to execute and deliver this
Agreement and to carry out and perform all of its obligations hereunder. This
Agreement has been duly authorized, executed and delivered on behalf of
Purchaser and constitutes the valid and binding agreement of Purchaser,
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy,
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insolvency, reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally and (ii) as limited by equitable
principles generally.
6.4 No Legal, Tax or Investment Advice. Purchaser
understands that nothing in this Agreement or any other materials presented to
Purchaser in connection with the purchase and sale of the Shares constitutes
legal, tax or investment advice. Purchaser has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Shares.
7. RESTRICTIONS ON TRANSFER OF SECURITIES; REGISTRATION OF THE
SHARES; COMPLIANCE WITH THE SECURITIES ACT.
7.1 Restrictions on Transferability Prior to Registration.
The Securities shall not be offered, resold, pledged or otherwise transferred
from Purchaser to a transferee other than (i) in accordance with the provisions
of this Section 7 or (ii) in a transaction meeting the requirements of Rule 144
under the Securities Act ("Rule 144") or otherwise in accordance with the
Securities Act and the applicable securities laws of any state of the United
States or any other applicable jurisdiction, provided that Purchaser provides
prior notice to the Company and, if reasonably requested by the Company,
delivers to the Company an opinion of counsel, reasonably satisfactory to the
Company, that such disposition will not require registration under the
Securities Act. Notwithstanding the foregoing, the Company hereby consents to
and agrees to register on the books of the Company and with any transfer agent
for the securities of the Company, any transfer of Shares by Purchaser to an
"affiliate" (as such term is defined in Rule 144) of such Purchaser, provided
that the transferee certifies to the Company that it is an "accredited investor"
within the meaning of Rule 501 under the Securities Act and that it is acquiring
the Shares solely for investment purposes. As a condition of such transfer, any
such transferee shall agree in writing to be bound by the terms of Section 7 of
this Agreement and, so long as Purchaser transfers ***** of the Shares held by
it at such time to the transferee, such transferee shall have the rights of
Purchaser under Section 7 of this Agreement; provided, however, with respect to
any subsequent transfer of Shares by any such subsequent transferee, such Shares
shall not be considered Registrable Securities (as defined below) under this
Agreement. Purchaser will be required to notify any subsequent transferee of any
then existing resale restrictions as set forth above and to comply with the
provisions of this Section 7.
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7.2 Restrictive Legends. Each certificate representing any
of the Shares (or any other securities issued in respect of the Shares upon any
stock split or stock dividend) shall (unless otherwise permitted by the
provisions hereof) be stamped or otherwise imprinted with a legend substantially
in the following form (in addition to any legend required under applicable
federal or state securities laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF THE HOLDER HEREOF ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS, AND
THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE (INCLUDING
ANY FUTURE HOLDER) IS BOUND BY THE TERMS OF A STOCK PURCHASE AGREEMENT
BETWEEN THE ORIGINAL PURCHASER AND THE COMPANY (COPIES OF WHICH MAY BE
OBTAINED FROM THE COMPANY).
Such legend shall be removed by delivery of substitute certificates
without legend: (i) if the Shares have been sold pursuant to an effective
registration statement, or (ii) if Rule 144(k) may be utilized by the seller of
such security, or (iii) if such legend is not required under applicable
requirements of the Securities Act.
7.3 Registration Procedures and Expenses.
(a) Shelf Registration.
(i) Shelf Registration Statement. Upon the request
of the Holders of a majority of Registrable Securities (as defined below), the
Company shall prepare and file or cause to be prepared and filed with the SEC
promptly, but in no event later than ten business days, after receipt of such
request a Registration Statement (as defined below) for an offering to be made
on a delayed or continuous basis pursuant to Rule 415 of the Securities Act
registering the resale from time to time by the Holders (as defined below) of
all of the Registrable Securities acquired by the Holders at such Closing (each
a "Shelf Registration Statement"). *****. For the purposes of this Agreement,
"Registration Statement" shall mean any registration statement under the
Securities Act of the Company that covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the related Prospectus,
all amendments and supplements to such registration statement, 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; "Registrable Securities" shall mean the Shares and any
shares of common stock which may be issued or distributed with respect to, or in
exchange for, such Registrable Securities pursuant to a stock dividend, stock
split or other distribution, merger, consolidation, recapitalization or
reclassification or similar transaction; "Holders" shall mean any person owning
or having the right to acquire Registrable Securities or any assignee thereof in
accordance with Sections 7.1 or 9.4; and "Prospectus" shall mean the prospectus
included in any Registration Statement (including a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A),
12
CONFIDENTIAL TREATMENT REQUEST
as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement and all other amendments and supplements to such
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus. The
Shelf Registration Statement shall be on Form S-3 or, if Form S-3 is
unavailable, another appropriate form permitting registration of such
Registrable Securities for resale by such Holders in accordance with the methods
of distribution set forth in the Shelf Registration Statement (such methods of
distribution to include underwritten offerings and other methods designated in
writing by the Holders pursuant to Section 7.3(d)). The Company shall not permit
any securities other than the Registrable Securities to be included in the Shelf
Registration Statement. The Company shall use commercially reasonable efforts to
cause the Shelf Registration Statement to be declared effective under the
Securities Act by the date (the "Shelf Effectiveness Deadline Date") that, if
the Registration Statement is to be filed on Form S-3, is thirty (30) days after
receipt of the request for such filing, and, if the Registration Statement is to
be filed on Forms S-1, S-2, or any other appropriate form permitting
registration of such Registrable Securities for resale by such Holders, is
ninety (90) days after receipt of the request for such filing. The Company shall
use commercially reasonable efforts to keep the Shelf Registration Statement
continuously effective under the Securities Act (subject to Section 7.3(a)(v))
until the earlier of (x) the second anniversary of the date such Shelf
Registration Statement is declared effective and (y) the sale of all of the
Registrable Securities included in the Shelf Registration Statement (such period
as may be extended in accordance with the proviso in Section 7.3(a)(ii), the
"Shelf Effectiveness Period"). Each Holder agrees that if such Holder wishes to
sell Registrable Securities pursuant to the Shelf Registration Statement and
related Prospectus, it will do so only in accordance with this Section 7.3(a).
(ii) Subsequent Shelf Registrations. If the initial
Shelf Registration Statement or any Subsequent Shelf Registration Statement
ceases to be effective for any reason at any time during the Shelf Effectiveness
Period (other than because of the sale of all of the Registrable Securities),
the Company shall use commercially reasonable efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof, and in any event
shall within twenty (20) days of such cessation of effectiveness (or, if the
cessation of effectiveness occurs during a Deferral Period, within five Business
Days of the end of such Deferral Period) amend the Shelf Registration Statement
in a manner reasonably expected by the Company to obtain withdrawal of the order
suspending the effectiveness thereof, or file an additional "shelf" Registration
Statement pursuant to Rule 415 of the Securities Act covering all of the
Registrable Securities (a "Subsequent Shelf Registration Statement") to permit
registration of the Registrable Securities. If a Subsequent Shelf Registration
Statement is filed, the Company shall use its commercially reasonable efforts to
cause the Subsequent Shelf Registration Statement to be declared effective under
the Securities Act as soon as reasonably practicable after such filing or, if
filed during a Deferral Period, immediately after completion of the Deferral
Period, and to keep such Registration Statement continuously effective until the
end of the Shelf Effectiveness Period; provided, however, that, unless all
Registrable Securities included on the Shelf Registration Statement have been
sold, the Shelf Effectiveness Period shall be extended by the aggregate number
of days such Registration Statement was not effective as a result of Deferral
Periods or Transaction Delay Periods. As used herein, the term "Shelf
Registration Statement" means the Shelf Registration Statement and any
Subsequent Shelf Registration Statement.
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CONFIDENTIAL TREATMENT REQUEST
(iii) Amendments to Shelf Registration Statement. The
Company shall promptly supplement and amend the Shelf Registration Statement and
any related Prospectus if required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Shelf
Registration Statement, if required by the Securities Act or as requested by
Purchaser or by the Shelf Underwriter.
(iv) Underwritten Syndicated Offerings.
(A) If one or more Holders proposes to sell
Registrable Securities in an underwritten syndicated offering pursuant to the
Shelf Registration Statement, such Holder or Holders may request the Company in
writing to effect such underwritten syndicated offering by supplement or
amendment to the Shelf Registration Statement, stating the number of Registrable
Securities proposed to be sold. The Company and all Holders proposing to
distribute Registrable Securities through such underwritten syndicated offering
shall enter into an underwriting agreement in customary form with the
underwriters for the offering.
(B) Any underwritten syndicated offering
requested pursuant to this Section 7.3(a)(iv) shall be underwritten by an
underwriter selected by the Holders (the "Shelf Underwriter").
(C) Notwithstanding any provision of this
Agreement to the contrary, the Company shall not be required to effect an
offering pursuant to this Section 7.3(a)(iv) during any Transaction Delay Period
(as defined below) if, promptly, but in no event later than three business days,
following the Company's receipt of a request from a Holder to effect an offering
pursuant to this Section 7.3(a)(iv), the Company furnishes such Holder with a
certificate signed by an executive officer of the Company (a "Transaction Delay
Notice") to the effect that the Company prior to the Company's receipt of such
request, had commenced preparations for the filing of a registration statement
pertaining to a public offering of securities of the Company for the account of
the Company (a "Company Offering"). Any "Transaction Delay Period" shall be the
period commencing on the day the Company furnishes a Transaction Delay Notice
and continuing until the ***** following the effectiveness of the registration
statement relating to the applicable Company Offering, (B) promptly after the
abandonment of the applicable Company Offering, or (C) ***** after the date of
the Transaction Delay Notice. The Company may deliver no more than *****
Transaction Delay Notices in any twelve-month period, and the aggregate duration
of all Transaction Delay Periods shall not exceed ***** in any twelve-month
period. The Company shall use commercially reasonable efforts to cause any such
registration statement relating to any such Company Offering to become effective
as soon as possible.
(D) *****
(E) If in an underwritten syndicated
offering requested pursuant to this Section 7.3(a)(iv), the Shelf Underwriter
reasonably advises the Company in writing that, in its opinion, the number of
Registrable Securities requested to be included in such offering exceeds the
number that can be sold in such offering at a price reasonably related to the
then current market value of such securities, there shall be included in such
offering only the
14
CONFIDENTIAL TREATMENT REQUEST
Registrable Securities that the Shelf Underwriter so advises may be sold at a
price reasonably related to the then current market value of such securities.
(v) Suspension of Shelf Registration Statement. Upon
(A) the issuance by the SEC of a stop order suspending the effectiveness of the
Shelf Registration Statement or the initiation of proceedings with respect to
the Shelf Registration Statement under Section 8(d) or 8(e) of the Securities
Act or (B) the occurrence of a Material Event (as defined below) or the
non-availability of financial statements required in the Shelf Registration
Statement, the Company shall (i) in the case of clause (B) above, subject to the
next to last sentence of this Section 7.3(a)(v), as promptly as practicable
prepare and file a post-effective amendment to the Shelf Registration Statement
or a supplement to the related Prospectus or any document incorporated therein
by reference or file any other required document that would be incorporated by
reference into the Shelf Registration Statement and Prospectus so that such
Shelf Registration Statement does 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 related
Prospectus does 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, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a
post-effective amendment to the Shelf Registration Statement, subject to the
next to last sentence of this Section 7.3(a)(v), use commercially reasonable
efforts to cause it to be declared effective as soon as possible, and (ii) give
notice to the Holders named as selling security holders in the Prospectus that
the availability of the Shelf Registration Statement is suspended (a "Deferral
Notice"). Upon receipt of any Deferral Notice, each Holder agrees not to sell
any Registrable Securities pursuant to the Registration Statement until such
Holder's receipt of copies of the supplemented or amended Prospectus provided
for in clause (i) above, or until it is advised in writing by the Company that
the Prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such Prospectus. The Company will use commercially reasonable efforts to
ensure that the use of the Prospectus may be resumed (x) in the case of clause
(A) above, as promptly as is practicable, but ***** after the Deferral Notice is
given to the Holders, or (y) in the case of clause (B) above, as soon as in the
good faith judgment of the Company the public disclosure of such Material Event
would not be prejudicial to or contrary to the interests of the Company, but
***** after the Deferral Notice is given to the Holders. The period during which
the availability of the Shelf Registration Statement and any related Prospectus
is suspended pursuant to Section 7.3(a)(v) (the "Deferral Period") shall not
exceed ***** in any three (3) month period and ***** during the Shelf
Effectiveness Period. For the purposes of this Agreement, a "Material Event"
shall mean any event or the existence of any fact as a result of which the
Company shall determine in its reasonable discretion that a Registration
Statement shall 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, or any Prospectus shall 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 (including, in any such
case, as a result of the non-availability of financial statements).
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CONFIDENTIAL TREATMENT REQUEST
(b) Holders Incidental Registration. Subject to
Section 7.3(f), the Company determines, in its sole discretion, that it shall
file a registration statement under the Securities Act (other than (i) a
registration statement providing for an offering on a delayed or continuous
basis pursuant to Rule 415 of the Securities Act or (ii) a registration
statement on Form S-4 or S-8 or any successor or similar forms) registering an
underwritten offering of Common Stock for cash consideration on any form that
also would permit the registration of the Registrable Securities and such filing
is to be on its behalf and/or on behalf of selling holders of the Company's
securities, the Company shall each such time promptly give each Holder written
notice of such determination setting forth the date on which the Company
proposes to file such registration statement, and advising each Holder of its
right to have Registrable Securities included in such registration. The Company
will select the managing underwriter and all other underwriters in any
underwritten offering pursuant to this Section 7.3(b). Upon the written request
of any Holder received by the Company no later than ten (10) days after the date
of the Company's notice, the Company shall use commercially reasonable efforts
to cause to be registered under the Securities Act all of the Registrable
Securities that each such Holder has so requested to be registered; provided
that if, at any time after giving written notice of its intention to register
any securities and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for any
reason not to proceed with the proposed registration of the securities to be
sold by it, the Company may, at its election, give written notice of such
determination to each Holder of Registrable Securities and, thereupon, shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration (but not from its obligation to pay the registration
expenses pursuant to Section 7.3(e) in connection therewith). If, in the written
opinion of the managing underwriter, the total amount of such securities to be
so registered, including such Registrable Securities, will exceed the maximum
amount of the Company's securities that can be marketed either (a) at a price
reasonably related to the then current market value of such securities, or (b)
without otherwise materially and adversely affecting the entire offering, then
the Company shall include in such registration first (1st), all the securities
the Company proposes to sell for its own account or is required to register on
behalf of any third party exercising demand registration rights and without
having the adverse effect referred to above, and second (2nd), all Registrable
Securities requested to be included in such registration by the Holders pursuant
to this Section 7.3(b) and all shares of Common Stock requested to be included
by third parties exercising the rights similar to those granted in this Section
7.3(b) up to the number which the Company has been advised can be sold in such
offering without having either of the adverse effects referred to above. The
number of such Registrable Securities requested to be included in such
registration by the Holders pursuant to this Section 7.3(b) shall be limited to
such extent and shall be allocated pro rata among all such requesting Holders
and third parties exercising rights similar to those granted in this Section
7.3(b) on the basis of the relative number of Registrable Securities each such
Holder has requested to be included in such registration and the number of
shares of Common Stock requested to be included in such registration by such
third parties.
(c) Obligations of the Company. Whenever required
under Section 7.3(a) or Section 7.3(b) to use commercially reasonable efforts to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as possible:
(i) prepare and file with the SEC a Registration
Statement with respect to such Registrable Securities and use commercially
reasonable efforts to cause such
16
CONFIDENTIAL TREATMENT REQUEST
Registration Statement to become and remain effective for the period of the
distribution contemplated thereby;
(ii) prepare and file with the SEC such amendments
and supplements to such Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep such Registration Statement
effective for the Shelf Effectiveness Period in the case of the Shelf
Registration Statement or for a period not in excess of sixty (60) days (or such
shorter period during which the distribution of securities thereunder continues)
in the case of all other Registration Statements contemplated by this Agreement,
cause the related Prospectus to be supplemented by any Prospectus supplement
required by applicable law, and as so supplemented to be filed pursuant to the
Securities Act and to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by such
Registration Statement in accordance with the intended methods of disposition by
the seller or sellers thereof, and furnish to the Holders of the Registrable
Securities copies of any such amendments and supplements prior to their being
used or filed with the SEC, which amendments and supplements will be subject to
the review of the Holders and their counsel;
17
CONFIDENTIAL TREATMENT REQUEST
(iii) furnish to the Holders such reasonable numbers
of copies of the Registration Statement and any Prospectus included therein
(including each preliminary Prospectus and any amendments or supplements thereto
(including all exhibits and documents incorporated by reference) in conformity
with the requirements of the Securities Act) and such other documents and
information as they may reasonably request and make available for inspection by
the parties referred to in Section 7.3(c)(iv) below such financial and other
information and books and records of the Company, and cause the officers,
directors, employees, counsel and independent certified public accountants of
the Company to respond to such inquiries, as shall be reasonably necessary, in
the judgment of the respective counsel referred to in such Section 7.3(c)(iv);
(iv) provide (1) the Holders of the Registrable
Securities to be included in such Registration Statement, (2) the Shelf
Underwriter or Demand Underwriter, as applicable, (3) the sales or placement
agent, if any, therefor, (4) counsel for the Shelf Underwriters or Demand
Underwriters or agent, as applicable, and (5) not more than one outside counsel
for all the Holders of such Registrable Securities the opportunity to
participate in the preparation of such Registration Statement, each Prospectus
included therein or filed with the SEC, and each amendment or supplement
thereto, and (a) promptly incorporate in a Prospectus supplement or
post-effective amendment such information as the Shelf Underwriter or Demand
Underwriter, as applicable, its counsel, or such Holders' counsel reasonably
determine is necessary and appropriate to be included therein, (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 such Registration Statement;
(v) use commercially reasonable efforts to register
or qualify the Registrable Securities covered by such Registration Statement
under such other securities or Blue Sky laws of such jurisdictions within the
United States as the Holders shall request for the distribution of the
Registrable Securities covered by the Registration Statement; provided, however,
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business in or to file a general consent to service of
process in any jurisdiction wherein it would not but for the requirements of
this paragraph (v) be obligated to do so;
(vi) promptly notify the selling Holders, the sales
or placement agent, if any, and the Shelf Underwriter or Demand Underwriter, as
applicable, (1) when such Registration Statement, amendment, supplement or
post-effective amendment has been filed, and, with respect to such Registration
Statement or any post-effective amendment, when the same has become effective,
(2) of any comments by the SEC or by any Blue Sky or securities commissioner or
regulator of any state with respect thereto, (3) of the issuance by the SEC of
any stop order suspending the effectiveness of such Registration Statement or
the initiation or threatening of any proceedings for that purpose, or (4) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;
18
CONFIDENTIAL TREATMENT REQUEST
(vii) subject to Sections 7.3(a)(v) use commercially
reasonable efforts to obtain the withdrawal of any order suspending the
effectiveness of such Registration Statement and use its commercially reasonable
efforts to cause such Registrable Securities covered by any such Registration
Statement to be registered with or approved by such other governmental agencies
or authorities as may be necessary to enable the Holders to consummate the
disposition of such Registrable Securities;
(viii) furnish on the date that the Registrable
Securities are delivered to the Shelf Underwriter or Demand Underwriter, as
applicable, for sale pursuant to such registration, (1) a signed opinion, dated
such date, of the outside legal counsel representing the Company for the purpose
of such registration, addressed to the Shelf Underwriter or Demand Underwriter,
as applicable, as to such matters as such underwriters may reasonably request
and as would be customary in such a transaction; and (2) letters dated such date
and the date the offering is priced from the independent certified public
accountants of the Company, addressed to the Shelf Underwriter or Demand
Underwriter, as applicable, (i) stating that they are independent certified
public accountants within the meaning of the Securities Act and that, in the
opinion of such accountants, the financial statements and other financial data
of the Company included in the Registration Statement or the Prospectus, or any
amendment or supplement thereto, comply as to form in all material respects with
the applicable accounting requirements of the Securities Act and (ii) covering
such other financial matters with respect to the registration in respect of
which such letter is being given as the Shelf Underwriter or Demand Underwriter,
as applicable, may reasonably request and as would be customary in such a
transaction;
(ix) enter into customary agreements (including,
without limitation, an underwriting agreement in customary form) and take such
other actions as are reasonably required in order to expedite or facilitate the
disposition of the Registrable Securities to be so included in the Registration
Statement;
(x) cooperate with the Holders of the Registrable
Securities and the Shelf Underwriter or Demand Underwriter, as applicable, to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold, and enable such Registrable Securities to be
in such denominations and registered in such names as the Shelf Underwriter or
Demand Underwriter, as applicable, may request at least five Business Days prior
to any sale of the Registrable Securities;
(xi) otherwise comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as soon as
reasonably practicable, but not later than eighteen months after the effective
date of the Registration Statement, an earnings statement covering the period of
at least twelve months beginning with the first full month after the effective
date of such Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;
(xii) use commercially reasonable efforts to list the
Registrable Securities covered by such Registration Statement with any
securities exchange on which the Common Stock of the Company is then listed; and
19
CONFIDENTIAL TREATMENT REQUEST
(xiii) use commercially reasonable efforts to make
available appropriate senior executive officers of the Company to participate in
customary "road show" presentations that may be reasonably requested by the
Holders in any underwritten syndicated offering; provided that the participation
of such senior executive officers shall not interfere with the conduct of their
duties to the Company.
With respect to registration required pursuant to Section 7.3(a), the period of
distribution of Registrable Securities in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it but in no event longer than
forty-five (45) days from the effective date.
(d) Furnish Information. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Agreement that the Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them, and the intended
method of disposition of such securities as the Company shall reasonably request
in writing and as shall be required in connection with the action to be taken by
the Company.
(e) Expenses of Registration.
(i) Shelf and Requested Registration. All expenses
incurred in connection with each registration pursuant to Section 7.3(a),
including without limitation all registration, filing and qualification fees,
word processing, duplicating, printers' and accounting fees (including the
expenses of any special audits or "cold comfort" letters required by or incident
to such performance and compliance), fees of the NASD or listing fees, messenger
and delivery expenses, all fees and expenses of complying with state securities
or Blue Sky laws, and fees and disbursements of counsel for the Company and one
outside legal counsel for the Holders (if such Registration Statement is on Form
S-3, such fees and disbursements for outside legal counsel for the Holders shall
*****, or, if such Registration Statement is on another form permitting
registration of such Registrable Securities for resale by such Holders, such
fees and disbursements shall be limited to reasonable fees and disbursements),
hired to review and oversee any offering, shall be borne by the Company. The
Holders shall bear and pay the underwriting commissions and discounts applicable
to the Registrable Securities offered for their account in connection with any
regulations, filings and qualifications made pursuant to this Agreement.
(ii) Incidental Registration. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications of Registrable Securities pursuant to
Section 7.3(b) for each Holder, including without limitation all registration,
filing and qualification fees, word processing, duplicating, printers' and
accounting fees (including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance), fees of the
NASD or listing fees, messenger and delivery expenses, all fees and expenses of
complying with state securities or Blue Sky laws, and fees and disbursements of
counsel for the Company, shall be paid by the Company. The Holders shall bear
and pay the underwriting commissions and discounts applicable to the Registrable
Securities offered for their account in connection with any regulations, filings
and qualifications
20
CONFIDENTIAL TREATMENT REQUEST
made pursuant to this Agreement, as well as related fees and disbursements of
counsel or other advisors to Holders.
(f) Underwriting Requirements. In connection with
any underwritten offering, the Company shall not be required under Section
7.3(b) to include Registrable Securities in such underwritten offering unless
the Holder of such Registrable Securities accepts the terms of the underwriting
of such offering that have been reasonably agreed upon between the Company and
the underwriters selected by the Company in accordance with the terms of this
Agreement.
7.4 Indemnification. For the purpose of this Section 7.4:
(a) the term "Selling Stockholder" shall include
Holders and any "affiliate" (as such term is defined in Rule 144) of any such
Holder, and their respective permitted transferees and assigns;
(b) the term "untrue statement" shall, with respect
to any Registration Statement, include any untrue statement or alleged untrue
statement of a material fact contained in the related Registration Statement, or
any omission or alleged omission to state in the related Registration Statement
a material fact required to be stated therein or necessary to make the
statements therein, not misleading, and, with respect to any Prospectus, include
any untrue statement or alleged untrue statement of a material fact contained in
the related Prospectus, or any omission or alleged omission to state in the
related Prospectus 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.
(i) The Company agrees to indemnify and hold
harmless the Selling Stockholder (and each person, if any, who controls the
Selling Stockholder within the meaning of Section 15 of the Securities Act, each
officer of the Selling Stockholder and each director of the Selling Stockholder)
from and against any losses, claims, damages or liabilities to which the Selling
Stockholder (or any such officer, director or controlling person) may become
subject (under the Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon (i) any untrue statement or (ii) any failure by the
Company to fulfill any undertaking included in the related Registration
Statement, and the Company will reimburse the Selling Stockholder promptly as
incurred for any legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim, provided,
however, that the Company shall not be liable in any such case to the extent
that such loss, claim, damage or liability (A) arises out of, or is based upon,
an untrue statement made in conformity with written information furnished to the
Company by the Selling Stockholder specifically for use in preparation of the
Registration Statement or Prospectus (which has not been subsequently corrected
or supplemented), (B) results directly from the failure of the Selling
Stockholder to comply in all material respects with its covenants and agreements
contained in Section 7 hereof respecting sale of the Shares, or (C) arises out
of any statement or omission in any Prospectus that is corrected in any
subsequent Prospectus that was delivered to the Selling Stockholder prior to the
pertinent sale or sales by the Selling Stockholder.
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CONFIDENTIAL TREATMENT REQUEST
(ii) The Selling Stockholder agrees to indemnify and
hold harmless the Company (and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, each officer of the
Company and each director of the Company) from and against any losses, claims,
damages or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement if such untrue statement was made in conformity with written
information furnished by the Selling Stockholder specifically for use in
preparation of the Registration Statement or Prospectus, and the Selling
Stockholder will reimburse the Company promptly as incurred for any legal or
other expenses reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim, provided, however, that the Selling
Stockholder need not indemnify any of the aforementioned indemnitees for such
losses, claims, damages or liabilities arising from any statement or omission in
any Prospectus that is corrected in any subsequent Prospectus if the subsequent
Prospectus was furnished to the person or entity asserting the loss, claim,
damage or liability prior to the pertinent transaction or transactions. The
Selling Stockholder will reimburse the Company (or such officer, director or
controlling person), as the case may be, for any legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
indemnifiable action, proceeding or claim; provided that the Selling
Stockholder's obligation to indemnify the Company shall be limited to the net
amount received by the Selling Stockholder from the sale of the Shares to which
the loss related.
(iii) Promptly after receipt by any indemnified person
of a notice of a claim or the beginning of any action in respect of which
indemnity is to be sought against an indemnifying person pursuant to this
Section 7.4, such indemnified person shall notify the indemnifying person in
writing of such claim or of the commencement of such action, but the omission to
so notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party under this Section 7.4 (except to the extent
that such omission materially and adversely affects the indemnifying party's
ability to defend such action) or from any liability otherwise than under this
Section 7.4. Subject to the provisions hereinafter stated, in case any such
action shall be brought against an indemnified person, the indemnifying person
shall be entitled to participate therein, and, to the extent that it shall elect
by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, shall be entitled to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
person. After notice from the indemnifying person to such indemnified person of
its election to assume the defense thereof, such indemnifying person shall not
be liable to such indemnified person for any legal expenses subsequently
incurred by such indemnified person in connection with the defense thereof,
provided, however, that if there exists or shall exist a conflict of interest
that would make it inappropriate, in the opinion of counsel to the indemnified
person, for the same counsel to represent both the indemnified person and such
indemnifying person or any "affiliate" or "associate" (as those terms are
defined in Rule 405 promulgated under the Securities Act) thereof, the
indemnified person shall be entitled to retain its own counsel at the expense of
such indemnifying person; provided, however, that no indemnifying person shall
be responsible for the fees and expenses of more than one separate counsel
(together with appropriate local counsel) for all indemnified parties. In no
event shall any indemnifying person be liable in respect of any amounts paid in
settlement of any action unless the indemnifying person shall have approved the
terms of such settlement; provided that
22
CONFIDENTIAL TREATMENT REQUEST
such consent shall not be unreasonably withheld. No indemnifying person shall,
without the prior written consent of the indemnified person, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified person is or could have been a party and indemnification could have
been sought hereunder by such indemnified person, unless such settlement
includes an unconditional release of such indemnified person from all liability
on claims that are the subject matter of such proceeding.
(iv) If the indemnification provided for in this
Section 7.4 is unavailable to or insufficient to hold harmless an indemnified
party under subsection (i) or (ii) above in respect of any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Selling
Stockholder on the other in connection with the statements or omissions or other
matters which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, in the case of an untrue statement, whether the untrue statement
relates to information supplied by the Company on the one hand or the Selling
Stockholder on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement. The
Company and the Selling Stockholder agree that it would not be just and
equitable if contribution pursuant to this subsection (iv) were determined by
pro rata allocation (even if Selling Stockholder were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to above in this subsection (iv).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (iv) shall be deemed to include any reasonable legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (iv), Selling Stockholder shall not be required to
contribute any amount in excess of the amount by which the net amount received
by Selling Stockholder from the sale of the Shares to which such loss relates
exceeds the amount of any damages which Selling Stockholder has otherwise been
required to pay by reason of such untrue statement. 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. Selling Stockholder's obligations
in this subsection to contribute are several in proportion to their sales of
Shares to which such loss relates and not joint.
(v) The parties to this Agreement hereby acknowledge
that they are sophisticated business persons who were represented by counsel
during the negotiations regarding the provisions hereof including, without
limitation, the provisions of this Section 7.4, and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Section
7.4 fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement as required by the Securities
Act and the Exchange Act. The parties are advised that federal or state public
policy as interpreted by the courts in certain jurisdictions may be contrary to
certain of the provisions of this Section 7.4, and the parties hereto hereby
expressly waive and
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CONFIDENTIAL TREATMENT REQUEST
relinquish any right or ability to assert such public policy as a defense to a
claim under this Section 7.4 and further agree not to attempt to assert any such
defense.
7.5 Termination of Conditions and Obligations. The
conditions precedent imposed by this Section 7 upon the transferability of the
Shares shall cease and terminate as to any particular number of the Shares (i)
when such Shares shall have been effectively registered under the Securities Act
and sold or otherwise disposed of in accordance with the intended method of
disposition set forth in the Registration Statement covering such Shares, (ii)
when such Shares are sold pursuant to Rule 144 or (iii) at such time as an
opinion of counsel reasonably satisfactory to the Company shall have been
rendered to the effect that such conditions are not necessary in order to comply
with the Securities Act.
7.6 Information Available. So long as a Registration
Statement is effective covering the resale of Shares owned by Purchaser, the
Company will furnish to Purchaser:
(a) as soon as practicable after it is available,
one copy of (i) its Annual Report to Stockholders (which Annual Report shall
contain financial statements audited in accordance with generally accepted
accounting principles by a national firm of certified public accountants), (ii)
its Annual Report on Form 10-K and amendments, if any, and (iii) its Quarterly
Reports on Form 10-Q and amendments, if any (the foregoing, in each case,
excluding exhibits);
(b) upon the request of Purchaser, all exhibits
excluded by the parenthetical to subparagraph (a) of this Section 7.6 as filed
with the SEC and publicly available and all other information that is made
available to shareholders; and
(c) promptly upon the request of Purchaser, an
adequate number of copies of the Prospectuses to supply to any other party
requiring such Prospectuses; and the Company, upon the request of Purchaser,
will meet with Purchaser or a representative thereof at the Company's
headquarters, or such other mutually agreed upon location, to discuss all
information relevant for disclosure in a Registration Statement covering the
Shares and will otherwise cooperate with any Purchaser conducting an
investigation for the purpose of reducing or eliminating such Purchaser's
exposure to liability under the Securities Act, including the reasonable
production of information at the Company's headquarters.
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CONFIDENTIAL TREATMENT REQUEST
8. COMPANY REPORTS FILED UNDER THE EXCHANGE ACT.
With a view to making available to Purchaser the benefits of
Rule 144 and other rules or regulations of the SEC that may permit the Purchaser
to sell the Shares without registration, for the first two years in which
Purchaser owns Shares issued in each Closing, the Company covenants and agrees
to (a) comply with all of the reporting requirements of the Exchange Act
applicable to it and shall comply with all other public information reporting
requirements of the SEC that are conditions to the availability of Rule 144 for
the sale of the Shares and (b) furnish to Purchaser, upon request, a written
statement by the Company that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, and such other information as
may be reasonably requested in order to avail the Purchaser of any rule or
regulation of the SEC that permits the selling of any such Shares without
registration.
9. MISCELLANEOUS.
9.1 Waivers and Amendments. The terms of this Agreement may
be waived or amended only with the written consent of the Company and Purchaser.
9.2 Governing Law; Jurisdiction. This Agreement shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Delaware without regard to conflict of
laws. The Company and Purchaser each hereby irrevocably submit to the
nonexclusive jurisdiction of any court of the State of Delaware, both state and
federal, for the purpose of any suit, action or other proceeding arising out of
this Agreement.
9.3 Survival. The covenants and agreements made under
Section 7 of this Agreement shall survive any Closing or any termination of the
Collaboration Agreement.
9.4 Successors and Assigns. The provisions hereof shall
inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto. In the event of any merger,
consolidation or acquisition involving the Company in which the Company is not
the surviving entity, the Company's obligations hereunder, including the
continued registration of the Shares pursuant to Section 7 hereof shall be
expressly or by operation of law assumed by the surviving entity.
9.5 Entire Agreement. The Transaction Agreements constitute
the full and entire understanding and agreement between the parties with regard
to the subject hereof; provided, however, that nothing in the Transaction
Agreements shall be deemed to terminate or supersede the provisions of any
confidentiality and disclosure agreements executed by the parties hereto prior
to the date hereof, which agreements shall continue in full force and effect
until terminated in accordance with their respective terms.
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CONFIDENTIAL TREATMENT REQUEST
9.6 Notices, etc. All notices and other communications
required or permitted hereunder shall be effective upon receipt and shall be in
writing and may be delivered in person, by facsimile, overnight delivery service
or U.S. mail, in which event it may be mailed by first-class, certified or
registered, postage prepaid, addressed:
if to Purchaser, at
Amgen Inc.
One Amgen Center Drive
Thousand Oaks, California 91320-1799
Attention: Corporate Secretary
Fax: (805) 449-4531
or
if to the Company, at
Genome Therapeutics Corp.
100 Beaver Street
Waltham, Massachusetts 02453
Attention: President
Fax: *****
or in any case at such other address as Purchaser or the Company shall have
furnished to the other in writing.
9.7 Severability of this Agreement. If any provision of this
Agreement shall be judicially determined to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
9.8 Delays or Omissions. No delay or omission to exercise
any right, power or remedy accruing to Company or to the Purchaser, upon any
breach or default of any party hereto under this Agreement, shall impair any
such right, power or remedy of Company or the Purchaser nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of any similar breach of default thereafter occurring; nor shall any
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of
Company or the Purchaser of any breach of default under this Agreement or any
waiver on the part of Company or the Purchaser of any provisions or conditions
of this Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, or by law or otherwise afforded to Company or the Purchaser shall be
cumulative and not alternative.
9.9 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference and shall not,
by themselves, determine the construction of this Agreement.
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CONFIDENTIAL TREATMENT REQUEST
9.10 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
9.11 Remedies. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, each of
the Purchaser and the Company will be entitled to 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 obligations
described in the foregoing sentence and hereby agrees to waive in any action for
specific performance of any such obligation the defense that a remedy at law
would be adequate.
9.12 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 successful party shall be entitled to recover
reasonable attorneys' fees in addition to its costs and expenses and any other
available remedy.
[signature page follows]
27
IN WITNESS WHEREOF, the parties hereto have caused their
respective duly authorized representatives to execute this Agreement as of the
date and year first above written.
GENOME THERAPEUTICS CORP.
By:
-------------------------------------
Steven M. Rauscher
President and Chief Executive Officer
AMGEN INC.
By:
-------------------------------------
Kevin W. Sharer
Chairman of the Board, Chief Executive Officer
and President
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