Exhibit 10.3
CANCERVAX CORPORATION
THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
DECEMBER 15, 2004
THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
THIS THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (this
"AGREEMENT") is made as of this 15th day of December, 2004 (the "EFFECTIVE
DATE"), by and among CancerVax Corporation, a Delaware corporation (the
"COMPANY") and the investors listed on Schedule A hereto (each, an "INVESTOR"
and collectively, the "INVESTORS").
This Agreement supercedes and replaces that certain Second Amended and
Restated Investors' Rights Agreement, dated August 13, 2003, by and among the
Company and the other parties named therein (the "PRIOR AGREEMENT").
RECITALS
A. The Company and Serono B.V., a Netherlands corporation
("SERONO"), are parties to that certain Stock Purchase Agreement of even date
herewith (the "PURCHASE AGREEMENT").
B. In order to induce the Company to sell its stock pursuant to
the Purchase Agreement, and in order to induce Serono to invest funds in the
Company pursuant to the Purchase Agreement, the Investors and the Company desire
to memorialize the rights of the Investors to cause the Company to register
shares of the Company's Common Stock ("COMMON STOCK") held by the Investors, as
well as certain other matters as set forth herein.
C. The Prior Agreement provides that an amendment or modification
to the Agreement may be effected only with the written consent of the Company
and the holders of at least sixty percent (60%) in interest of the Registrable
Securities (as defined under the Prior Agreement).
D. The undersigned Investors constitute holders of at least sixty
percent (60%) of the Registrable Securities (as defined under the Prior
Agreement) and, therefore, are entitled to bind all other holders of Registrable
Securities who are parties to the Prior Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises set
forth herein, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investors
hereby agree as follows:
1. Registration Rights. The Company and Investors covenant and agree as
follows:
1.1 Definitions. For purposes of this Agreement:
(a) The term "ACT" means the Securities Act of 1933, as
amended.
(b) The term "HOLDER" means any person or entity owning or
having the right to acquire Registrable Securities or any assignee thereof in
accordance with Section 1.12 hereof.
(c) The term "FORM S-3" means such form under the Act as
in effect on the date hereof or any registration form under the Act subsequently
adopted by the Securities and Exchange Commission ("SEC") which permits
inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
(d) The term "REGISTER," "REGISTERED" and "REGISTRATION"
refer to the act of preparing and filing a registration statement, or similar
document, in compliance with the Act and applicable rules and regulations
thereunder, and the declaration or ordering of effectiveness of such
registration statement or document.
(e) The term "REGISTRABLE SECURITIES" means (i) the
shares of Common Stock set forth on Schedule A hereto and (ii) any Common Stock
issued as (or issuable upon the conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, the shares listed in clause (i),
excluding in all cases, however, any Registrable Securities sold by a person in
a transaction in which its, his or her rights under this Agreement are not
assigned. Notwithstanding the foregoing, Common Stock or other securities shall
only be treated as Registrable Securities if and so long as they have not been
(A) sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction, or (B) sold in a transaction
exempt from the registration and prospectus delivery requirements of the Act
under Section 4(1) thereof so that all transfer restrictions, and restrictive
legends with respect thereto, if any, are removed upon the consummation of such
sale.
(f) The number of shares of "REGISTRABLE SECURITIES THEN
OUTSTANDING" shall be determined by the number of shares of Common Stock
outstanding which are Registrable Securities.
1.2 Request for Registration.
(a) If the Company shall receive a written request from
the Holders of at least twenty-five percent (25%) of the Registrable Securities
then outstanding that the Company file a registration statement under the Act
covering the registration of at least twenty-five percent (25%) of the
Registrable Securities then outstanding (or a lesser percent if the anticipated
aggregate offering price, net of underwriting discounts and commissions, would
exceed $5,000,000), then the Company shall, within twenty (20) days of the
receipt thereof, give written notice of such request to all Holders and shall,
subject to the limitations of subsection 1.2(b) below, effect as soon as
practicable, and in any event shall use its reasonable best efforts to effect
within sixty (60) days of the receipt of such request, the registration under
the Act of all Registrable Securities which the Holders request to be registered
within twenty (20) days of the mailing of such notice by the Company in
accordance with Section 2.5 hereof.
(b) If the Holders initiating the registration request
hereunder ("INITIATING HOLDERS") intend to distribute the Registrable Securities
covered by the request by means of an
3
underwriting, they shall so advise the Company as a part of their request made
pursuant to this Section 1.2 and the Company shall include such information in
the written notice referred to in subsection 1.2(a) above. The underwriter will
be selected by the Company's Board of Directors (the "BOARD") and shall be
reasonably acceptable to a majority in interest of the Initiating Holders. In
such event, the right of any Holder to include its Registrable Securities in
such registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in subsection 1.5(e) hereof) enter into
an underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding any other provision of this
Section 1.2, if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated to the Registrable Securities in proportion (as
nearly as practicable) to the amount of such Registrable Securities then
outstanding owned by each Holder, including the Initiating Holders; provided,
however, that the number of shares of Registrable Securities to be included in
such underwriting shall not be reduced unless all other securities are first
entirely excluded from the underwriting and registration. Any Registrable
Securities excluded and withdrawn from such underwriting shall be withdrawn from
the registration.
(c) Notwithstanding the foregoing, if the Company shall
furnish to Holders requesting a registration statement pursuant to this Section
1.2, a certificate signed by the President of the Company stating that in the
good faith judgment of the Board, it would be seriously detrimental to the
Company and its stockholders for such registration statement to be filed and it
is therefore essential to defer the filing of such registration statement, the
Company shall have the right to defer taking action with respect to such filing
for a period of not more than ninety (90) days after receipt of the request of
the Initiating Holders; provided, however, that the Company may not utilize this
right more than twice in any twelve (12) month period.
(d) In addition, the Company shall not be obligated to
effect, or to take any action to effect, any registration pursuant to this
Section 1.2:
(i) after the Company has effected two (2)
registrations pursuant to this Section 1.2 and such registrations have been
declared or ordered effective; or
(ii) during the period starting with the date
sixty (60) days prior to the Company's good faith estimate of the date of filing
of, and ending on a date one hundred eighty (180) days after the effective date
of, a registration subject to Section 1.3 hereof; provided, however, that the
Company is actively employing in good faith all reasonable efforts to cause such
registration statement to become effective.
1.3 Company Registration. If (but without any obligation to do so)
the Company proposes to register (including for this purpose a registration
effected by the Company for
4
stockholders other than the Holders) any of its stock or other securities under
the Act in connection with the public offering of such securities solely for
cash (other than a registration under Section 1.2 or 1.4 or relating solely to
the sale of securities to participants in a Company employee benefit plan or
corporate reorganization or other transaction covered by Rule 145 promulgated
under the Act, or a registration on any form which does not permit secondary
sales or include substantially the same information as would be required to be
included in a registration statement covering the sale of the Registrable
Securities), the Company shall, at such time, promptly give each Holder written
notice of such registration. Upon the written request of each Holder given
within twenty (20) days after mailing of such notice by the Company in
accordance with Section 2.5 hereof, the Company shall, subject to the provisions
of Section 1.8 hereof, cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be registered. If
a Holder decides not to include all of its, his or her Registrable Securities in
any registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.
1.4 Form S-3 Registration. In case the Company shall receive from
any Holder or Holders a written request or requests that the Company effect a
registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or
Holders, the Company will:
(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders;
and
(b) as soon as practicable, effect such registration and
all such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written request
given within fifteen (15) days after receipt of such written notice from the
Company; provided, however, that the Company shall not be obligated to effect
any such registration, qualification or compliance, pursuant to this Section
1.4: (i) subject to Section 1.11 hereof, if Form S-3 is not available for such
offering by the Holders; (ii) if the Holders, together with the holders of any
other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at an
aggregate price to the public (net of any underwriters' discounts or
commissions) of less than $1,000,000; (iii) if the Company shall furnish to the
Holders a certificate signed by the President of the Company stating that in the
good faith judgment of the Board, it would be seriously detrimental to the
Company and its stockholders for such Form S-3 Registration to be effected at
such time, in which event the Company shall have the right to defer the filing
of the Form S-3 registration statement for a period of not more than ninety (90)
days after receipt of the request of the Holder under this Section 1.4;
provided, however, that the Company shall not utilize this right more than once
in any twelve (12) month period; or (iv) in any particular jurisdiction in which
the Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or
compliance.
5
(c) Subject to the foregoing, the Company shall file a
re-sale registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt of
the request or requests of the Holders. Registrations effected pursuant to this
Section 1.4 shall not be for underwritten offerings nor shall they be counted as
demands for registration or registrations effected pursuant to Section 1.2.
1.5 Obligations of the Company. Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its reasonable
best efforts to cause such registration statement to become effective, and, keep
such registration statement effective for up to one (1) year, or such shorter
period of time that is agreed to by the Holders of a majority of the Registrable
Securities being registered thereunder.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(c) Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them
that are included in such registration.
(d) Use its reasonable best efforts to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such states as shall be reasonably requested by
the Holders; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states.
(e) In the event of any underwritten public offering
under Sections 1.2 or 1.3, enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the managing
underwriter of such offering. Each Holder participating in such underwriting
shall also enter into and perform its obligations under such agreement.
(f) Promptly notify each Holder of Registrable Securities
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Act of the happening of any event
the result of which causes the prospectus included in such registration
statement, as then in effect, to include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing. The Company will use reasonable efforts to amend or supplement such
prospectus in order to cause such prospectus not to include any untrue statement
of a material fact or omit to state a material fact required to be
6
stated therein or necessary to make the statements therein not misleading in
light of circumstances then existing.
(g) Cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration.
(i) Use its reasonable best efforts to furnish, at the
request of any Holder requesting registration of Registrable Securities pursuant
to this Section 1, on the date that such Registrable Securities are delivered to
the underwriters for sale in connection with a registration statement pursuant
to this Section 1, if such securities are being sold through underwriters, or,
if such securities are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes effective, (i) an
opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of the Registrable
Securities, and (ii) a letter dated such date, from the independent certified
public accountants of the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities.
(j) Notify each seller of Registrable Securities under
such registration statement of (i) the effectiveness of such registration
statement, (ii) the filing of any post-effective amendments to such registration
statement, or (iii) the filing of a supplement to such registration statement.
1.6 Furnish Information.
(a) It shall be a condition precedent to the obligations
of the Company to take any action pursuant to this Section 1 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company such information regarding itself, the Registrable Securities held
by it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Holder's Registrable Securities.
(b) The Company shall have no obligation with respect to
any registration requested pursuant to Sections 1.2 or 1.4 hereof if, as a
result of the application of subsection 1.6(a), the number of shares or the
anticipated aggregate offering price of the Registrable Securities to be
included in the registration does not equal or exceed the number of shares or
the anticipated aggregate offering price required to originally trigger the
Company's obligation to initiate such registration as specified in Sections 1.2
or 1.4 hereof, whichever is applicable.
7
1.7 Expenses of Registration. All expenses (other than
underwriting discounts and commissions) incurred in connection with any
registrations, filings or qualifications of Registrable Securities pursuant to
Sections 1.2, 1.3 or 1.4, including (without limitation) all registration,
filing and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company, and the reasonable fees and
disbursements of a single special counsel for the selling Holders shall be borne
by the Company. Notwithstanding the foregoing, the Company shall not be required
to pay for any expenses of any registration proceeding begun pursuant to Section
1.2 if the registration request is subsequently withdrawn at the request of the
Holders of a majority of the Registrable Securities to be registered, unless (a)
the Holders of a majority of the Registrable Securities then outstanding agree
to forfeit their right to one (1) demand registration pursuant to Section 1.2
(in which case such right shall be forfeited by all Holders of Registrable
Securities) or (b) such withdrawal is principally due to adverse change to the
Company's business condition.
1.8 Underwriting Requirements. In connection with any offering
involving an underwriting of shares of the Company's capital stock under Section
1.3 hereof, the Company shall not be required to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by stockholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the selling stockholders according to
the total amount of securities entitled to be included therein owned by each
selling stockholder, or in such other proportions as shall mutually be agreed to
by such selling stockholders); provided, however, that in no event shall the
amount of securities of the selling Holders included in the offering be reduced
below thirty percent (30%) of the total amount of securities included in such
offering. For purposes of the preceding parenthetical concerning apportionment,
for any selling stockholder which is a holder of Registrable Securities and
which is a limited liability company, partnership or corporation, the
affiliates, members, partners, retired partners and stockholders of such holder,
or the estates and family members of any such members, partners and retired
partners and any trusts for the benefit of any of the foregoing persons shall be
deemed to be a single "selling stockholder," and any pro-rata reduction with
respect to such "selling stockholder" shall be based upon the aggregate amount
of shares carrying registration rights owned by all entities and individuals
included in such "selling stockholder," as defined in this sentence.
1.9 Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
8
1.10 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners, officers, and directors
of each Holder, any underwriter (as defined in the Act) for such Holder and each
person, if any, who controls such Holder or underwriter within the meaning of
the Act or the Securities Exchange Act of 1934, as amended (the "1934 ACT"),
against any losses, claims, damages or liabilities (joint or several) to which
they may become subject under the Act, the 1934 Act or any state securities law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "VIOLATION"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Act, the 1934 Act, or any rule or
regulation promulgated under the Act or the 1934 Act or any state securities law
in connection with the offering covered by such Registration Statement; and the
Company will pay to each such Holder, partner, officer, director, underwriter or
controlling person, as incurred, any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity agreement
contained in this subsection 1.10(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld or delayed), nor shall the Company be liable to any
Holder, underwriter or controlling person for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such Holder, partner, officer, director, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder
will, if Registrable Securities held by such Holder are included in the
applicable registration statement, indemnify and hold harmless the Company, each
of its directors, each of its officers who has signed the registration
statement, each person, if any, who controls the Company within the meaning of
the Act, any underwriter, any other Holder selling securities in such
registration statement and any controlling person of any such underwriter or
other Holder, against any losses, claims, damages or liabilities (joint or
several) to which any of the foregoing persons may become subject under the Act
or the 1934 Act or any state securities law in connection with the offering
covered by such registration statement insofar as such losses, claims, damages
or liabilities (or actions in respect thereto) arise out of or are based upon
any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with such registration;
and each such Holder will pay any legal or other expenses reasonably incurred by
any person intended to be indemnified pursuant to this subsection 1.10(b), in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this subsection 1.10(b) shall not apply to amounts paid in
9
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder (which consent shall
not be unreasonably withheld or delayed); provided further, that in no event
shall any indemnity under this subsection 1.10(b) exceed the net proceeds from
the offering received by such Holder, except in the case of willful fraud by
such Holder.
(c) Promptly after receipt by an indemnified party under
this Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.10, deliver to
the indemnifying party a written notice of the commencement thereof. The
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the reasonable fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.10, but the omission to so deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.10.
(d) The foregoing indemnity agreements of the Company and
Holders are subject to the condition that, insofar as they related to any
Violation made in a preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the SEC at the time the registration statement
in question becomes effective or the amended prospectus filed with the SEC
pursuant to SEC Rule 424(b) (the "FINAL PROSPECTUS"), such indemnity agreement
shall not inure to the benefit of any person if a copy of the Final Prospectus
was furnished to the indemnified party and was not furnished to the person
asserting the loss, liability, claim or damage at or prior to the time such
action is required by the Act. If the indemnification provided for in this
Section 1.10 is held by a court of competent jurisdiction to be unavailable to
an indemnified party with respect to any loss, claim, damage or liability
referred to herein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss, claim,
damage or liability, as well as any other relevant equitable considerations;
provided, however, that in no event shall (i) any contribution by a Holder under
this subsection 1.10(d) exceed the net proceeds from the offering received by
such Holder, except in the case of willful fraud by such Holder, and (ii) any
person or entity guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) be entitled to contribution from any person or entity
who was not guilty of such fraudulent misrepresentation. The relative fault of
the indemnifying party and of the indemnified party shall be determined by
10
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(f) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(g) The obligations of the Company and Holders under this
Section 1.10 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
1.11 Reports Under Securities Exchange Act of 1934. With a view to
making available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in SEC Rule 144, so long as the Company remains
subject to the periodic reporting requirements under Sections 13 and 15(d) of
the 1934 Act;
(b) take such action as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities;
provided, however, that any default by the Company (i) on any installment(s) on
indebtedness for borrowed money, or (ii) on any rental for one or more long-term
leases, which default renders Form S-3 unavailable to the Company, shall not
give rise to any claim against the Company by the Holders so long as (x) such
default arises in connection with a good faith dispute with the relevant lender
or lessor, or (y) the Company has used its reasonable best efforts to avoid such
default;
(c) file with the SEC in a timely manner all reports and
other documents required of the Company under the Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at
any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may reasonably be requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration (at any time after the
Company has become subject to the reporting requirements of the 1934 Act) or
pursuant to such form.
11
1.12 Assignment of Registration Rights. The right to cause the
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee (or affiliated group of transferees or assignees) who, after such
assignment or transfer, holds at least 250,000 shares of Registrable Securities
(subject to appropriate adjustment for stock splits, stock dividends,
combinations and other recapitalizations); provided, however, that,
notwithstanding the foregoing, the right to cause the Company to register
Registrable Securities pursuant to this Section 1 may be assigned (but only with
all related obligations) to (i) any partner or retired partner of any Holder
which is a partnership, (ii) any family member or trust for the benefit of any
individual Holder or family member, (iii) any affiliated investment fund, (iv)
any member of any Holder which is a limited liability company, or (v) any
stockholder or affiliate of any Holder that is a corporation; provided, further,
that the Company is, within a reasonable time after such transfer, furnished
with written notice of the name and address of such transferee or assignee and
the securities with respect to which such registration rights are being
assigned; provided, further, that such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Act; provided, further,
that CancerVax Research Foundation may transfer its Registrable Securities and
assign the right to cause the Company to register such Registrable Securities to
any tax-exempt, public charitable organization in order to comply with the
minimum distribution requirements for private foundations under 26 U.S.C.
Section 4942. For the purposes of determining the number of shares of
Registrable Securities held by a transferee or assignee, the holdings of
transferees and assignees of a partnership who are partners or retired partners
of such partnership, a limited liability company who are members of such limited
liability company, a corporation who are stockholders and affiliates of such
corporation (including, in each case, spouses and ancestors, lineal descendants
and siblings of such partners, members, affiliates and stockholders or spouses
who acquire Registrable Securities by gift, will or intestate succession) shall
be aggregated together and with the partnership, limited liability company or
corporation, as applicable; provided, that all assignees and transferees who
would not qualify individually for assignment of registration rights shall have
a single attorney-in-fact for the purpose of exercising any rights, receiving
any notices or taking any action under this Section 1.
1.13 Limitations on Subsequent Registration Rights. From and after
the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of a majority of the outstanding Registrable Securities,
enter into any agreement with any holder or prospective holder of any securities
of the Company which would allow such holder or prospective holder (a) to
include such securities in any registration filed under Section 1.2 hereof,
unless under the terms of such agreement, such holder or prospective holder may
include such securities in any such registration only to the extent that the
inclusion of its securities will not reduce the amount of the Registrable
Securities of the Holders which is included, or (b) to make a demand
registration which could result in such registration statement being declared
effective within one hundred eighty (180) days of the effective date of any
registration effected pursuant to Section 1.2 hereof.
1.14 Serono. Serono agrees that it shall be permitted to dispose of
the Purchased Stock (as such term is defined in the Purchase Agreement) only as
set forth in Section 5.2 of the Purchase Agreement. Notwithstanding anything
contained herein to the contrary, the Purchased
12
Stock shall not constitute "Registrable Securities" and Serono shall not be a
"Holder" until the earlier of (a) the expiration of the Lock-up Period (as such
term is defined in the Purchase Agreement) and (b) April 15, 2006.
1.15 Termination of Registration Rights. No Holder shall be
entitled to exercise any right provided for in this Section 1 after the earlier
of (a) October 29, 2008, (b) such time as such Holder may sell all of its shares
during a ninety (90) day period as contemplated by Rule 144(e)(1)(i) under the
Act, without registration (provided, however, that this Section 1.15(b) shall
not apply to Serono), or (c) immediately prior to a Change in Control (as such
term is defined in the Purchase Agreement) of the Company.
2. Miscellaneous.
2.1 Survival. The covenants of the Company and Investors contained
in or made pursuant to this Agreement shall survive the execution and delivery
of this Agreement and shall in no way be affected by any investigation of the
subject matter thereof made by or on behalf of the Investors or the Company.
2.2. Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any Registrable Securities). Nothing in this Agreement, express
or implied, is intended to confer upon any party, other than the parties hereto
or their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
2.3. Governing Law. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
2.4. Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
2.5. Notices. All notices required or permitted hereunder shall be
in writing and shall be deemed effectively given: (i) upon personal delivery to
the party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during the normal business hours of the recipient (if not sent during the normal
business hours of the recipient, then on the next business day); (iii) five days
after having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (iv) one day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the address as set
forth on the signature page hereof or at such other address as such party may
designate by advance written notice to the other parties hereto.
2.6. Expenses. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
13
2.7. Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
at least a majority in interest of the Registrable Securities; provided,
however, that Sections 1.4 and 1.14 of this Agreement may not be amended or
waived without the written consent of Serono; provided, further, that if any
amendment or waiver of this Agreement adversely affects the Registrable
Securities held (or to be held) by Serono or the rights of Serono hereunder in a
manner that is different than the manner it effects the Registrable Securities
held by other Holders or the other Holders, then such amendment or waiver shall
require the consent of Serono, which consent may be given or withheld in its
sole discretion. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon all the Investors, each transferee of the
Registrable Securities and the Company.
2.8. Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
2.9. Aggregation of Stock. All Registrable Securities held or
acquired by affiliated entities or persons (including former and current
partners, members and stockholders) shall be aggregated together for the purpose
of determining the availability of any rights under this Agreement.
2.10. Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and no
party shall be liable or bound to any other party in any manner by any covenants
except as specifically set forth herein.
2.11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
2.12. Facsimile Signatures. This Agreement may be executed and
delivered by facsimile and upon such delivery the facsimile signature will be
deemed to have the same effect as if the original signature had been delivered
to the other party.
2.13. Definitions. For purposes of this Agreement, the term
"affiliate" shall have the meaning ascribed to it in Rule 501 under the Act.
[Remainder of page intentionally left blank]
14
The parties hereto have executed this Agreement as of the date first
written above.
COMPANY: CANCERVAX CORPORATION
By:/s/ David F. Hale
------------------------------------
David F. Hale, Chief Executive Officer
Address: 2110 Rutherford Road
Carlsbad, CA 92008
[COUNTERPART SIGNATURE PAGE TO THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
The parties hereto have executed this Agreement as of the date first
written above.
INVESTORS: SERONO B.V.
By: /s/ Leon Bushara
-------------------------------------
Name: Leon Bushara
Title: Authorized Representative
Address: Serono B.V.
c/o Serono International SA
15 bis, Chemin des Mines
Case Postale 54
CH-1211, Geneve 20
Switzerland
Attn: General Counsel
Facsimile No.: 41-22-739-3070
[COUNTERPART SIGNATURE PAGE TO THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
The parties hereto have executed this Agreement as of the date first
written above.
INVESTORS: FORWARD VENTURES IV, L.P.
By: Forward IV Associates, LLC,
General Partner
By: /s/ Ivor Royston
---------------------------------
Ivor Royston, Managing Member
Address: Attention: Ivor Royston, M.D.
9393 Towne Center Drive
Suite 200
San Diego, CA 92121
FORWARD VENTURES IV B, L.P.
By: Forward IV Associates, LLC,
General Partner
By: /s/ Ivor Royston
---------------------------------
Ivor Royston, Managing Member
Address: Attention: Ivor Royston, M.D.
9393 Towne Center Drive
Suite 200
San Diego, CA 92121
[COUNTERPART SIGNATURE PAGE TO THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
The parties hereto have executed this Agreement as of the date first
written above.
INVESTORS: VECTOR LATER-STAGE EQUITY FUND II, L.P.
By: Vector Fund Management II, LLC,
General Partner
By: /s/ Barclay A. Phillips
-------------------------------------
Barclay A. Phillips, Managing Director
Address: Attention: Barclay A. Phillips
1751 Lake Cook Blvd.
Suite 350
Deerfield, IL 60015
VECTOR LATER-STAGE EQUITY FUND II (QP), L.P.
By: Vector Fund Management II, LLC,
General Partner
By: /s/ Barclay A. Phillips
-------------------------------------
Barclay A. Phillips, Managing Director
Address: Attention: Barclay A. Phillips
1751 Lake Cook Blvd.
Suite 350
Deerfield, IL 60015
[COUNTERPART SIGNATURE PAGE TO THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
The parties hereto have executed this Agreement as of the date first
written above.
INVESTORS: SPECIAL PRIVATE EQUITY PARTNERS, L.P.
By: The PMG Special PEP Investors,
L.L.C., its General Partner
By: /s/ Sharon Murphy
---------------------------------
Sharon Murphy
Member
By: /s/ John O'Malley
---------------------------------
John O'Malley
Member
Address: c/o WestLB Asset Management (USA), L.L.C.
10 South Wacker Drive, Suite 2960
Chicago, IL 60606
THE PMG-NG DIRECT INVESTMENT FUND, L.P.
By: The PMG-NG Equity Investors, L.L.C.,
its General Partner
By: /s/ Sharon Murphy
---------------------------------
Sharon Murphy
Member
By: /s/ John O'Malley
---------------------------------
John O'Malley
Member
Address: c/o WestLB Asset Management (USA), L.L.C.
10 South Wacker Drive, Suite 2960
Chicago, IL 60606
[COUNTERPART SIGNATURE PAGE TO THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
The parties hereto have executed this Agreement as of the date first
written above.
INVESTORS: J.P. MORGAN DIRECT VENTURE CAPITAL
INSTITUTIONAL INVESTORS II LLC
By: J.P. Morgan Investment Management,
Inc. as Investment Advisor
By: /s/ Robert E. Kiss
---------------------------------
Portfolio Manager
Address: 522 Fifth Avenue
New York, NY 10036
J.P. MORGAN DIRECT VENTURE CAPITAL PRIVATE
INVESTORS II LLC
By: J.P. Morgan Investment Management,
Inc. as Investment Advisor
By: /s/ Robert E. Kiss
---------------------------------
Portfolio Manager
Address: 522 Fifth Avenue
New York, NY 10036
522 FIFTH AVENUE FUND
By: J.P. Morgan Investment Management,
Inc. as Investment Advisor
By: /s/ Robert E. Kiss
---------------------------------
Portfolio Manager
Address: 522 Fifth Avenue
New York, NY 10036
[COUNTERPART SIGNATURE PAGE TO THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
The parties hereto have executed this Agreement as of the date first
written above.
INVESTORS: ATHENIAN VENTURE PARTNERS II L.P.
By: Athenian II, Ltd., General Partner
By:__________________________________
Karl O. Elderkin, President
Address: Attention: Karl Elderkin
20 East Circle Drive, #37146
Athens, OH 45701
ATHENIAN VENTURE PARTNERS I L.P.
By: Athenian I, Ltd., General Partner
By: _________________________________
Karl O. Elderkin, President
Address: Attention: Karl Elderkin
20 East Circle Drive, #37146
Athens, OH 45701
AVP TECHNOLOGY II L.P.
By: AVP II, Ltd., General Partner
By: _________________________________
Karl O. Elderkin, President
Address: Attention: Karl Elderkin
20 East Circle Drive, #37146
Athens, OH 45701
[COUNTERPART SIGNATURE PAGE TO THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
The parties hereto have executed this Agreement as of the date first
written above.
INVESTORS: INTERNATIONAL BIOTECHNOLOGY TRUST PLC
By: _____________________________________
Its: ____________________________________
Address: 31 Gresham Street
London
EC3V
70A
United Kingdom
A.B. SIEMER
By: _____________________________________
A.B. Siemer
Address: Attention: Roger D. Bailey
150 East Campus View Blvd.
Suite 250
Columbus, OH 43235
[COUNTERPART SIGNATURE PAGE TO THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
The parties hereto have executed this Agreement as of the date first
written above.
INVESTORS: GMG CAPITAL PARTNERS III, L.P.
By: GMG Capital Investments, LLC, General
Partner
By: _____________________________________
Joachim Gfoeller, Jr., Managing Member
Address: c/o GMG Capital Partners
399 Park Avenue
36th Floor
New York, NY 10022
GMG CAPITAL PARTNERS III (COMPANION
FUND), L.P.
By: GMG Capital Investments, LLC,
General Partner
By: _____________________________________
Joachim Gfoeller, Jr., Managing Member
Address: c/o GMG Capital Partners
399 Park Avenue
36th Floor
New York, NY 10022
GMG ASSOCIATES I, LLC
By: _____________________________________
Joachim Gfoeller, Jr., President
Address: 399 Park Avenue
36th Floor
New York, NY 10022
[COUNTERPART SIGNATURE PAGE TO THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
The parties hereto have executed this Agreement as of the date first
written above.
INVESTORS: RHL MEDICAL I, LLC
By: _____________________________________
Its: ____________________________________
Address: The RHL Group
P.O. Box 17034
Beverly Hills, CA 90210
Attention: Robert Lorsch
COLLETTE SUE CARSON
By: _____________________________________
Collette Sue Carson
Address: 7514 Girard Ave., #1 - PMB243
La Jolla, CA 92037
[COUNTERPART SIGNATURE PAGE TO THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
The parties hereto have executed this Agreement as of the date first
written above.
INVESTORS: CDIB BIOSCIENCE VENTURES I, INC.
By: _____________________________________
Its: ____________________________________
Address: c/o CDIB BioScience Venture Management
30th Floor, 99 Tun Hwa South Rd.
Section 2
Taipei, Taiwan
Attention: Claire Tsai
CDIB BIOVENTURES INC.
By: _____________________________________
Its: ____________________________________
Address: Attention: Chao-Lun Pai, Ph.D.
125 Nanking East Road
Section 5, 5th Floor, CDB Tower
Taipei R.O.C.
Taiwan
[COUNTERPART SIGNATURE PAGE TO THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
The parties hereto have executed this Agreement as of the date first
written above.
INVESTORS: DAVID F. HALE AND LINDA C. HALE, AS
TRUSTEES, UDT DATED FEBRUARY 10, 1986
By: /s/ David F. Hale
-------------------------------------
David F. Hale, Trustee
Address: 17079 Circa del Sur
Rancho Santa Fe, CA 92067
THE DONALD L. MORTON FAMILY TRUST CREATED
UNDER TRUST DATED JUNE 2, 1989
By: /s/ Donald L. Morton, M.D.
-------------------------------------
Donald L. Morton, M.D., Trustee
Address: 1374 Bella Oceana Vista
Pacific Palisades, CA 90272
[COUNTERPART SIGNATURE PAGE TO THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
The parties hereto have executed this Agreement as of the date first
written above.
INVESTORS: ONCOVAC, INC.
By: /s/ Donald L. Morton, M.D.
-------------------------------------
Donald L. Morton, M.D., President,
Secretary and Chief Financial Officer
Address: P.O. Box 970
Pacific Palisades, CA 90272
ROPAR LLC
By: _____________________________________
Harvey Rosen
Address: 1640 S. Sepulveda Blvd.
Suite 308
Los Angeles, CA 90025
[COUNTERPART SIGNATURE PAGE TO THIRD AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT]
SCHEDULE A
SCHEDULE OF INVESTORS
NUMBER OF
SHARES OF
COMMON STOCK
------------
Serono B.V.......................................................................... 1,000,000
Forward Ventures IV, L.P............................................................ 1,362,530
Forward Ventures IV B, L.P.......................................................... 115,508
Vector Later-Stage Equity Fund II, L.P.............................................. 250,580
Vector Later-Stage Equity Fund II (QP), L.P......................................... 751,742
Special Private Equity Partners, L.P................................................ 536,059
The PMG-NG Direct Investment Fund, L.P. ............................................ 545,824
J.P. Morgan Direct Venture Capital Institutional Investors II LLC................... 823,389
J.P. Morgan Direct Venture Capital Private Investors II LLC......................... 235,428
522 Fifth Avenue Fund .............................................................. 32,575
Athenian Venture Partners II L.P.................................................... 163,925
Athenian Venture Partners I L.P. ................................................... 596,028
AVP Technology II L.P............................................................... 226,142
International Biotechnology Trust PLC............................................... 386,502
A. B. Siemer........................................................................ 180,913
GMG Capital Partners III, L.P....................................................... 421,446
GMG Capital Partners III (Companion Fund), L.P...................................... 22,182
GMG Associates I, LLC............................................................... 40,784
RHL Medical I, LLC.................................................................. 150,158
CDIB BioScience Ventures I, Inc. ................................................... 257,667
David F. Hale and Linda C. Hale, as Trustees, UDT dated February 10, 1986........... 49,410
The Donald L. Morton Family Trust Created Under Trust Dated June 2, 1989............ 519,820
OncoVac, Inc. ...................................................................... 98,814
CDIB Bioventures Inc................................................................ 113,071
Ropar LLC........................................................................... 96,372
Collette Sue Carson................................................................. 12,553
TOTAL 8,989,422
SCHEDULE A