Exhibit 10.25
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REGISTRATION RIGHTS AGREEMENT
By and Between
NOVARTIS PHARMA AG
AND
REGENERON PHARMACEUTICALS, INC.
Dated as of March 28, 2003
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement"), dated as of
March 28, 2003, by and between NOVARTIS PHARMA AG (the "Investor"), a
corporation organized under the laws of Switzerland, with its principal place of
business at Lichtstrasse 35, 4056 Basel, Switzerland, and REGENERON
PHARMACEUTICALS, INC. (the "Company"), a corporation organized under the laws of
New York with its principal place of business at 777 Old Saw Mill Road,
Tarrytown, New York, U.S.A.
RECITALS
WHEREAS, the Company and the Investor are parties to a Stock
Purchase Agreement dated as of the date hereof (the "Stock Purchase Agreement"),
pursuant to which the Investor purchased shares of the Company's common stock
(the "Purchased Stock").
In consideration of the premises and mutual covenants
contained in this Agreement, the parties hereto hereby agree as follows:
ARTICLE I.
REGISTRATION RIGHTS
Section 1.1 Definitions.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under common
control with, such Person; provided that, for the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Business Day" shall mean any day other than a Saturday or
Sunday or a day on which banks located in New York, New York or Basel,
Switzerland are authorized or required by law to close.
"Common Stock" shall mean the common stock of the Company, par
value $0.001 per share.
"Form S-3" shall mean such form under the Securities Act as in
effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"Governmental Authority" shall mean any nation or government,
any federal, state, municipal, local, provincial, regional or other political
subdivision thereof and any Person
exercising executive, legislative, judicial regulatory or administrative
functions of or pertaining to government.
"Holder" shall mean any Person owning Registrable Securities
who is a party to this Agreement or an assignee thereof in accordance with
Section 1.11.
"Person" shall mean and include an individual, a partnership,
a joint venture, a corporation, a limited liability company, a limited liability
partnership, a trust, an incorporated organization and a Governmental Authority.
"Piggy-Back Rights" shall mean the ability of any Person to
request or require the inclusion of securities in a registration statement that
has been filed, or is proposed to be filed, by the Company for the account of
the Investor pursuant to Section 1.4.
"register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document.
"Registrable Securities" shall mean (i) the Purchased Stock
and any shares of Common Stock issued in respect thereof as a result of any
stock split, stock dividend, share exchange, merger, consolidation or similar
recapitalization, and (ii) any Common Stock issued as (or issuable upon the
exercise of any warrant, right or other security that is issued as) a dividend
or other distribution with respect to, or in exchange or in replacement of, the
Purchased Stock, excluding in all cases, however, (x) any Registrable Securities
after they have been sold in a transaction in connection with which registration
rights granted hereunder are not assigned, or (y) any Registrable Securities
sold to or through a broker or dealer or underwriter in a public distribution or
a public securities transaction, or (z) Registrable Securities eligible for
resale pursuant to Rule 144(k) under the Securities Act as provided by, and
subject to the other terms of, Section 1.12.
"Registration Expenses" shall mean all expenses incurred by
the Company in complying with Sections 1.4 and 1.6 hereof, including, without
limitation, all registration and filing fees, fees and expenses of compliance
with securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications of any Registrable
Securities), expenses of printing certificates for any Registrable Securities in
a form eligible for deposit with the Depository Trust Company, messenger and
delivery expenses, internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), and fees and disbursements of counsel for the Company and
its independent certified public accountants (including the expenses of any
management review, cold comfort letters or any special audits required by or
incident to such performance and compliance), Securities Act liability insurance
(if the Company elects to obtain such insurance), the reasonable fees and
expenses of any special experts retained by the Company in connection with such
registration, fees and expenses of other Persons retained by the Company, and,
in the case of each of the second (2nd) and fourth (4th) Demand Requests, the
reasonable fees and expenses of one (1) counsel for the Holders of Registrable
Securities to be
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included in the relevant registration, selected by the Holders of a majority of
the Registrable Securities to be included in such registration.
"Securities Act" shall mean the Security Act of 1933, as
amended from time to time, or any successor statute thereto.
"Securities Exchange Act" shall mean the Security Exchange Act
of 1934, as amended from time to time, or any successor thereto.
"Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities pursuant to
this Agreement.
"SEC" shall mean the U.S. Securities and Exchange Commission.
"Shares of Then Outstanding Capital Stock" shall mean, at any
time, the issued and outstanding shares of the Common Stock and Class A Stock of
the Company at such time, as well as all capital stock issued and outstanding as
a result of any stock split, stock dividend, or reclassification of Common Stock
or Class A Stock distributable, on a pro rata basis, to all holders of Common
Stock or Class A Stock.
Section 1.2 Additional Defined Terms. In addition to the
terms defined in Section 1.1, the following terms shall have the respective
meanings assigned thereto in the sections indicated below:
Defined Term Section Defined Term Section
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Acquisition Proposal 2.1(c) Offered Registrable Securities 2.5
Agreement Preamble Permitted Transfer 2.4
Authorization Date 2.5 Required Registration 1.4(a)
Demand Request 1.4(a) Sale Notice 2.5
Initiating Holders 1.4(b) Severed Clause 3.10
Lock-Up Period 2.4 Third Party Piggy-Back Request 1.4(c)
Notice Period 2.5 Transfer 2.4
Offeror 2.1(c) Violation 1.9(a)
Section 1.3 Construction. In this Agreement, unless the
context otherwise requires:
(a) any reference in this Agreement to "writing" or
comparable expressions includes a reference to facsimile transmission or
comparable means of communication;
(b) words expressed in the singular number shall include
the plural and vice versa, words expressed in the masculine shall include the
feminine and neuter gender and vice versa;
(c) references to Articles, Sections and Schedules are
references to articles, sections and schedules of this Agreement;
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(d) reference to "day" or "days" are to calendar days;
(e) this "Agreement" or any other agreement or document
shall be construed as a reference to this Agreement or, as the case may be, such
other agreement or document as the same may have been, or may from time to time
be, amended, varied, novated or supplemented; and
(f) "include," "includes," and "including" are deemed to
be followed by "without limitation" whether or not they are in fact followed by
such words or words of similar import.
Section 1.4 Required Registration. If, at any time after the
second anniversary of the date of this Agreement, the Company receives from any
Holder or Holders a written request or requests (each, a "Demand Request") that
the Company effect a registration (a "Required Registration") under the
Securities Act and any related qualification or compliance with respect to
shares of Registrable Securities, the Company shall:
(i) promptly give written notice of the proposed
registration, and any related qualification or compliance, to any Holders which
did not make such Demand Request; and
(ii) as soon as practicable, effect all such
qualifications and compliance 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 by such
other Holder or Holders 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:
(1) if the Company has already completed four (4)
Required Registrations;
(2) if the market value of the Registrable Securities
proposed to be included in the registration, based on the average closing price
during the ten (10) consecutive trading days period prior to the making of the
Demand Request, is less than $10,000,000;
(3) if the Company shall furnish to the Holders a
certificate signed by the President and Chief Executive Officer of the Company
stating that (i) within sixty (60) days of receipt of the request of the Holder
or Holders under this Section 1.4 the Company shall file a registration
statement for the public offering of securities for the account of the Company
(other than a registration of securities (a) issuable pursuant to an employee
stock option, stock purchase or similar plan, (b) issuable pursuant to a merger,
exchange offer or a transaction of the type specified in Rule 145(a) under the
Securities Act, or (c) in which the only securities being registered are
securities issuable upon conversion of debt securities which are also being
registered), or (ii) the Company is engaged in a material transaction or has an
undisclosed material corporate development, in either case, which would be
required to be disclosed in the registration statement, and in the good faith
judgment of the Board of Directors of the Company, such disclosure would be
seriously detrimental to the Company and its shareholders at such time
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(in which case, the Company shall disclose the matter as promptly as reasonably
practicable and thereafter file the registration statement and each Holder
agrees not to disclose any information about such material transaction to third
parties until such disclosure has occurred or such information has entered the
public domain other than through breach of this provision by such Holder),
provided that the Company shall have the right to only defer the filing of the
registration statement pursuant to this subsection, such deferral to be for a
period of not more than ninety (90) days after receipt of a Demand Request and
provided further, that the Company may only defer the filing of a registration
pursuant to this subsection once in any one (1) year period; or
(4) if the Company has, within the six (6) month period
preceding the date of the Demand Request, already effected one (1) Required
Registration for the Holders pursuant to this Section 1.4.
(b) If the Holders initiating the registration request
hereunder (the "Initiating Holders") intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their Demand Request made pursuant to Section
1.4(a) and the Company shall include such information in the written notice
referred to in Section 1.4(a)(i). The underwriter shall be selected by a
majority in interest of the Initiating Holders and shall be acceptable to the
Company. 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 Section
1.6(h)) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting. Notwithstanding any
other provision of this Section 1.4, if the managing underwriter determines in
good faith that marketing factors require a limitation of the number of shares
to be underwritten, then the Company 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 among all Holders thereof, including the Initiating Holders,
in proportion (as nearly as practicable) to the amount of Registrable Securities
of the Company owned by each Holder; 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.
(c) Except as set forth on Schedule 1.4(c), the Company
represents and warrants to the Investor that as of the date of this Agreement,
in the event that any Person is entitled to request (a "Third Party Piggy-Back
Request") the inclusion of securities held by it in any Required Registration
requested pursuant to this Section 1.4, the terms of the agreement pursuant to
which the Company granted such Third Party Piggy-Back Request permit the Company
to exclude such securities from the Demand Registration in their entirety in
accordance with the provisions of Section 1.4(b) if the managing underwriter
determines in good faith that marketing factors require a limitation of the
number of shares to be underwritten.
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Section 1.5 Piggy-Back Registration. The Company
covenants and agrees that, following the date of this Agreement, it will not
grant any Person any Piggy-Back Rights.
Section 1.6 Obligations of the Company. Whenever
required under Section 1.4 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 sought to be included
therein; provided that, to the extent practicable, at least five (5) Business
Days prior to filing any registration statement or prospectus or any amendments
or supplements thereto, the Company shall furnish to the Holders of the
Registrable Securities covered by such registration statement and their counsel
copies of all such documents proposed to be filed and any such Holder shall have
the opportunity to comment on any information pertaining solely to such Holder
and its plan of distribution that is contained therein and the Company shall
make the corrections reasonably requested by such Holder with respect to such
information prior to filing any such registration statement or amendment;
(b) prepare and file with the SEC such amendments and
post-effective amendments to any registration statement and any prospectus used
in connection therewith as may be necessary to keep such registration statement
effective, and cause the prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under 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 for a period of not less than one-hundred twenty
(120) days or, if occurring earlier, the date on which the sale of all of the
Registrable Securities included in such registration statement shall be
completed;
(c) furnish to the Holders such numbers of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus),
in conformity with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate the disposition
of Registrable Securities owned by them;
(d) notify the Holders, promptly after the Company shall
receive notice thereof, of the time when a registration statement becomes
effective or when any amendment or supplement or any prospectus forming a part
of the registration statement has been filed;
(e) notify the Holders promptly of any request by the SEC
for the amending or supplementing of any registration statement or prospectus or
for additional information and promptly deliver to a Holder copies of any
comments received from the SEC to the extent such comments pertain to such
Holder;
(f) notify the Holders promptly of any stop order
suspending the effectiveness of any registration statement or prospectus or the
initiation of any proceedings for that purpose, and use its best efforts to
obtain the withdrawal of any such order or the termination of such proceedings;
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(g) use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
"blue sky" laws of such jurisdictions as shall be reasonably requested by the
Holders and use its best efforts to keep each such registration or qualification
effective, including through new filings, or amendments or renewals, during the
period such registration statement is required to be kept effective; and do any
and all other acts or things necessary or advisable to enable the disposition of
the Registrable Securities in all such jurisdictions reasonably requested to be
covered by such registration, provided 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 or
jurisdictions;
(h) in the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering;
(i) use its reasonable efforts to obtain: (A) at the time
of effectiveness of each registration statement, a "cold comfort letter" from
the Company's independent certified public accountants covering such matters of
the type customarily covered by "cold comfort letters" as the Holders of
Registrable Securities covered by such registration statement and the
underwriters reasonably request; and (B) at the time of any underwritten sale
pursuant to the registration statement, a "bring-down comfort letter," dated as
of the date of such sale, from the Company's independent certified public
accountants covering such matters of the type customarily covered by "bring-down
comfort letters" as the Holders of Registrable Securities covered by such
registration statement and the underwriters reasonably request;
(j) 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 Securities Act of the happening of
any event as a result of which the prospectus included in such registration
statement or any offering memorandum or other offering document includes an
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing, and prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such shares, such prospectus will not contain an untrue statement or material
fact or omit to state any fact necessary to make the statements therein not
misleading;
(k) permit any Holder, which Holder in its judgment might
be deemed to be an underwriter or a controlling Person of the Company, to
participate in the preparation of such registration statement and to require the
insertion therein of material, furnished to the Company in writing, which in the
reasonable judgment of such Holder and its counsel should be included; and
(l) use its reasonable efforts to obtain an opinion or
opinions addressed to the underwriter or underwriters of any underwritten
offering of Registrable Securities, if any, in customary form and scope from
counsel for the Company; and
(m) use its best efforts to cause all such Registrable
Securities to be listed on each exchange on which similar securities issued by
the Company are then listed.
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Section 1.7 Furnish Information. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Agreement 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 reasonably necessary to effect the registration of
such Holder's Registrable Securities.
Section 1.8 Expenses. Except as specifically provided
herein, all Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 1.4 or 1.6 hereof shall be borne
by the Company. All Selling Expenses incurred in connection with any
registration hereunder shall be borne by the Holders of Registrable Securities
covered by a registration statement pro rata on the basis of the number of
Registrable Securities registered on their behalf.
Section 1.9 Indemnification. In the event any
Registrable Securities are included in a registration statement under this
Agreement:
(a) The Company shall indemnify and hold harmless each
Holder including Registrable Securities in such registration statement, any
underwriter (as defined in the Securities Act) for such Holder and each Person,
if any, who controls such Holder or underwriter within the meaning of the
Securities Act or the Securities Exchange Act, against any and all losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under any securities laws including, without limitation, the Securities
Act, the Securities Exchange Act, or any other statute or common law of the
United States or any other country or political subdivision thereof, or
otherwise, including the amount paid in settlement of any litigation commenced
or threatened (including any amounts paid pursuant to or in settlement of claims
made under the indemnification or contribution provisions of any underwriting or
similar agreement entered into by such Holder in connection with any offering or
sale of securities covered by this Agreement), and shall promptly reimburse
them, as and when incurred, for any legal or other expenses incurred by them in
connection with investigating any claims and defending any actions, insofar as
any 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, or in any offering memorandum or other
offering document relating to the offering and sale of such securities, (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 Securities Act,
the Securities Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Securities Exchange Act or any state
Securities Law; or other applicable laws of any jurisdiction relating to any
actual or alleged action or inaction required of the Company in connection with
such offering; provided, however, the Company shall not be liable in any such
case 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 such Holder.
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(b) Each Holder including Registrable Securities in a
registration statement shall 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
Securities 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
liabilities (or actions in respect thereto) which 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 shall pay, as incurred, any legal or other expenses
reasonably incurred by any Person intended to be indemnified pursuant to this
Section 1.9(b), in connection with investigating or defending any such loss,
claim, damage, liablity, or action; provided, however, that the indemnity
agreement contained in this Section 1.9(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without consent of the Holder, which consent shall not be
unreasonably withheld; provided, that, in no event shall any indemnity under
this Section 1.9(b) exceed the net proceeds from the offering received by such
Holder.
(c) Promptly after receipt by an indemnified party under
this Section 1.9 of notice of the commencement of any action (including any
governmental action), such indemnified party shall, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.9,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly within any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the 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 1.9, but the omission so to deliver written
notice to the indemnifying party shall not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 1.9.
(d) In order to provide for just and equitable
contribution to joint liability in any case in which a claim for indemnification
is made pursuant to this Section 1.9 but it is judicially determined (by the
entry of a final judgment or decree by a court of competent jurisdiction and the
expiration or time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 1.9 provided for indemnification in such case, the Company and
each Holder of Registrable Securities shall contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after contribution
from others) in proportion to the relative fault of the Company, on the one
hand, and such Holder, severally, on the other hand; provided, however,
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that in any such case, 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 and; provided, further, that in no event shall any
contribution under this Section 1.9(d) on the part of any Holder exceed the net
proceeds received by such Holder from the sale of Registrable Securities.
(e) The obligations of the Company and the Holders under
this Section 1.9 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Agreement and otherwise.
Section 1.10 Reports Under Securities Exchange Act. With
a view to making available to the Holders the benefits of Rule 144 promulgated
under the Securities 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) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Securities Exchange Act; and
(b) furnish to any Holder, so long as such 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, the Securities Act and the Securities Exchange Act, 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 be reasonably requested in
availing any Holder of any rule or regulation of the SEC (exclusive of Rule
144A) which permits the selling of any such securities without registration or
pursuant to such form.
Section 1.11 Assignment of Registration Rights. The
rights to cause the Company to register any Registrable Securities pursuant to
this Agreement may be assigned (but only with all related obligations) by a
Holder to a transferee or assignee of such Registrable Securities that (i) is a
subsidiary of a Holder, or (ii) acquires not less than all of the shares of
Registrable Securities initially acquired by the Investor on the date of this
Agreement (as adjusted for stock splits, stock dividends, stock combinations and
the like); provided, however, (A) the transferor shall, within ten (10) days
after such transfer, furnish to the Company with written notice of the name and
address of such transferee or assignee and, in the case of a transfer in
accordance with subclause (i) above, details of the Registrable Securities with
respect to which such registration rights are being assigned, (B) such
transferee or assignee, prior to such transfer or assignment, shall agree in
writing to be subject to and bound by all restrictions set forth in this
Agreement including the provisions of Article II, and (C) such transfer or
assignment shall be effective only if immediately following such transfer or
assignment the further disposition of such Registrable Securities by the
transferee or assignee is restricted under the Securities Act and other
applicable securities law.
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Section 1.12 Rule 144. The Company shall not be required
to include the Registrable Securities of any Holder in a registration statement
filed pursuant to Section 1.4 if the Company delivers to such Holder(s) an
opinion of counsel, in form and substance reasonably acceptable to such
Holder(s), to the effect that the Registrable Securities requested to be
included in such Registration by the Holder may then be sold pursuant to Rule
144(k) of the Securities Act.
ARTICLE II.
RESTRICTIONS ON ACQUISITIONS AND DISPOSITIONS
Section 2.1 Standstill. Prior to the earlier of (i) the
termination by the Investor of the Collaboration Agreement pursuant to Section
19.5 thereof, and (ii) the fifth anniversary of the date of this Agreement,
without the express written consent of the Company, the Investor and its
Affiliates shall not:
(a) directly or indirectly, acquire beneficial ownership
of Shares of Then Outstanding Capital Stock or any securities convertible into
or exchangeable for Shares of Then Outstanding Capital Stock, or make a tender,
exchange or other offer to acquire Shares of Then Outstanding Capital Stock, if
after giving effect to such acquisition, the Investor would beneficially own (as
defined in Rule 13d-3 under the Securities Exchange Act) more than nineteen and
nine-tenths percent (19.9%) of the Shares of Then Outstanding Capital Stock;
provided, however, that notwithstanding the provisions of this Section 2.1(a),
if the number of shares constituting Shares of Then Outstanding Capital Stock is
reduced or if the aggregate ownership of the Investor is increased as a result
of a recapitalization of the Company, the Investor shall not be required to
dispose of any of its holdings of Shares of Then Outstanding Capital Stock even
though such action resulted in the Investor's ownership exceeding nineteen and
nine-tenths percent (19.9%) of the Shares of Then Outstanding Capital Stock;
(b) directly or indirectly, propose, nominate or support
for election to the Board of Directors any Person whose nomination has not been
approved by a majority of the Board of Directors, or vote or cause to be voted
in favor of any such Person any Shares of Then Outstanding Capital Stock;
(c) directly or indirectly, encourage or support a
tender, exchange or other offer or proposal by any other Person or group (an
"Offeror") the consummation of which would result in a "change of control" of
the Company (an "Acquisition Proposal");
(d) directly or indirectly, solicit proxies or consents
or become a participant in a solicitation (as such terms are defined in
Regulation 14A under the Securities Exchange Act) in opposition to the
recommendation of a majority of the Board of Directors of the Company with
respect to any matter, or seek to advise or influence any person, with respect
to voting of any Shares of Then Outstanding Capital Stock of the Company or any
of its subsidiaries;
11
(e) deposit any Shares of Then Outstanding Capital Stock
in a voting trust or subject any Shares of Then Outstanding Capital Stock to any
arrangement or agreement with respect to the voting of such Shares of Then
Outstanding Capital Stock; or
(f) instigate, act in concert with or assist any third
party to take any action in clauses (a) through (e) above;
provided that the mere voting of any Shares of Then Outstanding Capital Stock
held by the Investor shall not constitute a violation of any of clauses (a)
through (e) above.
Section 2.2 Termination of Standstill. The restrictions
contained in Section 2.1 shall terminate upon the earlier to occur of (i) the
public announcement by an Offeror of an Acquisition Proposal; (ii) the
acquisition by an Offeror (other than Leonard Schleifer) of beneficial ownership
of Shares of Then Outstanding Capital Stock, which, when combined with all other
Shares of Then Outstanding Capital Stock beneficially owned by the Offeror,
represents more than twenty percent (20%) of the voting power represented by all
issued and outstanding Shares of Then Outstanding Capital Stock; (iii) the entry
by the Company into negotiations with any third party or group with respect to a
transaction which, if consummated, would result in a "change of control," (iv)
the issuance by the Company to a third party of Shares of Then Outstanding
Capital Stock, which, when combined with all other Shares of Then Outstanding
Capital Stock beneficially owned by such third party, represents more than seven
percent (7%) of the voting power represented by all issued and outstanding
Shares of Then Outstanding Capital Stock, if the Company does not enter into a
standstill agreement for a time period and upon terms substantially similar to
the provisions of this Section 2; (v) a sale of all or substantially all of the
assets of the Company (other than to a wholly owned subsidiary of the Company);
or (vi) a liquidation or dissolution of the Company.
Section 2.3 Change of Control. For purposes this Article
II, a "change of control" shall mean (i) a merger or consolidation to which the
Company is a party and as a result of which the Persons who were stockholders of
the Company immediately prior to the effective date of such merger or
consolidation beneficially own (as defined in Rule 13d-3 under the Securities
Exchange Act) less than fifty percent (50%) of the voting stock of the surviving
parent entity outstanding immediately following the effectiveness of such merger
or consolidation; (ii) a sale of all or substantially all of the Company's
assets (other than to a wholly-owned subsidiary of the Company); or (iii) a
liquidation or dissolution of the Company.
Section 2.4 Lock-Up. Prior to the second anniversary of
the date of this Agreement (the "Lock-up Period"), without the approval of a
majority of the Board of Directors of the Company, the Investor shall not sell
or otherwise transfer, directly or indirectly, Registrable Securities (each, a
"Transfer"), provided, however that the foregoing shall not prohibit the
Investor from transferring all or part of the Purchased Stock to a subsidiary
which agrees to be bound by the terms hereof, and provided, further, that,
subject to compliance with the terms of Section 2.5, during the Lock-up Period
the Company may Transfer Registrable Securities in a transaction that is exempt
from the registration requirements of the Securities Act (other than pursuant to
Rule 144 under the Securities Act) (a "Permitted Transfer") subject to the terms
of Section 2.5.
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Section 2.5 Permitted Transfer; Right of First Offer.
(a) Prior to a Permitted Transfer to any Person of
Registrable Securities by the Investor, the Investor shall give written notice
(the "Sale Notice") to the Company. The Sale Notice shall (i) disclose the price
and terms upon which the Investor is willing to sell to the Company some or all
of the Registrable Securities held by it (the "Offered Registrable Securities"),
and (ii) confirm that the offer to purchase such Registrable Securities is
irrevocable for a period of at least ten (10) days (the "Notice Period"). The
Investor shall not consummate any Transfer until the earlier of (x) the
conclusion of the Notice Period and (y) the date on which the Company notifies
the Investor that it does not wish to purchase all (but not less than all) of
the Offered Registrable Securities (such earlier date, the "Authorization
Date").
(b) The Company may elect to purchase all (but not less
than all) of the Offered Registrable Securities upon the same terms and
conditions as those set forth in the Sale Notice by delivering a written notice
of such election to the Investor within ten (10) days after the Sale Notice has
been delivered to the Company. If the Company has not elected to purchase all of
the Offered Registrable Securities within ten (10) days after the Sale Notice
has been delivered to Company, the Investor may, during the sixty (60) day
period immediately following the Authorization Date, Transfer all such Offered
Registrable Securities specified in the Sale Notice at a price and on terms no
more favorable than those specified in the Sale Notice. Any Offered Registrable
Securities not Transferred during such sixty (60) day period shall be subject to
the provisions of this Section 2.5 upon a subsequent proposed Transfer prior to
the end of the Lock-up Period.
(c) If the Company has agreed to purchase all of the
Offered Registrable Securities set forth in the Sale Notice pursuant to Section
2.5(b), the closing of such purchase shall occur within ten (10) Business Days
from the date the Company has notified the Investor of its intention to purchase
all of such Offered Registrable Securities.
Section 2.6 Legend.
(a) Prior to the termination of the Lock-Up Period, each
certificate representing Registrable Securities shall bear the following legend:
PURSUANT TO THE TERMS AND CONDITIONS OF A REGISTRATION RIGHTS
AGREEMENT DATED MARCH 27, 2003, BY AND BETWEEN THE COMPANY AND
NOVARTIS PHARMA A.G., THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE SOLD OR OTHERWISE TRANSFERRED PRIOR TO
MARCH 28, 2005.
(b) Following the termination of the Lock-Up Period, the
holder of any stock certificate bearing such legend may submit such certificate
to the Company in exchange for a share certificate duly issued by the Company
which shall be identical in all material respects, except that it shall not bear
the foregoing legend.
13
Section 2.7 Injunctive Relief. It is hereby agreed and
acknowledged that it will be impossible to measure in money the damages that
would be suffered by the Company if the Investor fails to comply with the terms
of this Article II and that in the event of any such failure, the Company will
be irreparably damaged and will not have an adequate remedy at law. Each party
agrees (i) that in any action for equitable remedies arising from a breach of
this Article II, the Company will not be required to prove the inadequacy or
insufficiency of money damages as a remedy and (ii) to waive any requirement for
a bond in connection with any such injunctive or equitable relief or action
therefor.
ARTICLE III.
MISCELLANEOUS
Section 3.1 Amendment; Waiver. Any term of this
Agreement may be amended or waived only with the written consent of the Company
and the Holders of at least two-thirds (2/3) of the Registrable Securities then
outstanding; provided, however, that Section 2 may be amended or waived solely
with the written consent of the Company and the Investor.
Section 3.2 Remedies. In case any one or more of the
covenants or agreements set forth in this Agreement shall have been breached by
any party hereto, the party or parties entitled to the benefit of such covenants
or agreements may proceed to protect and enforce their rights either by suit in
equity or action at law, including, but not limited to, an action for damages as
a result of any such breach or an action for specific performance of any such
covenant or agreement contained in this Agreement. The rights, powers and
remedies of the parties under this Agreement are cumulative and not exclusive of
any other right, power or remedy which such parties may have under any other
agreement or law. No single or partial assertion or exercise of any right, power
or remedy of a party hereunder shall preclude any other or further assertion or
exercise thereof.
Section 3.3 Successors and Assigns. Except as otherwise
expressly 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. This Agreement and the rights and duties of the Company
set forth herein may not be assigned, in whole or in part, by the Company.
Section 3.4 Entire Agreement. This Agreement, together
with the Stock Purchase Agreement (including exhibits thereto), contains the
complete understanding of the Parties with respect to the subject matter hereof
and supersedes all prior understandings and writings relating to the subject
matter hereof and thereof.
Section 3.5 Governing Law; Consent to Jurisdiction. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to conflict of laws principles. Each of the
parties irrevocably submits to the exclusive jurisdiction of (a) the Supreme
Court of the State of New York, and (b) the United States District Court for the
Southern District of New York, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby.
Each of the
14
parties agrees to commence any action, suit or proceeding relating hereto in the
United States District Court for the Southern District of New York or if such
suit, action or other proceeding may not be brought in such court for
jurisdictional purposes, in the Supreme Court of the State of New York.
Section 3.6 Counterparts. This Agreement may be executed
in counterparts, each of which shall be deemed an original but which together
shall constitute one and the same instrument.
Section 3.7 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.
Section 3.8 Nouns and Pronouns. Whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of names and pronouns shall
include the plural and vice-versa.
Section 3.9 Notices. All notices, instructions and other
communications hereunder or in connection herewith shall be in writing, shall be
sent to the address of the Holder set forth below or as provided to the Company
upon any Person becoming a Holder, and shall be (a) delivered personally, (b)
sent by registered or certified mail, return receipt requested, postage prepaid,
(c) sent via a reputable nationwide overnight courier service, or (d) sent by
facsimile transmission, with a confirmation copy to be sent by registered or
certified mail, return receipt requested, postage prepaid. Any such notice,
instruction or communication shall be deemed to have been delivered upon receipt
if delivered by hand, three (3) Business Days after it is sent by registered or
certified mail, return receipt requested, postage prepaid, one (1) Business Day
after it is sent via a reputable nationwide overnight courier service, or when
transmitted with electronic confirmation of receipt, if transmitted by facsimile
(if such transmission is on a Business Day; or otherwise, on the next Business
Day following such transmission). Any Holder may change its address by giving
notice to the Company and the Company may change its address by giving notice to
the Holders in the manner provided above.
15
To the Company: Regeneron Pharmaceuticals, Inc.
777 Old Saw Mill Road
Tarrytown, New York 10591
Attention: General Counsel
With a copy (which Skadden, Arps, Slate, Meagher & Flom LLP
shall not constitute 4 Time Square
notice) to: New York, NY 10036
Attention: David J. Goldschmidt, Esq.
To the Investor: Novartis Pharma AG
Lichtstrasse 35
CH-4002 Basel
Switzerland
Attention: General Counsel
With a copy to (which: Novartis Corporation
shall not constitute 608 Fifth Avenue
notice) to New York, New York 10020
Attention: General Counsel and Deputy
General Counsel
Section 3.10 Severability. If, under applicable laws, any
provision hereof is invalid or unenforceable, or otherwise directly or
indirectly affects the validity of any other material provision(s) of this
Agreement ("Severed Clause"), then, it is mutually agreed that this Agreement
shall endure except for the Severed Clause. The parties shall consult and use
their best efforts to agree upon a valid and enforceable provision which shall
be a reasonable substitute for such Severed Clause in light of the intent of
this Agreement.
[Remainder of page intentionally blank]
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IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first above written.
NOVARTIS PHARMA AG
By: /s/ Joseph E. Mamie
------------------------------------
Name: Joseph E. Mamie
Title: Head Operational Treasury
By: /s/ Kim Urdahl
-------------------------------------
Name: Kim Urdahl
Title: Head of Legal, Primary Care
REGENERON PHARMACEUTICALS, INC.
By: /s/ Stuart Kolinski
-------------------------------------
Name: Stuart Kolinski
Title: Vice President & General Counsel
17
SCHEDULE 1.4(C)
Class D Convertible Preferred Stock Purchase Agreement dated as of August 31,
1990, between the Company and Amgen, Inc.