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EXHIBIT 10.26
GENOME THERAPEUTICS CORP.
REGISTRATION RIGHTS AGREEMENT
This AGREEMENT (the "Agreement") is made as of March 20, 1995 by and among
Genome Therapeutics Corp., a Massachusetts corporation (the "Company") and the
persons whose names are set forth on Schedule I hereto (the "Investors").
WHEREAS, the Investors have purchased, and the Company has issued and sold
to the Investors, (i) 850,000 shares (the "Shares") of the Company's Common
Stock, $.10 par value (the "Common Stock"), (ii) warrants to purchase 1,020,000
shares of Common Stock; such warrants ("Warrants") entitle their holder to
purchase one share (subject to adjustment) of Common Stock for the price of
$2.43 upon exercise of each such Warrant;
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. Registration Rights.
1.1. Definitions.
(a) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended (the "1933 Act"),
and the automatic effectiveness or the declaration or ordering of
effectiveness of such registration statement;
(b) "Registrable Securities" means (i) the Common Stock issued or
issuable upon conversion or exercise of the Warrants, whether or not such
other shares of Common Stock are owned by the Investors, (ii) the Shares
and all Common Stock now or hereafter owned by the Investors which are
acquired otherwise than upon conversion or exercise of Warrants so long as
such shares or other shares of Common Stock are held by the Investors, and
(iii) any shares of Common Stock of the Company issued as (or issuable upon
the conversion or exercise of any warrant, option, right, or
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other security which is issued as) a stock dividend, stock split or other
distribution with respect to, or in exchange for or in replacement of, the
shares described in (i) and (ii) above; provided, however, that shares of
Common Stock shall only be treated as Registrable Securities if and so long
as they have not been (x) sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction, or
(y) sold in a transaction exempt from the registration and prospectus
delivery requirements of the 1933 Act under Section 4(1) thereof so that
all transfer restrictions and restrictive legends with respect to such
Common Stock are removed upon the consummation of such sale.
(c) The number of shares of Registrable Securities outstanding at any
time shall be determined by adding the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which upon issuance
would be, Registrable Securities;
(d) The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any assignee thereof in accordance with
Section 1.12 hereof;
(e) The terms "Form S-1," "Form S-3," "Form S-4" and "Form S-8" mean
such respective forms under the 1933 Act as in effect on the date hereof or
any successor registration forms to Form S-1, Form S-3, Form S-4 and Form
S-8, respectively, under the 1933 Act subsequently adopted by the
Securities and Exchange Commission ("SEC").
1.2. Request for Registration.
(a) If the Company shall receive a written request from the Holder or
Holders of at least thirty percent (30%) of all Registrable Securities then
outstanding that the Company effect the registration under the 1933 Act
(including, if available, a registration pursuant to Rule 415 or a
successor rule or regulation under the 1933 Act) of all or any portion of
shares of Registrable Securities held by such requesting Holder or Holders,
then the Company shall, within five days of the receipt thereof, give
written
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notice of such request to all Holders and shall, subject to the limitations
of this Section 1.2, use its best efforts to effect such a registration as
soon as practicable and in any event to file within 90 days of the receipt
of such request a registration statement under the 1933 Act covering all
the Registrable Securities which the Holders shall in writing request
(given within 20 days of receipt of the notice given by the Company
pursuant to this Section 1.2(a)) to be included in such registration and to
use its best efforts to have such registration statement become effective.
(b) If the requesting Holder or Holders intend to distribute the
Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as 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). 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 to the extent provided herein. The Holders of a
majority of the shares of Registrable Securities to be sold in such
offering shall select an underwriter or underwriters, subject to the
approval of the Company, which approval shall not be unreasonably withheld.
All Holders proposing to distribute their securities through such
underwriting shall (together with the Company as provided in subsection
1.4(d)) enter into an underwriting agreement in customary form with the
selected underwriter or underwriters. The Company shall be entitled to
include in any Registration Statement referred to in this Section 1.2, for
sale in accordance with the method of disposition specified by the
requesting Holders, shares of Common Stock to be sold by the Company for
its own account, except as and to the extent that, in the opinion of the
managing underwriter, if any, such inclusion would adversely affect the
marketing, including, without limitation, the price or timing of the sale,
of the Registrable Securities to be sold. Notwithstanding any other
provision of this Section 1.2, if, in the case of a registration requested
pursuant to Section 1.2(a), the underwriter advises the Holders of
Registrable Securities to
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be sold in the offering and the Company in writing that marketing factors
require a limitation of the number of shares to be underwritten, then the
number of Registrable Securities that may be included in the underwriting
shall be allocated pro rata among all Holders thereof desiring to
participate in such underwriting (according to the number of Registrable
Securities requested to be included in such registration) except that, if
the maximum number of Registrable Securities which such underwriter advises
the Holders and the Company is limited to less than 80% of all Registrable
Securities requested to be registered, the Holders desiring to participate
in such underwriting may elect to abandon such registration and withdraw
such request. Except for registration statements on Form S-4, S-8 or any
successor thereto, the Company will not file with the SEC any other
registration statement with respect to its Common Stock or securities
convertible into or exchangeable for Common Stock, whether for its own
account or that of other stockholders, for 180 days from the date of
commencement of distribution of Registrable Securities pursuant to the
Registration Statement. No Registrable Securities requested by a Holder to
be included in a registration pursuant to Section 1.2(a) shall be excluded
from the underwriting unless all securities other than Registrable
Securities (including any proposed to be included by the Company) are first
excluded.
(c) The Company is obligated to effect only two registrations
pursuant to Section 1.2(a); provided, however, that no registration of
Registrable Securities which shall not have become and remained effective
in accordance with Section 1.4 hereof shall be deemed to be a registration
for any purpose of this sentence; provided further, however, that if a
registration is withdrawn on the instructions of the Holders of a majority
of the Registrable Securities in such registration, if such Registrable
Securities are more than 80% of all Registrable Securities outstanding, it
shall be deemed a registration for purposes of this sentence unless and
until the Company is reimbursed in full for all of its expenses incurred in
connection with such registration.
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(d) Notwithstanding the foregoing, (i) the Company shall not be
obligated to effect the filing of a registration statement pursuant to this
Section 1.2 during the 180 days following the effective date of a
registration statement pertaining to the underwritten public offering of
equity securities for the account of the Company, or (ii) the Company shall
be entitled to postpone for up to 180 days the filing of any registration
statement otherwise required to be prepared and filed pursuant to this
Section 1.2, if the Board determines, in its good faith reasonable judgment
(with the concurrence of the managing underwriter, if any), that such
registration of Registrable Securities contemplated thereby would
materially interfere with, or require premature disclosure of, any
financing (including an underwritten public offering of equity securities
or securities convertible into equity securities), acquisition or
reorganization involving the Company or any of its wholly owned
subsidiaries and the Company promptly gives the Holders requesting such
registration notice of such determination; provided, however, that the
Company may not utilize the right set forth in subsection (d)(ii) more than
once in any twenty-four period.
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 stockholders other than the Holders) any of its equity
securities (or, in the case of a registration pursuant to Rule 415 under the
1933 Act, any securities) under the 1933 Act in connection with the public
offering of such securities solely for cash (other than a registration on Form
S-8 or any successor form relating solely to the sale of securities to
participants in a Company stock plan, or a registration on Form S-4 or any
successor form), the Company shall, at such time, promptly give each Holder
written notice of such registration. Upon the written request of any Holder
given within 20 days after mailing of such notice by the Company the Company any
shall, subject to the provisions of Section 1.8, use its best efforts to cause a
registration statement covering all of the Registrable Securities that each such
Holder has requested to be registered to become effective under the 1933 Act.
The Company shall be under no obligation to complete any offering of its
securities it proposes to make and shall incur no liability to any Holder for
its failure to do so.
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1.4. Obligations of the Company. Whenever required under this Section 1 to
use its best efforts to effect the registration of any Registrable Securities,
the Company shall, as expeditiously as reasonably possible: prepare and file
with the SEC a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become effective, and, upon the request of the Holders of a majority of the
Registrable Securities registered thereunder, keep such registration statement
effective for up to 180 days, or, in the case of a registration statement filed
pursuant to Rule 415, or a successor rule or regulation, under the 1933 Act, up
to two years, or until the Holders have informed the Company in writing that the
distribution of their securities has been completed; and shall:
(a) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement, and use its best efforts to cause each such
amendment to become effective, as may be necessary to comply with the
provisions of the 1933 Act with respect to the disposition of all
securities covered by such registration statement;
(b) Furnish to the Holders such reasonable number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them;
(c) Use its best efforts to register or 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 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 jurisdiction;
(d) 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
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underwriter of such offering. Each Holder participating in such
underwriting shall also enter into and perform its obligations under such
an agreement, including furnishing any opinion of counsel concerning such
Holder as is reasonably requested by the managing underwriter;
(e) Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto
covered by such registration statement is required to be delivered under
the 1933 Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
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 promptly file such amendments and supplements which may be
required pursuant to subparagraph (a) of this Section 1.4 on account of
such event and use its best efforts to cause each such amendment and
supplement to become effective;
(f) 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 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
or opinions, dated such date, of the counsel representing the Company for
the purposes of such registration, in form and substance as is customarily
given by company counsel to the underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities and (ii) a letter dated
such date, from the independent certified public accountant 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;
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(g) Apply for listing and use its best efforts to list the
Registrable Securities being registered on any national securities exchange
on which a class of the Company's equity securities is listed or, if the
Company does not have a class of equity securities listed on a national
securities exchange, apply for qualification and use its best efforts to
qualify the Registrable Securities being registered for inclusion on the
automated quotation system of the National Association of Securities
Dealers, Inc.; and
(h) Without in any way limiting the types of registrations to which
this Section 1 shall apply, in the event that the Company shall effect a
"shelf registration" under Rule 415 promulgated under the 1933 Act, the
Company shall take all necessary action, including, without limitation, the
filing of post-effective amendments, to permit the Holders to include their
Registrable Securities in such registration in accordance with the terms of
this Section 1.
1.5. Obligations of Holders.
(a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 1 in respect of the
Registrable Securities of any selling Holder that such selling Holders
shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them, and the intended method of disposition
of such securities as shall be required to effect the registration of their
Registrable Securities.
(b) The Holders of Registrable Securities included in any registration
statement filed pursuant to this Section 1 will not (until further notice)
effect sales thereof after receipt of telegraphic or written notice from
the Company to suspend sales pursuant to such registration statement to
permit the Company to correct or update such registration statement or
prospectus, but the obligations of the Company with respect to maintaining
any registration statement current and effective shall be extended by a
period of days equal to the period such suspension is in effect.
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(c) At the end of any period during which the Company is obligated to keep
any registration statement filed pursuant to this Section 1 current and
effective pursuant to this Agreement, the Holders of Registrable Securities
included in such registration statement shall discontinue sales of Registrable
Securities pursuant to the registration statement upon receipt of written
notice from the Company of its intention to remove from registration the
Registrable Securities covered by such registration statement that remain
unsold, and such Holders shall notify the Company of the number of Registrable
Securities that remain unsold promptly after receipt of such notice from the
Company.
1.6. Expenses of Demand Registration. All expenses other than underwriting
discounts and commissions relating to Registrable Securities incurred in
connection with each registration, filing or qualification pursuant to Section
1.2(a), including all registration, filing and qualification fees, printing and
accounting fees, and fees and disbursements of counsel for the Company and one
counsel for the Holders participating in such registration shall be borne by the
Company; provided, however, that the Company shall not be required to pay for
any expenses of any registration proceeding begun pursuant to Section 1.2(a) if
the registration request is subsequently withdrawn at any time at the request of
the Holders of a majority of the Registrable Securities to be registered (in
which case all participating Holders shall bear such expenses), unless (a) such
registration request is withdrawn by Holders because the maximum number of
Registrable Securities is limited by the underwriters to less than 80% of all
Registrable Securities requested to be registered as permitted by Section
1.2(b), or (b) the Holders of a majority of the Registrable Securities agree to
forfeit their right to one demand registration pursuant to Section 1.2(a);
provided further, however, that if at the time of such withdrawal, the Holders
have learned of a material adverse change in the condition (financial or other),
business, properties, or prospects of the Company from that known to the Holders
of a majority of the Registrable Securities then outstanding at the time of
their request that makes the proposed offering unreasonable in the good faith
judgment of the Holders of a majority of the Registrable Securities then the
Holders shall not be required to pay any of such expenses and the right to one
demand registration pursuant to Section 1.2(a) shall not be
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forfeited. Underwriting discounts and commissions relating to Registrable
Securities will be borne and paid ratably by the Holders of such Registrable
Securities.
1.7. Expenses of Company Registration. The Company shall bear and pay all
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to the registrations pursuant to Section
1.3 for each Holder (which right may be assigned as provided in Section 1.13),
including, without limitation, all registration, filing and qualification fees,
printing and accounting fees, fees and disbursements of counsel for the Company
and one counsel for the Holders participating in such registration. Underwriting
discounts and commissions relating to Registrable Securities will be borne and
paid ratably by the Holders of such Registrable Securities.
1.8. Underwriting Requirements. In connection with any offering involving
an underwriting of securities being issued by the Company, the Company shall not
be required under Section 1.3 to include any of the Holders' Registrable
Securities in such underwriting unless such Holder accepts the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it. If the managing underwriter for the offering shall advise the Company in
writing that the total amount of securities, including Registrable Securities,
requested by shareholders to be included in such offering exceeds the amount of
securities to be sold other than by the Company that can be successfully
offered, then the Company shall be required to include in the offering only that
number of such securities, including Registrable Securities, which the managing
underwriter believes will not jeopardize the success of the offering. The
securities to be excluded shall be as follows: all securities other than those
to be included by the Company for its own account and other than those which the
Holders seek to include in the offering shall be excluded from the offering to
the extent limitation on the amount of securities included in the underwriting
is required. If further limitation on the amount of securities to be included in
the underwriting is required, then the number of Registrable Securities held by
Holders that may be included in the underwriting shall be reduced pro rata among
the selling Holders in accordance with the number of Registrable
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Securities requested to be included in registration by such Holders.
1.9. Indemnification. In the event any Registrable Securities are included
in a registration statement under this Section 1:
(a) The Company will indemnify and hold harmless each Holder, the
officers, directors, partners, agents and employees of each Holder, any
underwriter (as defined in the 1933 Act) for such Holder and each person,
if any, who controls such Holder or underwriter within the meaning of the
1933 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 1933 Act, the 1934 Act
or other federal or state 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, in light of the circumstances in which they
were made, not misleading, or (iii) any violation or alleged violation by
the Company of the 1933 Act, the 1934 Act, any state securities law or any
rule or regulation promulgated under the 1933 Act, the 1934 Act or any
state securities law in connection with any matter relating to such
registration statement. The Company will reimburse each such Holder,
officer, director, partner, agent, employee, underwriter or controlling
person for any legal or other expenses reasonably incurred, and as
incurred, by them in connection with investigating or defending any such
loss, claim, damage, liability, or action. The indemnity agreement
contained in this subsection 1.9(a) shall not apply to amounts paid in
settlement of any loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent
shall not be
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unreasonably withheld), nor shall the Company be liable to a Holder in any
such case for any such loss, claim, damage, liability, or action (i) 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,
underwriter or controlling person or (ii) in the case of a sale directly by
a Holder of Registrable Securities (including a sale of such Registrable
Securities through any underwriter retained by such Holder to engage in a
distribution solely on behalf of such Holder), such untrue statement or
alleged untrue statement or omission or alleged omission was contained
either (i) in a document distributed by such Holder that was not authorized
by the Company or (ii) in a preliminary prospectus and corrected in a final
or amended prospectus, if such Holder failed to deliver a copy of the final
or amended prospectus at or prior to the confirmation of the sale of the
Registrable Securities to the person asserting any such loss, claim, damage
or liability in any case where such delivery is required by the Securities
Act; provided, however, that this indemnity shall not be deemed to relieve
any underwriter of any of its due diligence obligations.
(b) The Company may require, as a condition to including any
Registrable Securities in any registration statement, that the Company
shall have received an undertaking from the prospective selling Holder that
such selling Holder will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the registration
statement, each person, if any, who controls the Company within the meaning
of the 1933 Act, each agent and any underwriter for the Company, and any
other Holder selling securities in such registration statement or any of
its directors, officers, partners, agents or employees or any person who
controls such Holder or underwriter, against any losses, claims, damages,
or liabilities (joint or several) to which the Company or any such
director, officer, controlling person, agent, or underwriter or controlling
person, or other such Holder or director, officer or controlling person may
become subject, under the 1933 Act, the 1934 Act or other federal or state
law, insofar as such losses, claims, damages or liabilities
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(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 reimburse any legal or other
expenses reasonably incurred, and as incurred, by the Company or any such
director, officer, controlling person, agent or underwriter or controlling
person, other Holder, officer, director, partner, agent, employee, or
controlling person in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided, however, that the
liability of any Holder hereunder shall be limited to the amount of net
proceeds (after deduction of all underwriters' discounts and commissions
and all other expenses paid by such Holder in connection with the
registration in question) received by such Holder, in the offering giving
rise to the Violation; and provided further that the indemnity agreement
contained in this subsection 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 the consent of the Holder, which consent
shall not be unreasonably withheld nor, in the case of a sale directly by
the Company of its securities (including a sale of such securities through
any underwriter retained by the Company to engage in a distribution solely
on behalf of the Company), shall the Holder be liable to the Company in any
case in which such untrue statement or alleged untrue statement or omission
or alleged omission was contained in a preliminary prospectus and corrected
in a final or amended prospectus, and the Company failed to deliver a copy
of the final or amended prospectus at or prior to the confirmation of the
sale of the securities to the person asserting any such loss, claim, damage
or liability in any case where such delivery is required by the 1933 Act.
(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 will, 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
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commencement thereof and 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 and
control the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that if the Indemnifying Party elects to assume
and control the defense thereof, such Indemnifying Party shall be deemed to
have assumed all liability with respect to such action and accepted all
liability with respect to such claim thereunder; provided, further, 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, as
reasonably determined by either party, 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 to the extent of
such prejudice, but the omission so to 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 1.9.
(d) If the indemnification provided for in this Section 1.9 is
unavailable to a party that would have been an indemnified party under such
Section in respect of any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to therein, then each
party that would have been an indemnifying party thereunder shall, in lieu
of indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions or proceedings in
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respect thereof) in such proportion as is appropriate to reflect the
relative fault of such indemnifying party on the one hand and such
indemnified party on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof). The relative fault shall be
determined by reference to, among other things, whether the Violation
relates to information supplied by such indemnifying party or such
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such Violation. The
parties agree that it would not be just and equitable if contribution
pursuant to this Section 1.9(e) were determined by pro rata allocation or
by any other method of allocation which does not take account of the
equitable considerations referred to in the preceding sentence. The amount
paid or payable by a contributing party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 1.9(d) shall include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The liability of any
Holder of Registrable Securities in respect of any contribution obligation
of such Holder (after deduction of all underwriters' discounts and
commissions and all other expenses paid by such Holder in connection with
the registration in question) arising under this Section 1.9(e) shall not
in any event exceed an amount equal to the net proceeds to such Holder from
the disposition of the Registrable Securities disposed of by such Holder
pursuant to such registration.
1.10. Reports Under 1934 Act.
(a) Resales Under Rule 144; Form S-3 Registration. With a view to
making available to the Holders the benefits of Rule 144 promulgated under
the 1933 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, and with a view to making it possible for Holders to
register the Registrable Securities pursuant to a registration on Form S-3,
the Company agrees to:
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(i) use its best efforts to make and keep public information
available, as those terms are understood and defined in Rule 144;
(ii) use its best efforts to file with the SEC in a timely manner
all reports and other documents required of the Company under the 1933
Act and the 1934 Act; and
(iii) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement
by the Company as to its compliance with the reporting requirements of
Rule 144, the 1933 Act and the 1934 Act, or as to its qualification as
a registrant whose securities may be resold pursuant to Form S-3, (ii)
a copy of the most recent annual, quarterly and current reports 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 which permits
the selling of any Registrable Securities without registration or
pursuant to such form.
1.11. Lock-up Agreements. If requested by the Company and the managing
underwriter, the Holders agree to enter into lock-up agreements pursuant to
which they will not, for a specified period not to exceed 180 days following the
effective date of a registration statement, offer, sell or otherwise dispose of
the Registrable Securities, except the Registrable Securities sold pursuant to
such registration statement, without the prior consent of the Company and the
underwriter, provided that each officer and director of the Company enter such
lock-up agreements for the same period and on the same terms.
1.12. Assignment of Registration Rights. The rights to cause the Company to
register Registrable Securities pursuant to this Section 1 may be assigned by
any Holder to a permitted transferee, and by such transferee to a subsequent
permitted transferee, but only if such rights are transferred (i) to an
affiliate, partner or stockholder of such Holder or transferee or (ii) in
connection with the sale or other transfer of Registrable Securities. Any
transferee to whom rights under this Agreement are transferred shall (a) as a
condition to such transfer, deliver to the Company a written instrument by which
such transferee agrees to be bound by the obligations imposed upon Holders under
this Agreement to the same extent as if she, he or it were a Holder under this
Agreement
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and (b) be deemed to be a Holder hereunder.
2. Miscellaneous.
2.1. Legend. Each certificate representing Registrable Securities shall
state therein:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF
A REGISTRATION RIGHTS AGREEMENT DATED AS OF MARCH 20, 1995 BY AND AMONG THE
CORPORATION AND THE INVESTORS NAMED THEREIN, A COPY OF WHICH IS ON FILE AT
THE OFFICES OF THE CORPORATION.
2.2. Notices. All notices, requests, consents and demands shall be in
writing and shall be personally delivered, mailed, postage prepaid, telecopied
or telegraphed, to the Company at:
Genome Therapeutics Corp.
100 Beaver Street
Waltham, MA 02154
Attn: Mr. Fenel M. Eloi
with a copy to:
Ropes & Gray
One International Place
Boston, MA 02110-2624
Attn: David C. Chapin, Esq.
If to the Investors, at the addresses set forth below their names on Schedule I
hereto with a copy to:
Sidley & Austin
One First National Plaza
Chicago, IL 60603
Attn: David R. Sawyier, Esq.
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or such other address as may be furnished in writing to the other parties
hereto. All such notices, requests, demands and other communications shall, when
mailed (registered mail, return receipt requested, postage prepaid), personally
delivered, or telegraphed, be effective four days after deposit in the mails,
when personally delivered, or when delivered to the telegraph company,
respectively, addressed as aforesaid, unless otherwise provided herein and, when
telecopied, shall be effective upon actual receipt.
2.3. Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the matters contemplated herein. This Agreement
supersedes any and all prior understandings or agreements as to the subject
matter of this Agreement.
2.4. Amendments, Waivers and Consents. Any provision in this Agreement to
the contrary notwithstanding, changes in or additions to this Agreement may be
made, and compliance with any covenant or provision herein set forth may be
omitted or waived, if the Company (i) shall obtain consent thereto in writing
from persons holding or having the right to acquire in the aggregate a majority
of the Registrable Securities then outstanding and (ii) shall, in each such
case, deliver copies of such consent in writing to any holders who did not
execute the same. Notwithstanding the foregoing, any amendment to this Agreement
which materially adversely affects the rights or substantially increases the
obligations of any Holder of Registrable Securities and which does not also
affect all other holders either to the same degree or in proportion to the
amount of Registrable Securities held by each of them shall require the consent
of such adversely affected Holder.
2.5. Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the personal representatives, successors and permitted
assigns of the respective parties hereto. The Company shall not have the right
to assign its obligations hereunder or any interest herein without obtaining the
prior written consent of the Holders of a majority of the Registrable Securities
then outstanding, provided in accordance with Section 2.4, other than in
connection with the merger of the Company with or into another entity or the
sale of all or substantially all of the Company's assets.
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2.6. General. The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement. In this Agreement the singular includes the plural, the plural,
the singular, the masculine gender includes the neuter, masculine and feminine
genders. This Agreement shall be governed by and construed under the internal
laws of The Commonwealth of Massachusetts.
2.7. Severability. If any provisions of this Agreement shall be found by
any court of competent jurisdiction to be invalid or unenforceable, the parties
hereby waive such provision to the extent that it is found to be invalid or
unenforceable. Such provision shall, to the maximum extent allowable by law, be
modified by such court so that it becomes enforceable, and, as modified, shall
be enforced as any other provision hereof, all the other provisions hereof
continuing in full force and effect.
2.8. Counterparts. This Agreement may be executed in counterparts, all of
which together shall constitute one and the same instrument.
2.9. 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 at least a majority of the then outstanding Registrable
Securities enter into any agreement with any holder or prospective holder of any
securities of the Company which would: (i) allow such holder or prospective
holder to include such securities in any registration filed under Section 1.2(a)
hereof if such inclusion would adversely affect the rights of any Holder of
Registrable Securities hereunder; or (ii) permit such holder or prospective
holder pursuant to Section 1.3 to "piggyback" on a senior basis on a
registration statement filed with respect to the Company's securities.
2.10. Remedies. Each Holder of Registrable Securities, in addition to being
entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Agreement
and hereby agrees to waive the
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defense in any action for specific performance that a remedy of law would be
adequate.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
a duly authorized officer, and the Investors have duly executed this Agreement
(or has caused it to be executed by a duly authorized officer, partner, trustee
or agent, as the case may be), as of the date first above recited.
GENOME THERAPEUTICS CORP.
By:
---------------------------------------------
Robert J. Hennessey,
President and Chief Executive Officer
BIOTECHNOLOGY VALUE FUND, L.P.
By: BVF Partners, L.P., its general partner
By: BVF Inc., its general partners
By:
---------------------------------------------
Mark N. Lampert, President
INVESTMENT 10 L.L.C.
By: Grosvenor Multi-Strategy Fund, L.P., Member
By: Grosvenor Capital Management, L.P., its
general partner
By: Grosvenor Capital Management, Inc., its
general partner
By:
---------------------------------------------
Michael Sacks, Vice President
22
BIOTECH 1 INVESTMENT L.L.C.
By:
---------------------------------------------
Michael Sacks, Manager
BIOTECH 2 INVESTMENT L.L.C.
By:
---------------------------------------------
Michael Sacks, as Custodian for Matthew
Sacks, Manager
FOUR PARTNERS
By:
---------------------------------------------
Thomas J. Tisc, as Trustee for The Thomas J.
Tisch 1991 Trust, General Partner
------------------------------------------------
Julian C. Baker
23
Schedule I
List of Investors
PURCHASER AMOUNT STOCK WARRANTS
Biotechnology Value Fund, L.P $ 635,425.00 261,490 313,788
One Sansome Street
San Francisco, CA
Investment 10 L.L.C $ 272,325.00 112,070 134,484
333 W. Wacker Dr. #1600
Chicago, IL 60606
Biotech 1 Investment L.L.C $ 859,187.24 373,560 0
333 W. Wacker Dr. #1600
Chicago, IL 60606
Biotech 2 Investment L.L.C $ 48,562.76 0 448,272
333 W. Wacker Dr. #1600
Chicago, IL 60606
Four Partners $ 225,000.00 92,590 111,108
667 Madison Ave
New York, NY
Julian Baker $ 25,000.00 10,290 12,348
667 Madison Ave
New York, NY
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TOTAL: $2,065,500.00 850,000 1,020,000