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EXHIBIT 4.2
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
FILED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT.
VOID AFTER 5:00 P.M., NEW YORK CITY TIME, ON ____________, 1999 OR IF NOT A
BUSINESS DAY, AS DEFINED HEREIN, AT 5:00 P.M., NEW YORK CITY TIME, ON THE NEXT
FOLLOWING BUSINESS DAY.
NO. ______ WARRANT TO PURCHASE
_______
SHARES OF THE COMMON STOCK, $.10 PAR VALUE PER SHARE
OF
GENOME THERAPEUTICS CORP.
This certifies that, for good and valuable consideration, Oppenheimer &
Co., Inc., and its registered, permitted assigns (collectively, the
"Warrantholder"), is entitled to purchase from Genome Therapeutics Corp., a
Massachusetts corporation (the "Company"), subject to the terms and conditions
hereof, at any time on or after 9:00 A.M., New York City time, on ________ __,
1997, and before 5:00 P.M., New York City time on _________ __, 1999 (or, if
such day is not a Business Day, on or before 5:00 P.M., New York City time, on
the next following Business Day), the number of fully paid and nonassessable
shares of Common Stock stated above at the Exercise Price (as defined herein)
payable for each of such shares. The Exercise Price and the number of shares
purchasable hereunder are subject to adjustment from time to time as provided in
Article III hereof.
ARTICLE I
Section 1.01: Definition of Terms. As used in this Warrant, the
following capitalized terms shall have the following respective meanings:
(a) Business Day: A day other than a Saturday, Sunday or other day on
which banks in the State of New York are authorized by law to remain closed.
(b) Common Stock: Common Stock, $.10 par value per share, of the
Company.
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(c) Common Stock Equivalent: Warrants, options, subscription or
purchase rights with respect to shares of Common Stock or any securities
convertible into or exchangeable for shares of Common Stock or warrants,
options, subscription or purchase rights with respect to such convertible or
exchangeable securities.
(d) Demand Registration: As defined in Section 6.02.
(e) Exchange Act: The Securities Exchange Act of 1934, as amended.
(f) Exercise Price: $____ per Warrant Share, as such price may be
adjusted from time to time pursuant to Article III hereof. [an amount equal to
120% of the average per share bid price for the five trading days prior to
pricing of the offering]
(g) Expiration Date: 5:00 P.M., New York City time, on _________ __,
1999, or if such day is not a Business Day, the next succeeding day which is a
Business Day.
(h) 25% Holders: At any time as to which a Demand Registration is
requested, the Holder and/or the holders of any other Warrants and/or the
holders of Warrant Shares who have the right to acquire or hold, as the case may
be, not less than 25% of the combined total of Warrant Shares issuable and
Warrant Shares outstanding at the time such Demand Registration is requested.
(i) Holder: A Holder of Registrable Securities.
(j) NASD: National Association of Securities Dealers, Inc.
(k) Person: An individual, partnership, joint venture, corporation,
trust, unincorporated organization or government or any department or agency
thereof.
(l) Piggyback Registration: As defined in Section 6.01.
(m) Prospectus: Any prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments and all material incorporated by
reference in such Prospectus.
(n) Public Offering: A public offering of any of the Company's equity
or debt securities pursuant to a registration statement under the Securities
Act.
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(o) Registration Expenses: Any and all expenses attributable to the
Company and incurred in connection with any registration or action incident to
performance of or compliance by the Company with Article VI, including, without
limitation, (i) all SEC, national securities exchange and NASD registration and
filing fees; all listing fees and all transfer agent fees; (ii) all fees and
expenses of complying with state securities or blue sky laws (including the fees
and disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities); (iii) all printing, mailing,
messenger and delivery expense and (iv) all fees and disbursements of counsel
for the Company and of its accountants, including the expenses of any special
audits and/or "cold comfort" letters required by or incident to such performance
and compliance, but excluding underwriting discounts and commissions, brokerage
fees and transfer taxes, if any, and fees of counsel or accountants retained by
the Holders of Registrable Securities to advise them in their capacity as
Holders of Registrable Securities.
(p) Registrable Securities: Any Warrant Shares issued to Oppenheimer &
Co., Inc., and/or its designees or transferees as permitted under Section 5.02
and/or other securities that may be or are issued by the Company upon exercise
of this Warrant, including those which may thereafter be issued by the Company
in respect of any such securities by means of any stock splits, stock dividends,
recapitalizations, reclassifications or the like, and as adjusted pursuant to
Article III hereof.
(q) Registration Statement: Any registration statement of the Company
filed or to be filed with the SEC which covers any of the Registrable Securities
pursuant to the terms of this Agreement, including all amendments (including
post-effective amendments) and supplements thereto, all exhibits thereto and all
material incorporated therein by reference.
(r) SEC: The Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act or the Exchange Act.
(s) Securities Act: The Securities Act of 1933, as amended.
(t) Transfer: As defined in Section 5.02.
(u) Warrants: This Warrant and all other warrants that may be issued in
its or their place (together evidencing the right to purchase an aggregate of
______ shares of Common Stock) originally issued as set forth in the definition
of Registrable Securities.
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(v) Warrant Shares: Common Stock purchasable upon exercise of the
Warrants or any other securities for which the Warrants may become exercisable
pursuant to Section 3.01 hereof.
ARTICLE II
DURATION AND EXERCISE OF WARRANT
Section 2.01: Duration of Warrant. The Warrantholder may exercise this
Warrant at any time and from time to time after 9:00 A.M., New York City time,
on _________ __, 1997, and before 5:00 P.M., New York City time, on the
Expiration Date. If this Warrant or any portion thereof is not exercised on or
prior to the Expiration Date, it shall become void, and all rights hereunder
shall thereupon cease.
Section 2.02: Exercise of Warrant.
(a) The Warrantholder may exercise this Warrant, in whole or in part by
presentation and surrender of this Warrant to the Company at its principal
executive offices or at the office of its stock transfer agent, if any, with a
Subscription Form in the form attached hereto as Annex A duly executed and
accompanied by payment of the full Exercise Price for each Warrant Share to be
purchased.
(b) Upon receipt of this Warrant with the Subscription Form duly
executed and accompanied by payment of the aggregate Exercise Price for the
Warrant Shares for which this Warrant is then being exercised, the Company shall
cause to be issued certificates for the total number of whole shares of Common
Stock for which this Warrant is being exercised (adjusted to reflect the effect
of any anti-dilution provisions contained in Article III hereof, if any, and as
provided in Section 2.04) in such denominations as are requested for delivery to
the Warrantholder, and the Company shall thereupon deliver such certificates to
the Warrantholder. The Warrantholder shall be deemed to be the holder of record
of the Warrant Shares issuable upon such exercise, notwithstanding that the
stock transfer books of the Company shall then be closed or that certificates
representing such Warrant Shares shall not then be actually delivered to the
Warrantholder. If at the time this Warrant is exercised, a Registration
Statement is not in effect to register under the Securities Act the Warrant
Shares issuable upon exercise of this Warrant, the Company may require the
Warrantholder to make such representations, and may place such legends on
certificates representing the Warrant Shares, as may be reasonably required in
the opinion of counsel to the Company to permit the Warrant Shares to be issued
without such registration.
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(c) In case the Warrantholder shall exercise this Warrant with respect
to less than all of the Warrant Shares that may be purchased under this Warrant,
the Company shall execute a new warrant in the form of this Warrant for the
balance of such Warrant Shares and deliver such new warrant to the
Warrantholder.
(d) The Company shall pay any and all stock transfer and similar taxes
which may be payable in respect of the issue of this Warrant and any Warrant
Shares.
Section 2.03: Reservation of Shares. The Company hereby agrees that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant such number of Warrant Shares from time to time issuable upon
exercise of this Warrant. All such Warrant Shares shall be duly authorized, and
when issued upon such exercise, shall be validly issued, fully paid and
nonassessable, free and clear of all liens, security interests, charges and
other encumbrances or restrictions on sale and free and clear of all preemptive
rights.
Section 2.04: Fractional Shares. The Company shall not be required to
issue any fraction of a share of its capital stock in connection with the
exercise of this Warrant, and in any case where the Warrantholder would, except
for the provisions of this Section 2.04, be entitled under the terms of this
Warrant to receive a fraction of a share upon the exercise of this Warrant, the
Company shall, upon the exercise of this Warrant and receipt of the Exercise
Price (as adjusted to cover the balance of the share), issue the larger number
of whole shares purchasable upon exercise of this Warrant. The Company shall not
be required to make any cash or other adjustment in respect of such fraction of
a share to which the Warrantholder would otherwise be entitled.
Section 2.05: Listing. Prior to the issuance of any Warrant Shares upon
exercise of this Warrant, the Company shall secure the listing of such Warrant
Shares upon each national securities exchange or automated quotation system, if
any, upon which shares of the Common Stock are then listed (subject to official
notice of issuance upon exercise of this Warrant) and shall maintain, so long as
any other shares of the same class of capital stock shall be so listed, such
listing of all Warrant Shares from time to time issuable upon the exercise of
this Warrant; and the Company shall so list on each national securities exchange
or automated quotation system, and shall maintain such listing of, any other
shares of capital stock of the Company issuable upon the exercise of this
Warrant if and so long as any shares of the same class shall be listed on such
national securities exchange or automated quotation system.
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ARTICLE III
ADJUSTMENT OF NUMBER AND KIND OF WARRANT SHARES
PURCHASABLE AND OF EXERCISE PRICE
The Exercise Price and the number and kind of Warrant Shares shall be
subject to adjustment from time to time upon the happening of certain events as
provided in this Article III.
Section 3.01: Mechanical Adjustments.
(a) If at any time prior to the exercise of this Warrant in full, the
Company shall (i) declare a dividend or make a distribution on the Common Stock
payable in shares of its capital stock (whether shares of Common Stock or of
capital stock of any other class); (ii) subdivide, reclassify or recapitalize
outstanding Common Stock into a greater number of shares; (iii) combine,
reclassify or recapitalize its outstanding Common Stock into a smaller number of
shares; or (iv) issue any shares of its capital stock by reclassification of its
Common Stock (including any such reclassification in connection with a
consolidation or a merger in which the Company is the continuing corporation),
the Exercise Price in effect at the time of the record date of such dividend,
distribution, subdivision, combination, reclassification or recapitalization
shall be adjusted so that the Warrantholder shall be entitled to receive the
aggregate number and kind of shares which, if this Warrant had been exercised in
full immediately prior to such event, it would have owned upon such exercise and
been entitled to receive by virtue of such dividend, distribution, subdivision,
combination, reclassification or recapitalization. Any adjustment required by
this paragraph 3.01(a) shall be made successively immediately after the record
date, in the case of a dividend or distribution, or the effective date, in the
case of a subdivision, combination, recapitalization or recapitalization, to
allow the purchase of such aggregate number and kind of shares.
(b) If at any time prior to the exercise of this Warrant in full, the
Company shall fix a record date for the issuance or making a distribution to all
holders of Common Stock (including any such distribution to be made in
connection with a consolidation or merger in which the Company is to be the
continuing corporation) of evidences of its indebtedness, any other securities
of the Company or any cash, property or other assets (excluding a combination,
reclassification or recapitalization referred to in Section 3.01(a), regular
cash dividends or cash distributions paid out of net profits legally available
therefor and in the ordinary course of business and subscription rights, options
or warrants for Common Stock or Common Stock Equivalents (any such non-excluded
event being herein
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called a "Special Dividend"), (i) the Exercise Price shall be decreased
immediately after the record date for such Special Dividend to a price
determined by multiplying the Exercise Price then in effect by a fraction, the
numerator of which shall be the then current market price per share of the
Common Stock (as defined in Section 3.01(e)) on such record date less the fair
market value (as determined by the Company's Board of Directors) of the
evidences of indebtedness, securities or property, or other assets issued or
distributed in such Special Dividend applicable to one share of Common Stock or
of such subscription rights, options or warrants applicable to one share of
Common Stock and the denominator of which shall be such then current market
price per share of Common Stock (as so determined) and (ii) the number of shares
of Common Stock subject to purchase upon exercise of this Warrant shall be
increased to a number determined by multiplying the number of shares of Common
Stock subject to purchase immediately before such Special Dividend by a
fraction, the numerator of which shall be the Exercise Price in effect
immediately before such Special Dividend and the denominator of which shall be
the Exercise Price in effect immediately after such Special Dividend. Any
adjustment required by this paragraph 3.01(b) shall be made successively
whenever such a record date is fixed and in the event that such distribution is
not so made, the Exercise Price shall again be adjusted to be the Exercise Price
that was in effect immediately prior to such record date.
(c) If at the time prior to the exercise of this Warrant in full, the
Company shall make a distribution to all holders of the Common Stock of stock of
a subsidiary of the Company or securities convertible into or exercisable for
such stock, then in lieu of an adjustment in the Exercise Price or the number of
Warrant Shares purchasable upon the exercise of this Warrant, each
Warrantholder, upon the exercise hereof at any time after such distribution,
shall be entitled to receive from the Company, such subsidiary or both, as the
Company shall determine, the stock or other securities to which such
Warrantholder would have been entitled if such Warrantholder had exercised this
Warrant immediately prior thereto, all subject to further adjustment, as
provided in this Article III, and the Company shall reserve, for the life of the
Warrant, such securities of such subsidiary or other corporation; provided,
however, that no adjustment in respect of dividends or interest on such stock or
other securities shall be made during the term of this Warrant or upon its
exercise.
(d) Whenever the Exercise Price payable upon exercise of each Warrant
is adjusted pursuant to one or more of paragraphs (a) and (b) of this Section
3.01, the Warrant Shares shall simultaneously be adjusted by multiplying the
number of Warrant Shares initially issuable upon exercise of each Warrant by the
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Exercise Price in effect on the date of such adjustment and dividing the product
so obtained by the Exercise Price, as adjusted.
(e) For the purpose of any computation under this Section 3.01, the
current market price per share of Common Stock at any date shall be deemed to be
the average of the daily closing prices for 20 consecutive trading days before
such date. The closing price for each day shall be the last sale price regular
way or, in case no such reported sales take place on such day, the average of
the last reported bid and asked prices regular way, in either case on the
principal national securities exchange on which the Common Stock is admitted to
trading or listed, or if not listed or admitted to trading on any such exchange,
the representative closing bid price as reported by Nasdaq National Market, or
other similar organization if Nasdaq National Market is no longer reporting such
information, or if not so available, the fair market price as determined by the
Board of Directors.
(f) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least five cents ($.05)
in such price; provided, however, that any adjustments which by reason of this
paragraph (f) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
3.01 shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be. Notwithstanding anything in this Section 3.01 to the
contrary, the Exercise Price shall not be reduced to less than the then existing
par value of the Common Stock as a result of any adjustment made hereunder.
(g) In the event that at any time, as a result of any adjustment made
pursuant to Section 3.01(a), the Warrantholder thereafter shall become entitled
to receive any shares of the Company other than Common Stock, thereafter the
number of such other shares so receivable upon exercise of any Warrant shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Stock
contained in Section 3.01(a).
Section 3.02: Notices of Adjustment. Whenever the number of Warrant
Shares or the Exercise Price is adjusted as herein provided the Company shall
prepare and deliver forthwith to the Warrantholder a certificate signed by its
President, and by any Vice President, Treasurer or Clerk setting forth the
adjusted number of shares purchasable upon the exercise of this Warrant and the
Exercise Price therefor after such adjustment setting forth a brief statement of
the facts requiring such adjustment and setting forth the computation by which
adjustment was made.
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Section 3.03: No Adjustment for Dividends. Except as provided in
Section 3.01 of this Agreement, no adjustment in respect of any cash dividends
shall be made during the term of this Warrant or upon the exercise of this
Warrant.
Section 3.04: Preservation of Purchase Rights in Certain Transactions.
In case of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock (other than a subdivision or combination of
the outstanding Common Stock and other than a change in the par value of the
Common Stock) or in case of any consolidation or merger of the Company with or
into another corporation (other than a merger with a subsidiary in which the
Company is the continuing corporation and that does not result in any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the class issuable upon exercise of this Warrant) or in case
of any sale, lease, transfer or conveyance to another corporation of the
property and assets of the Company as an entirety or substantially as an
entirety, the Company shall, as a condition precedent to such transaction cause
such successor or purchasing corporation, as the case may be, to execute with
the Warrantholder an agreement granting the Warrantholder the right thereafter,
upon payment of the Exercise Price in effect immediately prior to such action,
to receive upon exercise of this Warrant the kind and amount of shares and other
securities and property which he would have owned or have been entitled to
receive after the happening of such reclassification, change, consolidation,
merger, sale or conveyance had this Warrant been exercised immediately prior to
such action. Such agreement shall provide for adjustments in respect of such
shares of stock and other securities and property, which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
III. In the event that in connection with any such reclassification, capital
reorganization, change, consolidation, merger, sale or conveyance, additional
shares of Common Stock shall be issued in exchange, conversion, substitution or
payment, in whole or in part, for, or of, a security of the Company other than
Common Stock, any such issue shall be treated as an issue of Common Stock
covered by the provisions of Article III. The provisions of this Section 3.04
shall similarly apply to successive reclassification, capital reorganizations,
consolidations, mergers, sales or conveyances.
Section 3.05: Form of Warrant After Adjustments. The form of this
Warrant need not be changed because of any adjustments in the Exercise Price or
the number or kind of the Warrant Shares, and Warrants theretofore or thereafter
issued may continue to express the same price and number and kind of shares as
are stated in this Warrant, as initially issued.
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Section 3.06: Treatment of Warrantholder. Prior to due presentment for
registration of transfer of this Warrant, the Company may deem and treat the
Warrantholder as the absolute owner of this Warrant (notwithstanding any
notation of ownership or other writing hereon) for all purposes and shall not be
affected by any notice to the contrary.
ARTICLE IV
OTHER PROVISIONS RELATING TO RIGHTS OF WARRANTHOLDER
Section 4.01: No Rights as Shareholders; Notice to Warrantholders.
Nothing contained in this Warrant shall be construed as conferring upon the
Warrantholder or his or its transferee the right to vote or to receive dividends
or to consent or to receive notice as a shareholder in respect of any meeting of
shareholders for the election of directors of the Company or of any other
matter, or any rights whatsoever as shareholders of the Company. The Company
shall give notice to the Warrantholder by certified mail if at any time prior to
the expiration or exercise in full of the Warrants, any of the following events
shall occur:
(a) the Company shall authorize the payment of any dividend payable in
any securities upon shares of Common Stock or authorize the making of any
distribution (other than a cash dividend subject to the parenthetical set forth
in Section 3.01(b)) to all holders of Common Stock;
(b) the Company shall authorize the issuance to all holders of Common
Stock of any additional shares of Common Stock or Common Stock Equivalents or of
rights, options or warrants to subscribe for or purchase Common Stock or Common
Stock Equivalents or of any other subscription rights, options or warrants;
(c) a dissolution, liquidation or winding up of the Company shall be
proposed; or
(d) a capital reorganization or reclassification of the Common Stock
(other than a subdivision or combination of the outstanding Common Stock and
other than a change in the par value of the Common Stock) or any consolidation
or merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
that does not result in any reclassification or change of Common Stock
outstanding) or in the case of any sale or conveyance to another corporation of
the property of the Company as an entirety or substantially as an entity.
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Such giving of notice shall be initiated (i) at least ten Business Days
prior to the date fixed as a record date or effective date or the date of
closing of the Company's stock transfer books for the determination of the
shareholders entitled to such dividend, distribution or issuance, or for the
determination of the shareholders entitled to vote on such proposed merger,
consolidation, sale, conveyance, dissolution, liquidation or winding up. Such
notice shall specify such record date or the date of closing the stock transfer
books, as the case may be. Failure to provide such notice shall not affect the
validity of any action taken in connection with such dividend, distribution or
subscription rights, or proposed merger, consolidation, sale, conveyance,
dissolution, liquidation or winding up.
Section 4.02: Lost, Stolen, Mutilated or Destroyed Warrants. If this
Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms
as to indemnity or otherwise as it may in its discretion impose (which shall, in
the case of a mutilated Warrant, include the surrender thereof), issue a new
Warrant of like denomination and tenor as, and in substitution for, this
Warrant.
ARTICLE V
SPLIT-UP, COMBINATION
EXCHANGE AND TRANSFER OF WARRANTS
Section 5.01: Split-Up, Combination, Exchange and Transfer of Warrants.
Subject to the provisions of Section 5.02 hereof, this Warrant may be split up,
combined or exchanged for another Warrant or Warrants containing the same terms
to purchase a like aggregate number of Warrant Shares. If the Warrantholder
desires to split up, combine or exchange this Warrant, he or it shall make such
request in writing delivered to the Company and shall surrender to the Company
this Warrant and any other Warrants to be so split-up, combined or exchanged.
Upon any such surrender for a split-up, combination or exchange, the Company
shall execute and deliver to the person entitled thereto a Warrant or Warrants,
as the case may be, as so requested. The Company shall not be required to effect
any split-up, combination or exchange which will result in the issuance of a
Warrant entitling the Warrantholder to purchase upon exercise a fraction of a
Warrant Share or a fractional Warrant. The Company may require such
Warrantholder to pay a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any split-up, combination or exchange of
Warrants.
Section 5.02: Restrictions or Transfer. Neither this Warrant nor the
Warrant Shares may be sold, transferred, assigned or hypothecated (any such
action, a "Transfer") (i) except to
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Oppenheimer & Co., Inc., any affiliate of such company, any successor to the
business of such company, or any officer of such company, or (ii) to any
underwriter in connection with a Public Offering of the Common Stock, provided
(as to (ii)) that this Warrant is exercised upon such Transfer and the shares of
Common Stock issued upon such exercise are sold by such underwriter as part of
such Public Offering and, as to both (i) and (ii), only in accordance with and
subject to the provisions of the Securities Act and the rules and regulations
promulgated thereunder. If at the time of a Transfer, a Registration Statement
is not in effect to register this Warrant or the Warrant Shares, the Company may
require the Warrantholder to make such representations, and may place such
legends on certificates representing this Warrant, as may be reasonably required
in the opinion of counsel to the Company to permit a Transfer without such
registration, and may require the Warrantholder to obtain an opinion of counsel
that a proposed Transfer may be affected without registration under Federal and
state securities laws.
ARTICLE VI
Registration Under the Securities Act of 1933
Section 6.01: Piggyback Registration.
(a) Right to Include Registration. If at any time or from time to time
after __________ __, 1997 and prior to ___________ __, 2003, the Company
proposes to register any of its securities under the Securities Act on any form
for the registration of securities under such Act, whether or not for its own
account (other than by a registration statement on Form S-4 or Form S-8 or other
form which does not include substantially the same information as would be
required in a form for the general registration of securities or would not be
available for the Registrable Securities) (a "Piggyback Registration"), it shall
as expeditiously as possible give written notice to all Holders of its intention
to do so and of such Holders' rights under this Section 6.01. Such rights are
referred to hereinafter as "Piggyback Registration Rights." Upon the written
request of any such Holder made within 20 days after receipt of any such notice
(which request shall specify the Registrable Securities intended to be disposed
of by such Holder), the Company shall include in the Registration Statement the
Registrable Securities which the Company has been so requested to register by
the Holders thereof and the Company shall keep such registration statement in
effect and maintain compliance with each Federal and state law or regulation for
the period necessary for such Holder to effect the proposed sale or other
disposition (but in no event for a period greater than 120 days). The Company
shall be required to include
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Registrable Securities in a Piggyback Registration involving an underwritten
public offering on three occasions only.
(b) Withdrawal of Piggyback Registration by Company. If, at any time
after giving written notice of its intention to register any securities in a
Piggyback Registration but prior to the effective date of the related
Registration Statement, the Company shall determine for any reason not to
register such securities, the Company shall give written notice of such
determination to each Holder and, thereupon, shall be relieved of its obligation
to register any Registrable Securities in connection with such Piggyback
Registration. All best efforts obligations of the Company pursuant to Section
6.04 shall cease if the Company determines to terminate prior to such effective
date any registration where Registrable Securities are being registered pursuant
to this Section 6.01.
(c) Piggyback Registration of Underwritten Public Offerings. If a
Piggyback Registration involves an offering by or through one or more
underwriters, then, (i) all Holders requesting to have their Registrable
Securities included in the Company's Registration Statement must agree to sell
their Registrable Securities to the underwriters selected by the Company on the
same terms and conditions as apply to other selling shareholders and enter into
an underwriting agreement with such underwriters containing customary
representations and warranties and (ii) any Holder requesting to have his or its
Registrable Securities included in such Registration Statement may elect in
writing, not later than three Business Days prior to the effectiveness of the
Registration Statement filed in connection with such registration, not to have
his or its Registrable Securities so included in connection with such
registration.
(d) Payment of Registration Expenses for Piggyback Registration. The
Company shall pay all Registration Expenses in connection with each registration
of Registrable Securities requested pursuant to a Piggyback Registration Rights
contained in this Section 6.01, unless otherwise required by law.
(e) Priority in Piggyback Registration. If a Piggyback Registration
involves an offering by or through one or more underwriters, the Company shall
not be required to include Registrable Securities therein if and to the extent
the underwriter managing the offering reasonably believes in good faith and
advises the Company (which in turn advises each Holder requesting to have
Registrable Securities included in the Company's Registration Statement) that
such inclusion would materially adversely affect such offering; provided that
(i) if other selling shareholders who are employees, officers, directors
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or other affiliates of the Company have requested registration of securities in
the proposed offering, the Company will reduce or eliminate such other selling
shareholders' securities before any reduction or elimination of Registrable
Securities; (ii) subject to the rights of any holder of the Company's Common
Stock in effect prior to the date hereof, any such reduction or elimination
(after taking into account the effect of clause (i)) shall be pro rata to all
other holders of the securities of the Company exercising "piggyback
registration rights" similar to those set forth herein in proportion to the
respective number of shares they have requested to be registered, and (iii) in
such event, such Holders may delay any offering by them of all Registrable
Shares requested to be included or that portion of such Registrable Shares
eliminated for such period, not to exceed 90 days, as the managing underwriter
shall request and the Company shall file such supplements and post-effective
amendments and take such other action necessary under Federal and state law or
regulation as may be necessary to permit such Holders to make their proposed
offering for a period of 120 days following such period of delay.
Section 6.02: Demand Registration.
(a) Request for Registration. If, at any time subsequent to _________
__, 1997 and prior to ___________ __, 2001, any 25% Holders request that the
Company file a registration statement under the Securities Act, the Company as
soon as reasonably practicable shall use its best efforts to file a registration
statement with respect to all Registrable Securities that it has been so
requested to include and obtain the effectiveness thereof, and the Company shall
take all other action necessary under any Federal or state law or regulation to
permit the Registrable Securities that are then held and/or that may be acquired
upon the exercise of the Warrants specified in the notices of the Holder or
holders thereof to be sold or otherwise disposed of, and the Company shall
maintain such compliance with each such Federal and state law and regulation for
the period necessary for such Holders or holders to effect the proposed sale or
other disposition (but in no event for more than 120 days); provided, however,
the Company shall be entitled to defer such registration for a period of up to
90 days if and to the extent that its Board of Directors shall determine that
such registration would interfere with a pending corporate transaction. The
Company shall also promptly give written notice to the Holders and the Holders
of any other Warrants and/or the Holders of any Registrable Securities who or
that have not made a request to the Company pursuant to the provisions of this
subsection (a) of its intention to effect any required registration or
qualification, and shall use its best efforts to effect as expeditiously as
possible such registration or qualification of all other such Registrable
Securities that are then held and/or that may be acquired upon the exercise of
the
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Warrants, the Holders or holders of which have requested such registration or
qualification, within 15 days after such notice has been given by the Company,
as provided in the preceding sentence. The Company shall be required to effect a
registration or qualification pursuant to this subsection (a) on one occasion
only.
(b) Payment of Registration Expenses for Demand Registration. The
Company shall pay all Registration Expenses in connection with the Demand
Registration, except as otherwise required by law.
(c) Selection of Underwriters. If any Demand Registration is requested
to be in the form of an underwritten offering, the managing underwriter shall be
Oppenheimer & Co., Inc. and the co-managing (if any) and the independent pricer
required under the rules of the NASD (if any) shall be selected and obtained by
the Holders of a majority of the Registrable Securities to be registered. Such
selection shall be subject to the Company's consent, which consent shall not be
unreasonably withheld. All fees and expenses (other than Registration Expenses
otherwise required to be paid) of any managing underwriter, any co-manager or
any independent underwriter or other independent pricer required under the rules
of the NASD shall be paid for by such underwriters or by the Holders or holders
whose shares are being registered. If Oppenheimer & Co., Inc. should decline to
serve as managing underwriter, the Holders of a majority of the Registrable
Securities to be registered may select and obtain one or more managing
underwriters. Such selection shall be subject to the Company's consent, which
consent shall not be unreasonably withheld.
(d) 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 allow such holder or prospective holder to
include such securities in any registration filed under Section 6.02(a) hereof.
Section 6.03: Buy-outs of Registration Demand. In lieu of carrying out
its obligations to effect a Piggyback Registration or Demand Registration of any
Registrable Securities pursuant to this Article VI, the Company may carry out
such obligation by offering to purchase and purchasing such Registrable
Securities requested to be registered at an amount in cash equal to the
difference between (a) the last sale price of the Common Stock on the day the
request for registration is made and (b) the Exercise Price in effect on such
day.
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Section 6.04: Registration Procedures. If and whenever the Company is
required to use its best efforts to take action pursuant to any Federal or state
law or regulation to permit the sale or other disposition of any Warrant Shares
that are then held or that may be acquired upon exercise of the Warrants in
order to effect or cause the registration of any Registrable Securities under
the Securities Act as provided in this Article VI, the Company shall, as
expeditiously as practicable:
(a) furnish to each selling Holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the Registration
Statement, the Prospectus or the Prospectuses (including each preliminary
prospectus) and any amendment or supplement thereto as they may reasonably
request;
(b) enter into such agreements (including an underwriting agreement)
and take all such other actions reasonably required in connection therewith in
order to expedite or facilitate the disposition of such Registrable Securities
and in such connection, if the registration is in connection with an
underwritten offering (i) make such representations and warranties to the
underwriters in such form, substance and scope as are customarily made by
issuers to underwriters in similar underwritten offerings and confirm the same
if and when requested; (ii) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions in form, scope and substance shall
be reasonably satisfactory to the underwriters) addressed to the underwriters
and the Holders covering the matters customarily covered in opinions requested
in similar underwritten offerings and such other matters as may be reasonably
requested by such underwriters; (iii) obtain "cold comfort" letters and updates
thereof from the Company's accountants addressed to the underwriters, such
letters to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters by underwriters in connection with similar
underwritten offerings; (iv) set forth in full in any underwriting agreement
entered into the indemnification provisions and procedures of Section 6.05
hereof with respect to all parties to be indemnified pursuant to said Section;
and (v) deliver such documents and certificates as may be reasonably requested
by the underwriters to evidence compliance with clause (i) above and with any
customary conditions contained in the underwriting agreement or other agreement
entered into by the Company; the above shall be done at each closing under such
underwriting or similar agreement or as and to the extent required thereunder;
(c) make available for inspection by one or more representatives of the
Holders of Registrable Securities being sold, any underwriter participating in
any disposition pursuant to such registration, and any attorney or accountant
retained by such
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Holders or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such representatives, in connection with such;
(d) otherwise use its best efforts to comply with all applicable
Federal and state regulations; and take such other action as may be reasonably
necessary or advisable to enable each such Holder and each such underwriter to
consummate the sale or disposition in such jurisdiction or jurisdictions in
which any such Holder or underwriter shall have requested that the Registrable
Securities be sold.
Each seller of Registrable Securities as to which any registration is
being effected shall furnish to the Company such information regarding the
distribution of such securities and such other information as may otherwise be
required by the Securities Act to be included in such Registration Statement.
Section 6.05: Indemnification.
(a) Indemnification by Company. In connection with each Registration
Statement relating to disposition of Registrable Securities, the Company shall
indemnify and hold harmless each Holder and the underwriter, if Oppenheimer &
Co., Inc., of Registrable Securities and each Person, if any, who controls such
Holder or underwriter (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation, legal and
other expenses incurred in connection with, and any amount paid in settlement of
any action, suit or proceeding or any claim asserted), to which they, or any of
them, may become subject under the Securities Act, the Exchange Act or other
Federal or state law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus or any amendment
thereof or supplement thereto, or arise out of or are based upon any 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 under
which they were made not misleading; provided, however, that such indemnity
shall not inure to the benefit of any Holder or underwriter (or any Person
controlling such Holder or underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) on account of any losses,
claims, damages or liabilities arising from the sale of the Registrable
Securities if such untrue statement or omission or alleged untrue
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statement or omission was made in such Registration Statement, Prospectus or
preliminary prospectus, or such amendment or supplement, in reliance upon and in
conformity with information furnished in writing to the Company by the Holder or
underwriter specifically for use therein or such Holder's or underwriter's
failure to provide information required to be included therein. This indemnity
agreement shall be in addition to any liability which the Company may otherwise
have.
(b) Indemnification by Holder. In connection with each Registration
Statement, each Holder shall indemnify, to the same extent as the
indemnification provided by the Company in Section 6.05(a), the Company, its
directors and each officer who signs the Registration Statement and each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), but only insofar as such losses, claims,
damages and liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in the
Registration Statement, the Prospectus or preliminary prospectus or any
amendment thereof or supplement thereto, in reliance upon and in conformity with
information furnished in writing by such Holder to the Company specifically for
use therein or such Holder's failure to provide information required to be
included therein. In no event shall the liability of any selling Holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Procedure. Any party that proposes to
assert the right to be indemnified hereunder will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or parties
under this Section, notify each such indemnifying party of the commencement of
such action, suit or proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 6.05(a) or 6.05(b) shall be available to
any party who shall fail to give notice as provided in this Section 6.05(c) if
the party to whom notice was not given was unaware of the proceeding to which
such notice would have related and was prejudiced by the failure to give such
notice but the omission so to notify such indemnifying party of any such action,
suit or proceeding shall not relieve it from any liability that it may have to
any indemnified party for contribution or otherwise than under this Section. In
case any such action, suit or proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate in, and, to the
extent that it shall wish, jointly with any other indemnifying party similarly
notified, to assume
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the defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and the approval by the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and the approval by the indemnified party of such counsel, the indemnifying
party shall not be liable to such indemnified party for any legal or other
expenses, except as provided below and except for the reasonable costs of
investigation subsequently incurred by such indemnified party in connection with
the defense thereof. The indemnified party shall have the right to employ its
counsel in any such action, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the employment of counsel by
such indemnified party has been authorized in writing by the indemnifying
parties, (ii) the indemnified party shall have reasonably concluded that there
may be a conflict of interest between the indemnifying parties and the
indemnified party in the conduct of the defense of such action (in which case
the indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party) or (iii) the indemnifying parties
shall not have employed counsel to assume the defense of such action within a
reasonable time after notice of the commencement thereof, in each of which cases
the fees and expenses of counsel shall be at the expense of the indemnifying
parties. An indemnifying party shall not be liable for any settlement of any
action, suit, proceeding or claim effected without its written consent.
(d) Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
subsection (a) or (b) is due in accordance with its terms but for any reason is
held to be unavailable to an indemnified party thereunder in respect of any
losses, claims, damages and liabilities referred to therein, then the
indemnifying party 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 to which such party may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Holders on the other from the
offering of the Registrable Securities or, if such allocation is not permitted
by applicable law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in Section 6.05(c)
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company on the one
hand and the Holders on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
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Company and the Holders shall be deemed to be in such proportions so that (i)
the Holders are responsible for that portion represented by the percentage of
the total net proceeds from the offering of Registrable Securities received by
the Holders and (ii) the Company is responsible for the remaining portion. The
relative fault of the Company and the Holders shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact related to information supplied by the Company or the Holders and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the Holders
agree that it would not be just and equitable if contribution pursuant to this
Section 6.05 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this Section 6.05, (i) in no case
shall any one Holder be liable or responsible for any amount in excess of the
net proceeds received by such Holder from the offering of Registrable Securities
and (ii) the Company shall be liable and responsible for any amount in excess of
such proceeds; provided, however, that 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. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section, notify such party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties from whom contribution may be sought shall not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have hereunder or otherwise then under this Section. No party
shall be liable for contribution with respect to any action, suit, proceeding or
claim settled without its written consent.
(e) Specific Performance. The Company and the Warrantholder acknowledge
that remedies at law for the enforcement of this Section 6.05 may be inadequate
and intend that this Section 6.05 shall be specifically enforceable.
ARTICLE VII
OTHER MATTERS
Section 7.01: Amendments and Waivers. The provisions of this Warrant,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to
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departures from the provisions hereof may not be given unless the Company has
obtained the written consent of Holders of at least a majority of the
outstanding Registrable Securities. Holders shall be bound by any consent
authorized by this Section whether or not certificates representing such
Registrable Securities have been marked to indicate such consent.
Section 7.02: Counterparts. This Warrant may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
Section 7.03: Computations of Consent. Whenever the consent or approval
of Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its affiliates (other
than the Warrantholder or subsequent Holders if they are deemed to be such
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
Section 7.04: Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York.
Section 7.05: Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect, and of the
remaining provisions contained herein, shall not be affected or impaired
thereby.
Section 7.06: Attorneys' Fees. In any action or proceeding brought to
enforce any provisions of this Warrant, or where any provision hereof is validly
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees and disbursements in addition to its costs and
expenses and any other available remedy.
Section 7.07: Notice. Any notices or certificates by the Company to the
Warrantholder and by the Warrantholder to the Company shall be deemed delivered
if in writing and delivered in person or by registered mail (return receipt
requested) as follows: if to the Warrantholder, addressed to him or it in care
of Oppenheimer & Co., Inc., Oppenheimer Tower, World Financial Center, New York,
New York 10281, Attention: Peter J. Crowley or, if the Warrantholder has
designated by notice in writing to the Company, any other address, to such other
address; and if to the
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Company, addressed to it at Genome Therapeutics Corp., 100 Beaver Street,
Waltham, Massachusetts 02154, Attention: President. The Company may change its
address by written notice to the Warrantholder and the Warrantholder may change
its address by written notice to the Company.
IN WITNESS WHEREOF, this Warrant has been duly executed by the Company
under its corporate seal as of the ___th day of _________ 1996.
GENOME THERAPEUTICS CORP.
By:___________________________
Name: Robert J. Hennessey
Title: President
Attest:___________________________
Treasurer
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ANNEX A
SUBSCRIPTION FORM
(To be executed upon exercise of
Warrant pursuant to Section 2.02(a)
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, ______ shares of Common Stock, as provided for therein, and tenders
herewith payment of the purchase price in full in the form of cash or a
certified or official bank check in the amount of $_________.
Please issue a certificate or certificates for such Common Stock in the
name of, and pay any cash for any fractional share to:
Name:_________________________________
(Please Print Name,
Address and Social
Security Number)
Signature:____________________________
NOTE: The above signature
should correspond exactly
with the name on the first
page of this Warrant
Certificate or with the
name of the assignee
appearing in the
Assignment attached
hereto.
And if said number of shares shall not be all the shares purchasable
under the within Warrant Certificate, a new Warrant Certificate is to be issued
in the name of said undersigned for the balance remaining of the shares
purchasable thereunder rounded up to the next higher number of shares.
24
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, _____________________ hereby sells, assigns and
transfers unto ___________________ the within Warrant Certificate, together with
all right, title and interest therein, and does hereby irrevocably constitute
and appoint __________________ attorney to transfer said Warrant Certificate on
the books of the within-named Company with respect to the number of Warrants set
forth below, with full power of substitution in the premises:
Name(s) of
Assignee(s) Address No. of Warrants
----------- ------- ---------------
And if said number of Warrants shall not be all the Warrants
represented by the Warrant Certificate, a new Warrant Certificate is to be
issued in the name of said undersigned for the balance remaining of the Warrants
represented by said Warrant Certificate.
Dated: _______________________, 19____
____________________________________
Note: The above signature should
correspond exactly with the
name on the face of this
Warrant Certificate.