REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of June
9, 1997 by and among Celgene Corporation, a Delaware corporation, with
headquarters located at 7 Powder Horn Drive, Warren, NJ 07059 (the "Company"),
and each of the undersigned (together with their respective affiliates and any
assignee or transferee of all of their respective rights hereunder, the
"Investors").
W I T N E S S E T H
WHEREAS, in connection with the Securities Purchase Agreement by and
among the parties hereto of even date herewith (the "Securities Purchase
Agreement"), the Company has agreed, upon the terms and subject to the
conditions contained therein, to issue and sell to the Investors shares of its
Series B Convertible Preferred Stock (the "Preferred Stock") that are
convertible into shares (the "Conversion Shares") of the Company's common
stock, par value $.01 per share (the "Common Stock"), upon the terms and
subject to the limitations and conditions set forth in the Certificate of
Designation with respect to such Preferred Stock (the "Certificate of
Designation"); and
WHEREAS, the Company has agreed, upon the terms and subject to the
conditions contained in the Securities Purchase Agreement, to issue to the
Investors warrants (the "Warrants") that are exercisable for shares (the
"Warrant Shares") of Common Stock; and
WHEREAS, to induce the Investors to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar successor statute
(collectively, the "Securities Act"), and applicable state securities laws;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Investors hereby agree as follows:
1. DEFINITIONS.
a. As used in this Agreement, the following terms shall have the
following meanings:
(i) "register," "registered," and "registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with
the Securities Act and pursuant to Rule 415 under the Securities Act or any
successor rule providing for offering securities on a continuous basis ("Rule
415"), and the declaration or ordering of effectiveness of such Registration
Statement by the United States Securities and Exchange Commission (the "SEC").
(ii) "Registrable Securities" means the Conversion Shares and
the Warrant Shares issued or issuable, and any shares of capital stock issued
or issuable as a dividend on or in exchange for or otherwise with respect to
any of the foregoing.
(iii) "Registration Statement" means a registration statement
of the Company under the Securities Act.
b. Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Securities Purchase
Agreement.
2. REGISTRATION.
a. Mandatory Registration. The Company shall prepare, and, (i)
on or prior to the date which is thirty (30) days after the date of the First
Closing, (ii) during the ten-day period ending after each of the Second, Third
and Fourth Closings, all as defined in the Securities Purchase Agreement (a
"Closing Date"), and June 1, 1998, and (iii) upon the request of Investors
owning more than 51% of the then outstanding shares of Preferred Stock, on or
prior to up to the date that is ten days after the receipt by the Company of
such a request ("Request Date") (any such filing deadline being hereinafter
referred to as a "Filing Deadline"), file with the SEC a Registration Statement,
on such form of Registration Statement as is then available to effect a
registration of the Registrable Securities, covering the resale of the
Registrable Securities underlying the securities issued at the Closing, on or
prior to the Request Date, on June 1, 1998 or otherwise issued pursuant to the
Securities Purchase Agreement, in each case, to the extent not theretofore
covered by a Registration Statement. Any Registration Statement filed pursuant
hereto, to the extent allowable under the Securities Act and the Rules
promulgated thereunder (including but not limited to Rule 416), shall state that
such Registration Statement also covers such indeterminate number of additional
shares of Common Stock as may become issuable upon conversion of the Preferred
Stock or upon exercise of the Warrants to prevent dilution resulting from stock
splits, stock dividends recapitalizations, reclassifications, distributions,
consolidations, mergers or similar transactions. The number of shares of Common
Stock initially included in each Registration Statement shall equal the maximum
number of Conversion Shares and Warrant Shares issuable upon conversion of all
shares of Preferred Stock and exercise of all Warrants issued or issuable in
respect of the Closing.
b. Underwritten Offering. If any offering pursuant to a
Registration Statement pursuant to Section 2.a. hereof involves an
underwritten offering, the Investors who hold a majority in interest of the
Registrable Securities subject to such underwritten
2
offering shall have the right to select legal counsel and an investment banker
or bankers and manager or managers to administer the offering, which investment
banker or bankers or manager or managers shall be reasonably satisfactory to the
Company.
c. Payments by the Company. The Company shall use its best
efforts to obtain effectiveness of each Registration Statement as soon as
practicable. If, except as provided in Section 2.d., (i) any Registration
Statement(s) covering Registrable Securities required to be filed by the
Company pursuant to Section 2.a. hereof is not declared effective by the SEC
within one hundred thirty-five (135) days after the Closing Date (other than
by reason of delay caused by (a) a change in a relevant policy, procedure,
interpretation, position, practice or rule of the SEC announced after the
Closing Date, or (b) any act or failure to act by the Investors) or if, after
the Registration Statement has been declared effective by the SEC, sales
cannot be made pursuant to the Registration Statement (by reason of stop
order, the Company's failure to update the Registration Statement or any other
reason), then the Company will make payments to the Investors in such amounts
and at such times as shall be determined pursuant to this Section 2.c. as
relief for the damages to the Investors by reason of any such delay in or
reduction of their ability to sell the Registrable Securities. The Company
shall pay to each holder of Registrable Securities an amount equal to the
aggregate "Purchase Price" (as defined below) of the Preferred Stock then held
by such Investors (the "Aggregate Share Price") multiplied by two thousandths
(.0020) times the sum of: (i) the number of months (prorated for partial
months) after the end of such 135-day period and prior to the date the
Registration Statement is declared effective by the SEC, provided, however,
that there shall be excluded from such period any delays which are solely
attributable to changes required by the Investors in the Registration
Statement with respect to information relating to the Investors, including,
without limitation, changes to the plan of distribution, or to the failure of
the Investors to conduct their review of the registration statement pursuant
to Section 3.h. below in a reasonably prompt manner; and (ii) the number of
months (prorated for partial months) that sales cannot be made pursuant to the
Registration Statement after the Registration Statement has been declared
effective; such amounts shall be paid in cash. Payments pursuant hereto shall
be made within five (5) days after the end of each period that gives rise to
such obligation, provided that, if any such period extends for more than
thirty (30) days, interim payments shall be made for each such thirty (30) day
period. The term "Purchase Price" means the purchase price paid by the
Investors for the Preferred Stock.
d. Delay Periods; Suspension of Sales.
(i) If at any time prior to the expiration of the Registration
Period (as defined in Section 3.a.), counsel to the Company has determined in
good faith that it is reasonable to conclude that the filing of the
Registration Statement or the compliance by the Company with its disclosure
obligations in connection with the Registration Statement may require the
disclosure of information which the Board of Directors of the Company has
identified as material and which the Board of Directors has determined that
the Company has
3
a bona fide business purpose for preserving as confidential, then the Company
may delay the filing or the effectiveness of the Registration Statement (if not
then filed or effective, as applicable) and shall not be required to maintain
the effectiveness thereof or amend or supplement the Registration Statement and
no payments specified in Section 2.c. shall accrue for a period (a "Delay
Period") expiring after the earlier to occur of (A) the date which is three
business days after such material information is disclosed to the public or
ceases to be material or the Company is able to so comply with its disclosure
obligations and Commission requirements or (B) 45 days after the date which
commences any period that ends on a Filing Deadline. There shall not be more
than three Delay Periods during the Registration Period, and there shall not be
two Delay Periods during any period of 135 consecutive days.
(ii) The Company will give prompt written notice thereof to
each Investor of each Delay Period. Such notice shall be given as soon as
practicable after the Board of Directors makes the determination referenced in
Section 2.d.(i). Such notice shall state to the extent, if any, as is
practicable, an estimate of the duration of such Delay Period. Each Investor,
by his acceptance of any Registrable Securities, agrees that (i) upon receipt
of such notice of a Delay Period it will forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement, and will not
deliver any prospectus forming a part of the Registration Statement in
connection with any sale of Registrable Securities until the expiration of
such Delay Period.
(iii) In the event that the Company does not file a
Registration Statement as required by Section 2.a. within the period
specified, then the Conversion Price for all Preferred Stock may be reset, in
accordance with Section 5(a) of the Certificate of Designation.
3. OBLIGATIONS OF THE COMPANY.
In connection with the registration of the Registrable Securities,
the Company shall have the following obligations:
a. The Company shall prepare promptly, and file with the SEC,
within the time periods provided for in Section 2.a hereof, a Registration
Statement, and thereafter use its best efforts to cause such Registration
Statement to become effective as soon as possible after such filing, and keep
the Registration Statement effective pursuant to Rule 415 at all times until
such date as is the earlier of (i) the date on which all of the Registrable
Securities registered thereby have been sold and (ii) the date on which all of
the Registrable Securities registered thereby (in the opinion of counsel to the
Company) may be immediately sold without registration or other legal restriction
(the "Registration Period"). Each such Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein not
misleading.
4
b. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration Statement
effective at all times during the Registration Period, and, during such
period, comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities of the Company covered by the
Registration Statement until such time as all of such Registrable Securities
have been disposed of in accordance with the intended methods of disposition
by the seller or sellers thereof as set forth in the Registration Statement.
c. The Company shall furnish to each Investor whose Registrable
Securities are included in the Registration Statement and its legal counsel
such number of copies of a prospectus, including a preliminary prospectus, and
all amendments and supplements thereto and such other related documents as
such Investor may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such Investor.
d. The Company shall use reasonable efforts to (i) register and
qualify the Registrable Securities covered by each Registration Statement
under such other securities or "blue sky" laws of such jurisdictions in the
United States as the Investors who hold a majority in interest of the
Registrable Securities being offered reasonably request, (ii) prepare and file
in those jurisdictions such amendments (including post-effective amendments)
and supplements to such registrations and qualifications as may be necessary
to maintain the effectiveness thereof during the Registration Period, (iii)
take such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (a) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3.d., (b) subject itself
to general taxation in any such jurisdiction, (c) file a general consent to
service of process in any such jurisdiction, (d) provide any undertakings that
cause the Company undue expense or burden, or (e) make any change in its
certificate of incorporation or bylaws, which in each case the Board of
Directors of the Company determines to be contrary to the best interests of
the Company and its stockholders.
e. In the event Investors who hold a majority in interest of the
Registrable Securities being offered in an offering being registered pursuant
to Section 2.a. hereof select underwriters for the offering, the Company shall
enter into and perform its obligations under an underwriting agreement, in
usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the underwriters of such
offering.
5
f. As promptly as practicable after becoming aware of such event,
the Company shall notify each Investor of the happening of any event, of which
the Company has knowledge, as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and use
its best efforts promptly to prepare a supplement or amendment to the
Registration Statement to correct such untrue statement or omission, and
deliver such number of copies of such supplement or amendment to each Investor
as such Investor may reasonably request.
g. The Company shall use its best efforts to prevent the issuance
of any stop order or other suspension of effectiveness of a Registration
Statement, and, if such an order is issued, to obtain the withdrawal of such
order at the earliest possible moment and to notify each Investor who holds
Registrable Securities being sold (or, in the event of an underwritten
offering, the managing underwriters) of the issuance of such order and the
resolution thereof.
h. The Company shall permit a single firm of counsel designated
by the Investors to review each Registration Statement and all amendments and
supplements thereto (as well as all requests for acceleration or effectiveness
thereof) a reasonable period of time prior to their filing with the SEC.
i. The Company shall make generally available to its security
holders as soon as practicable, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the Securities Act) covering a
twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the effective date of a Registration Statement.
j. At the request of any Investor, the Company shall furnish, in
connection with any underwritten offering on the date that Registrable
Securities are delivered to the underwriter for sale in connection with a
Registration Statement on the date of effectiveness thereof (i) an opinion,
dated as of such date, from counsel representing the Company for purposes of
such Registration Statement, in form, scope and substance as is customarily
given in an underwritten public offering, addressed to the underwriters, and
(ii) a letter, dated such date, from the Company's independent certified
public accountants in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters.
k. The Company shall make available for inspection by (i) any
Investor, (ii) any underwriter participating in any disposition pursuant to a
Registration Statement, (iii) one firm of attorneys and one firm of
accountants or other agents retained by the Investors, and (iv) one firm of
attorneys retained by all such underwriters (collectively, the "Inspectors")
all pertinent financial and other records, and pertinent corporate documents
and properties of the Company (collectively, the "Records"), as shall be
reasonably deemed necessary by
6
each Inspector to enable each Inspector to exercise its due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information which any Inspector may reasonably request for purposes
of such due diligence; provided, however, that each Inspector shall hold in
confidence and shall not make any disclosure (except to the Inspectors) of any
Record or other information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified,
unless (a) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (b) the release of
such Records is ordered pursuant to a subpoena or other order from a court or
government body of competent jurisdiction, or (c) the information in such
Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement. The Company shall not
be required to disclose any confidential information in such Records to any
Inspector until and unless such Inspector shall have entered into
confidentiality agreements (in form and substance satisfactory to the Company)
with the Company with respect thereto, substantially in the form of this
Section 3.k. Each Investor agrees that upon learning that the release of such
Records is ordered pursuant to a subpoena or other order from a court or
government body of competent jurisdiction, it shall give prompt notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the Records
deemed confidential. Nothing herein shall be deemed to limit the Investor's
ability to sell Registrable Securities in a manner which is otherwise
consistent with applicable laws and regulations.
l. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company
unless (i) disclosure of such information is necessary to comply with federal
or state securities laws, (ii) the disclosure of such information is necessary
to avoid or correct a misstatement or omission in any Registration Statement,
(iii) the release of such information is ordered pursuant to a subpoena or
other order from a court or governmental body of competent jurisdiction, or
(iv) such information has been made generally available to the public other
than by disclosure in violation of this or any other agreement. The Company
agrees that it shall, upon learning that disclosure of such information
concerning an Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to such
Investor prior to making such disclosure, and allow the Investor, at its
expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, such information.
m. The Company shall use its best efforts either to (i) cause all
the Registrable Securities covered by the Registration Statement to be listed
on each national securities exchange on which securities of the same class or
series issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange, or
(ii) secure the designation and quotation of all the Registrable Securities
covered by the Registration Statement on the Nasdaq-NMS or, if not eligible
for the Nasdaq-NMS,on the Nasdaq Small Cap.
7
n. The Company shall cooperate with the Investors who hold
Registrable Securities being offered and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be offered pursuant to the
Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the managing underwriter or
underwriters, if any, or the Investors may reasonably request and registered
in such names as the managing underwriter or underwriters, if any, or the
Investors may request, and, within three (3) business days after a
Registration Statement which includes Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
selected by the Company to deliver, to the transfer agent for the Registrable
Securities an opinion of such counsel regarding the transferability of the
Registrable Securities.
o. The Company shall take all other reasonable actions necessary
to expedite and facilitate disposition by the Investors of Registrable
Securities pursuant to the Registration Statement.
4. OBLIGATIONS OF THE INVESTORS.
In connection with the registration of the Registrable Securities,
the Investors shall have the following obligations:
a. It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of a particular Investor that such Investor
shall furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of
the Registrable Securities held by it as shall be reasonably required to
effect the registration of such Registrable Securities and shall execute such
documents in connection with such registration as the Company may reasonably
request. At least ten (10) business days prior to the first anticipated filing
date of the Registration Statement, the Company shall notify each Investor of
the information the Company requires from each such Investor if such Investor.
b. Each Investor, by such Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder, unless such Investor has notified the
Company in writing of such Investor's election to exclude all of such
Investor's Registrable Securities from the Registration Statement.
c. In the event Investors holding a majority in interest of the
Registrable Securities being registered determine to engage the services of an
underwriter, each Investor agrees to enter into and perform such Investor's
obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering and take such other
8
actions as are reasonably required in order to expedite or facilitate the
disposition of the Registrable Securities, unless such Investor has notified
the Company in writing of such Investor's election to exclude all of such
Investor's Registrable Securities from the Registration Statement.
d. Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3.f. or
3.g., such Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities, until such Investor's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 3.f. or 3.g., and, if so directed
by the Company, such Investor shall deliver to the Company (at the expense of
the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in such Investor's possession of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice.
e. No Investor may participate in any underwritten registration
hereunder unless such Investor (i) agrees to sell such Investor's Registrable
Securities on the basis provided in any underwriting arrangements in usual and
customary form, (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements, and (iii) agrees
to pay its pro rata share of all underwriting discounts and commissions and
any expenses in excess of those payable by the Company pursuant to Section 5
below.
5. EXPENSES OF REGISTRATION.
All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation,
all registration, listing and qualifications fees, printers fees, the fees and
disbursements of counsel and accountants for the Company and the fees and
disbursements of one firm of attorneys and one firm of accountants retained by
the Investors shall be borne by the Company.
6. INDEMNIFICATION AND CONTRIBUTION.
a. Indemnification by Company. In the event of any registration
of any Registrable Securities under the Securities Act pursuant to this
Agreement, the Company shall indemnify and hold harmless each Investor, such
Investor's directors and officers, and each other Person (including each
underwriter) who participated in the offering of such Registrable Securities
and each other Person, if any, who controls such Investor or such
participating Person within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which such
Investor or any such director or officer or participating Person or
controlling Person may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or
liabilities (or
9
actions in respect thereof) arise out of or are based upon (i) any alleged
untrue statement of any material fact contained in any Registration Statement
under which such Registrable Securities were registered under the Securities
Act, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or (ii) any alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse Investor or such director, officer
or participating Person or controlling Person for any legal or any other
expenses reasonably incurred by Investor or such director, officer or
participating Person or controlling Person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any alleged
untrue statement or alleged omission made in such Registration Statement,
preliminary prospectus, prospectus or amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Investor specifically for use therein, and provided further, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon the failure of such Investor
to deliver a prospectus in compliance with applicable securities law or the
failure of such Investor to comply with Section 4.d. hereof. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Investor or such director, officer or participating Person or
controlling Person, and shall survive the transfer of such securities by
Investor.
b. Indemnification by Investor. In the event of any registration
of any Registrable Securities under the Securities Act pursuant to this
Agreement, each Investor severally and not jointly shall indemnify and hold
harmless the Company, its directors and officers, and each other Person
(including each underwriter) who participated in the offering of such
Registrable Securities and each other Person, if any, who controls the Company
or such participating Person within the meaning of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which the
Company or any such director or officer or participating Person or controlling
Person may become subject under the Securities Act or any other statute or at
common law, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any alleged untrue
statement of any material fact contained in any Registration Statement under
which such securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, where such statement is in conformity with written
information provided by such Investor expressly for use therein, or where such
losses, claims, damages or liability arise out of or are based upon the
failure of an Investor to deliver a prospectus in compliance with applicable
securities law or the failure of such Investor to comply with Section 4.d.
hereof, and, in any such case, the Investor shall reimburse the Company or
such director, officer or participating Person or controlling Person for any
legal or any other expenses reasonably incurred by the Company or such
director, officer or participating Person or controlling Person in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that no Investor shall be liable for
10
any amounts in excess of the net proceeds received by such Investor for the sale
of its Registrable Securities. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Company or
such director, officer or participating Person or controlling Person, and shall
survive the transfer of such securities by such Investor.
c. Contribution. If the indemnification provided for in this
Section 6 is unavailable to an indemnified party hereunder in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party
in connection with any investigation or proceeding. Notwithstanding anything
else in this paragraph (c), no Investor shall be liable for any amounts in
excess of the net proceeds received by such Investor for the sale of its
Registrable Securities.
d. Equitable Considerations. The parties hereto agree that it
would not be just and equitable if contribution pursuant to this Section 6
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
immediately preceding paragraph. 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 also guilty of
such fraudulent misrepresentation.
7. REPORTS UNDER THE EXCHANGE ACT.
With a view to making available to the Investors the benefits of
Rule 144 promulgated under the Securities Act or any other similar rule or
regulation of the SEC that may at any time permit the investors to sell
securities of the Company to the public without registration ("Rule 144"), the
Company agrees to:
a. make and keep public information available, as those terms are
understood and defined in Rule 144; and
11
b. file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act so long as the Company remains subject to such requirements and the filing
of such reports and other documents is required for the applicable provisions
of Rule 144.
8. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with written consent of the Company and
Investors who hold a majority interest of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 8 shall be binding
upon each Investor and the Company.
9. MARKET STAND-OFF AGREEMENT.
Notwithstanding any other provision of this Agreement, each Investor
severally agrees that it will not sell any Conversion Shares or Warrant Shares
during any "Lock-Up Period. This restriction shall apply during the following
Lock-Up Periods: Commencing on any date specified by the Company (the
"Commencement Date") following the filing by the Company of a preliminary
registration statement for a registered public offering managed by nationally
recognized underwriters and ending (A) 30 days after the Commencement Date if
the registration statement is not declared effective by the SEC on or prior to
such 30th day, or (B) if the registration statement is declared effective by
the SEC on, or within thirty days after the Commencement Date, a period not to
exceed 90 days following the Effective Date of the registration statement, if
required by the underwriters of the public offering.
10. MISCELLANEOUS.
a. A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
b. Notices required or permitted to be given hereunder shall be
sent by certified or registered mail (return receipt requested), facsimile, or
delivered personally or by courier and shall be effective upon receipt. Each
party shall provide notice to the other party of any change in address. The
addresses for such communications shall be:
if to the Company:
12
Celgene Corporation
7 Powder Horn Drive
Warren, New Jersey
Attention: Chief Executive Officer
Telecopy: (908) 271-1001
With copy to:
Arnold S. Jacobs, Esq.
Proskauer Rose LLP
1585 Broadway
New York, New York 10036-8299
Telecopy: (212) 969-2900
and if to any Investor, at such address as such Investor shall have provided in
writing to the Company, or at such other address as each such party furnishes by
notice given in accordance with this Section 10(b), and shall be effective upon
receipt.
c. Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
d. This Agreement shall be enforced, governed by and construed in
accordance with the laws of the State of New York, without giving effect to
conflict of law provisions thereof. In the event that any provision of this
Agreement is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute
or rule of law. Any provision hereof which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other
provision hereof. The parties hereto hereby submit to the exclusive
jurisdiction of the United States Federal Courts located in New York, New York
with respect to any dispute arising under this Agreement or the transactions
contemplated hereby.
e. This Agreement and the Securities Purchase Agreement
(including all schedules and exhibits thereto) constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and
thereof. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein and therein. This Agreement
and the Securities Purchase Agreement supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.
f. No assignment, transfer or delegation, whether by operation of
law or otherwise, of any rights or obligations under this Agreement by the
Company or any Investor respectively, shall be made without the prior written
consent of the majority in interest of the
13
Investors or the Company, respectively; provided that the rights of an
Investor may be transferred to a subsequent holder of the Investor's
Registrable Securities (provided such transferee shall provide to the Company,
together with or prior to such transferee's request to have such Registrable
Securities included in a Registration, a writing executed by such transferee
agreeing to be bound as an Investor by the terms of this Agreement); and
provided further that the Company may transfer its rights and obligations
under this Agreement to a purchaser of all or a substantial portion of its
business if the obligations of the Company under this Agreement are assumed in
connection with such transfer, either by merger or other operation of law
(which may include, without limitation, a transaction whereby the Registrable
Securities are converted into securities of the successor in interest) or by
specific assumption executed by the transferee in form and substance
reasonably acceptable to a majority in interest of the Investors; and
provided, further, that in the event that the Company transfers its rights and
obligations under this Agreement pursuant to the preceding clause, it shall
remain liable for its obligations hereunder.
g. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall constitute
one and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this
Agreement.
i. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish
the purposes of this Agreement and the consummation of the transactions
contemplated hereby.
j. All consents and other determinations to be made by the
Investors pursuant to this Agreement shall be made by Investors holding a
majority of the Registrable Securities, determined as if all shares of
Preferred Stock and Warrants then outstanding have been converted into or
exercised for Registrable Securities.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
14
IN WITNESS WHEREOF, the Company and the undersigned Investor have
caused this Agreement to be duly executed as of the date first above written
CELGENE CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Its:
----------------------------------
By:
-----------------------------------
Name:
----------------------------------
Its:
-----------------------------------