Exhibit 10.5
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INVESTMENT AGREEMENT
dated as of June 22, 2000
by and between
AVENTIS PHARMACEUTICALS INC.
a Delaware corporation
and
MILLENNIUM PHARMACEUTICALS, INC.,
a Delaware corporation
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TABLE OF CONTENTS
ARTICLE I PURCHASE AND SALE OF SHARES..........................................1
Section 1.1 Purchase and Sale..............................................1
Section 1.2 Closing Dates..................................................2
Section 1.3 Transactions at Each Closing...................................2
ARTICLE II REPRESENTATIONS AND WARRANTIES......................................3
Section 2.1 Representations and Warranties of the Company..................3
Section 2.2 Representations and Warranties of Purchaser...................11
ARTICLE III EQUITY PURCHASES FROM THE COMPANY.................................12
Section 3.1 Subscription Rights...........................................12
Section 3.2 Issuance and Delivery of New Securities and Voting Stock......13
Section 3.3 Termination of Article III....................................13
ARTICLE IV LIMITATIONS ON PURCHASES OF ADDITIONAL EQUITY SECURITIES...........13
Section 4.1 Purchases of Equity Securities................................13
ARTICLE V TRANSFER OF COMMON STOCK............................................16
Section 5.1 Limitations on Transfer.......................................16
ARTICLE VI COVENANTS AND ADDITIONAL AGREEMENTS................................17
Section 6.1 Ordinary Course...............................................17
Section 6.2 Access and Information........................................17
Section 6.3 Further Actions...............................................18
Section 6.4 Further Assurances............................................18
Section 6.5 Rights to Information about Board and the Company.............19
ARTICLE VII CONDITIONS PRECEDENT..............................................19
Section 7.1 Each Party's Obligations......................................19
Section 7.2 Conditions to the Obligations of the Company..................20
Section 7.3 Conditions to the Obligations of Purchaser....................20
ARTICLE VIII TERMINATION......................................................21
Section 8.1 Termination...................................................21
Section 8.2 Effect of Termination.........................................22
ARTICLE IX INDEMNIFICATION....................................................23
Section 9.1 Indemnification of Purchaser..................................23
Section 9.2 Indemnification Procedures....................................23
Section 9.3 Survival of Representations and Warranties....................24
ARTICLE X INTERPRETATION; DEFINITIONS.........................................24
Section 10.1 Interpretation...............................................24
Section 10.2 Definitions..................................................24
ARTICLE XI MISCELLANEOUS......................................................29
Section 11.1 Governing Law................................................29
Section 11.2 Assignment...................................................29
Section 11.3 Amendments...................................................29
Section 11.4 Notices......................................................30
Section 11.5 Public Announcements.........................................31
▇▇▇▇▇▇▇ ▇▇.▇ ▇▇ ▇▇▇▇▇▇ Construction.......................................31
Section 11.7 Headings.....................................................31
Section 11.8 No Implied Waivers; Rights Cumulative........................31
Section 11.9 Severability.................................................31
Section 11.10 Execution in Counterparts...................................31
Section 11.11 No Third Party Beneficiaries................................31
Section 11.12 Specific Enforcement........................................31
Section 11.13 Cooperation.................................................32
Section 11.14 Expenses and Remedies.......................................32
Section 11.15 Transfer of Shares..........................................32
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Exhibit 10.5
INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (the "Agreement") is made as of June 22,
2000 by and between MILLENNIUM PHARMACEUTICALS, INC., a Delaware
corporation (the "Company"), and AVENTIS PHARMACEUTICALS INC., a Delaware
corporation ("Purchaser").
WHEREAS, the Company and Purchaser are parties to the following
agreements, each executed as of the date set forth above: Collaboration
Agreement, Technology Transfer Agreement and Technology Development
Agreement (as such terms are defined below) (collectively, the
"Transaction Agreements");
WHEREAS, in connection with the execution of the Collaboration
Agreement, Purchaser wishes to purchase from the Company, and the Company
wishes to sell to Purchaser, shares of the Company's Common Stock, $.001
par value per share ("Common Stock"), on the terms and subject to the
conditions set forth herein;
WHEREAS, in connection with such sale and purchase of shares of
Common Stock, the Company and Purchaser wish to enter into a registration
rights agreement (the "Registration Rights Agreement"), substantially in
the form attached hereto as Exhibit A.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, the Company and Purchaser agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
Section 1.1 Purchase and Sale.
(a) Subject to the terms and conditions of this Agreement, at the
First Closing (as defined below) the Company agrees to issue and sell to
Purchaser and Purchaser agrees to purchase from the Company 1,258,178
shares of the Company's Common Stock (the "First Closing Shares"), at a
purchase price of $ 119.22 per share for an aggregate purchase price of
One Hundred Fifty Million Dollars ($150,000,000) (the "First Closing
Purchase Price").
(b) Subject to the terms and conditions of this Agreement, at the
Second Closing (as defined below) the Company agrees to issue and sell to
Purchaser and Purchaser agrees to purchase from the Company, for an
aggregate purchase price of Fifty Million Dollars ($50,000,000) (the
"Second Closing Purchase Price"), shares of the Company's Common Stock
(the "Second Closing Shares"), at a purchase price per share equal to
115% of the average daily closing price of a share of the Company's
Common Stock over the 30 calendar day period ending on December 29, 2000;
except (i) if the closing price of a share of the Company's Common Stock
over the three trading day period ending on December 29, 2000 is higher
than 115% of such 30 calendar day average price, then the purchase price
shall be the lesser of such three trading day average closing price and
120% of such 30 calendar day average price; or (ii) if the average
closing price of a share of the Company's Common Stock over the three
trading day
period ending on December 29, 2000 is 85% of such 30 calendar day average
price or lower, then the purchase price shall be 110% of such 30 calendar day
average price.
(c) Subject to the terms and conditions of this Agreement, at the
Third Closing (as defined below) the Company agrees to issue and sell to
Purchaser and Purchaser agrees to purchase from the Company, for an
aggregate purchase price of Fifty Million Dollars ($50,000,000) (the
"Third Closing Purchase Price"), shares of the Company's Common Stock
(the "Third Closing Shares"), at a purchase price per share equal to 115%
of the average daily closing price of a share of the Company's Common
Stock over the 30 calendar day period ending on June 27, 2001; except (i)
if the closing price of a share of the Company's Common Stock over the
three trading day period ending on June 27, 2001 is higher than 115% of
such 30 calendar day average price, then the purchase price shall be the
lesser of such three trading day average closing price and 120% of such
30 calendar day average price; or (ii) if the average closing price of a
share of the Company's Common Stock over the three trading day period
ending on June 27, 2001 is 85% of such 30 calendar day average price or
lower, then the purchase price shall be 110% of such 30 calendar day
average price.
Section 1.2 CLOSING DATES.
(a) The closing of the purchase and sale of the First Closing
Shares hereunder (the "First Closing") shall be held at the offices of
▇▇▇▇ and ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, at 10:00 a.m.,
Boston time, on the third Business Day following the first date on which
all the conditions to Closing set forth in Article VII have been
satisfied or waived, or at such other place, time and date as the Company
and Purchaser shall agree, but in no event earlier than July 6, 2000. The
Company shall give Purchaser three (3) Business Days prior notice of the
date the First Closing is scheduled to occur. The date of the First
Closing is hereinafter referred to as the "First Closing Date."
(b) The closing of the purchase and sale of the Second Closing
Shares hereunder (the "Second Closing") shall be held at the offices of
▇▇▇▇ and ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, at 10:00 a.m.,
Boston time, on Thursday, January 4, 2001, or at such other place, time
and date as the Company and Purchaser shall agree. The date of the Second
Closing is hereinafter referred to as the "Second Closing Date."
(c) The closing of the purchase and sale of the Third Closing
Shares hereunder (the "Third Closing") shall be held at the offices of
▇▇▇▇ and ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, at 10:00 a.m.,
Boston time, on Monday, July 2, 2001, or at such other place, time and
date as the Company and Purchaser shall agree. The date of the Third
Closing is hereinafter referred to as the "Third Closing Date." Each of
the First Closing, Second Closing and Third Closing may sometimes be
referred to herein generally as a "Closing."
Section 1.3 TRANSACTIONS AT EACH CLOSING.
(a) At the First Closing, subject to the terms and conditions of
this Agreement, (i) the Company shall issue and sell to Purchaser and
Purchaser shall purchase the First Closing Shares; (ii) the Company shall
deliver to Purchaser a certificate representing the First Closing Shares,
registered in the name of Purchaser against payment of the First Closing
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Purchase Price by wire transfer of immediately available funds to
an account or accounts previously designated by the Company no less than
five (5) Business Days prior to the First Closing Date; and (iii) the
Company and Purchaser shall enter into the Registration Rights Agreement.
(b) At the Second Closing, subject to the terms and conditions of
this Agreement, (i) the Company shall issue and sell to Purchaser and
Purchaser shall purchase the Second Closing Shares; and (ii) the Company
shall deliver to Purchaser a certificate representing the Second Closing
Shares, registered in the name of Purchaser against payment of the Second
Closing Purchase Price by wire transfer of immediately available funds to
an account or accounts previously designated by the Company no less than
five (5) Business Days prior to the Second Closing Date.
(c) At the Third Closing, subject to the terms and conditions of
this Agreement, (i) the Company shall issue and sell to Purchaser and
Purchaser shall purchase the Third Closing Shares; and (ii) the Company
shall deliver to Purchaser a certificate representing the Third Closing
Shares, registered in the name of Purchaser against payment of the Third
Closing Purchase Price by wire transfer of immediately available funds to
an account or accounts previously designated by the Company no less than
five (5) Business Days prior to the Third Closing Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to Purchaser as follows:
(a) CORPORATE ORGANIZATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. Each Subsidiary is duly organized and validly existing
and, if applicable, is in good standing, under the laws of the
jurisdiction of its incorporation or organization. Each of the Company
and its Subsidiaries is duly qualified or licensed and, if applicable, is
in good standing as a foreign corporation, in each jurisdiction in which
the properties owned, leased or operated, or the business conducted, by
it require such qualification or licensing, except for any such failure
so to qualify or be in good standing which, individually or in the
aggregate, would not have a Material Adverse Effect on the Company and
its Subsidiaries, taken as a whole. Each of the Subsidiaries has the
requisite power and authority to carry on its business as it is now being
conducted. The Company has heretofore made available to Purchaser
complete and correct copies of the Certificate of Incorporation of the
Company (the "Company Charter") and the By-laws of the Company (the
"Company By-Laws") and the certificate of incorporation and by-laws, or
the comparable organizational documents, of each of its Subsidiaries,
each as amended to date and currently in full force and effect.
(b) CORPORATE AUTHORITY. The Company has the requisite corporate
power and authority to execute, deliver and perform this Agreement and
the Registration Rights Agreement and to consummate the transactions
contemplated hereby and thereby. The
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execution, delivery and performance of this Agreement and the
Registration Rights Agreement by the Company, the issuance and sale by
the Company of the Shares and the performance by the Company of the other
transactions contemplated hereby and thereby have been duly authorized by
the Company's Board of Directors, and no other corporate proceedings on
the part of the Company are necessary to authorize this Agreement or the
Registration Rights Agreement or for the Company to consummate the
transactions so contemplated herein and therein. This Agreement is, and
the Registration Rights Agreement, when executed or delivered will be,
valid and binding agreements of the Company, enforceable against the
Company in accordance with their respective terms, assuming that this
Agreement and the Registration Rights Agreement are valid and binding
agreements of Purchaser, subject as to enforcement of remedies to
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting generally the enforcement of creditors' rights and subject
to a court's discretionary authority with respect to the granting of a
decree ordering specific performance or other equitable remedies.
(C) NO VIOLATIONS; CONSENTS AND APPROVALS.
(i) Neither the execution, delivery or performance by the Company
of this Agreement or the Registration Rights Agreement or the
consummation by the Company of the transactions contemplated hereby or
thereby (A) will result in a violation or breach of the Company Charter
or the Company By-Laws or the charter or by-laws of any of the Company's
Subsidiaries or (B) will result in a violation or breach of (or give rise
to any right of termination, revocation, cancellation or acceleration
under or increased payments under), or constitute a default (with or
without due notice or lapse of time or both) under, or result in the
creation of any lien, mortgage, charge, encumbrance or security interest
of any kind (a "Lien") upon any of the properties or assets of the
Company or any of its Subsidiaries under, (1) any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
contract, agreement, obligation, instrument, offer, commitment,
understanding or other arrangement (each a "Contract") or of any license,
waiver, exemption, order, franchise, permit or concession (each a
"Permit") to which the Company or any of its Subsidiaries is a party or
by which any of their properties or assets may be bound, or (2) subject
to the governmental filings and other matters referred to in clause (ii)
below, any judgment, order, decree, statute, law, regulation or rule
applicable to the Company or any of its Subsidiaries, except in the case
of clause (B), for violations, breaches, defaults, rights of
cancellation, termination, revocation or acceleration or Liens that would
not, individually or in the aggregate, have a Material Adverse Effect on
the Company and its Subsidiaries, taken as a whole.
(ii) Except for filings as may be required under, and other
applicable requirements of, the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), no consent, approval, order or
authorization of, or registration, declaration or filing with, any
government or any court, administrative agency or commission or other
governmental authority or agency, federal, state, local or foreign (a
"Governmental Entity"), is required with respect to the Company in
connection with the execution, delivery or performance by the Company of
this Agreement or the consummation by the Company of the transactions
contemplated hereby (except where the failure to obtain such consents,
approvals, orders or authorizations, or to make such filings would not,
individually or in the aggregate, have a Material Adverse Effect on the
Company and its Subsidiaries, taken as a whole).
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(d) CAPITAL STOCK. The authorized capital stock of the Company
consists of (i) 500,000,000 shares of Common Stock, of which an aggregate
of 93,427,878 shares of Common Stock were issued and outstanding as of
the close of business on June 16, 2000, and (ii) 5,000,000 shares of
preferred stock, $.001 par value per share, of which none were issued and
outstanding as of the close of business on June 16, 2000. As of the close
of business on June 16, 2000, there were outstanding under the Company's
stock option and incentive plans (collectively, the "Company Stock
Plans"), options to acquire an aggregate of 16,202,414 shares of Common
Stock (subject to adjustment on the terms set forth therein). All of the
outstanding shares of Common Stock have been duly authorized and validly
issued, and are fully paid and nonassessable. Except as set forth on
Schedule 2.1(d), there are no preemptive or similar rights on the part of
any holders of any class of securities of the Company or of any of its
Subsidiaries. Except for the Common Stock or as set forth on Schedule
2.1(d), the Company has outstanding no bonds, debentures, notes or other
obligations or securities the holders of which have the right to vote (or
are convertible or exchangeable into or exercisable for securities having
the right to vote) with the stockholders of the Company on any matter.
Except as set forth above or on Schedule 2.1(d), as of the date of this
Agreement, there are no securities convertible into or exchangeable for,
or options, warrants, calls, subscriptions, rights, contracts,
commitments, arrangements or understandings of any kind to which the
Company or any of its Subsidiaries is a party or by which any of them is
bound obligating the Company or any of its Subsidiaries contingently or
otherwise to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other voting securities of
the Company or of any of its Subsidiaries. Except as set forth on
Schedule 2.1(d), there are no outstanding agreements of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of capital stock of the Company or any of its Subsidiaries.
(e) SUBSIDIARIES.
(i) Schedule 2.1(e) contains a complete and correct description
of the shares of stock or other equity interests that are authorized, or
issued and outstanding, of each of the Company's Subsidiaries. Except as
set forth on Schedule 2.1(e), the Company has no equity interests with a
value of $100,000 or more in any Person other than its Subsidiaries, and
there are no commitments on the part of the Company or any Subsidiary to
contribute additional capital in respect of any equity interest in any
Person. Each of the outstanding shares of capital stock of each of the
Subsidiaries has been duly authorized and validly issued, and is fully
paid and nonassessable. Except as set forth on Schedule 2.1(e), all of
the outstanding shares of capital stock of each Subsidiary are owned,
either directly or indirectly, by the Company free and clear of all
Liens.
(ii) Schedule 2.1(e)(ii) contains a complete and correct list of
all Subsidiaries of the Company.
(f) SEC FILINGS. The Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by
it with the SEC under the Securities Act and the Exchange Act since May
1996 (the "Company SEC Documents"). As of its filing date, each Company
SEC Document filed, as amended or supplemented, if applicable, (i)
complied in all material respects with the applicable requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and
regulations thereunder and (ii) did not, at the time
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it was filed, contain any untrue statement of a material fact or
omit to state any 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.
(g) ABSENCE OF CERTAIN EVENTS AND CHANGES. Except as disclosed in
the Company SEC Documents filed with the SEC and publicly available prior
to the date hereof, or as otherwise contemplated or permitted by this
Agreement, and except for any items referred to in Schedule 2.1(g), since
March 31, 2000, the Company and its Subsidiaries have conducted their
respective businesses in the ordinary course consistent with past
practice and there has not been any event, change or development which,
individually or in the aggregate, would have a Material Adverse Effect on
the Company and its Subsidiaries, taken as a whole, other than any state
of facts, event, change or effect attributable to changes in general
economic or market conditions affecting the biotechnology and
pharmaceutical industries.
(h) COMPLIANCE WITH APPLICABLE LAW. Except as disclosed in the
Company SEC Documents, each of the Company and its Subsidiaries is in
compliance with all statutes, laws, regulations, rules, judgments, orders
and decrees of all Governmental Entities applicable to it that relate to
its respective business, and neither the Company nor any of its
Subsidiaries has received any notice alleging noncompliance except, with
reference to all the foregoing, where the failure to be in compliance
would not, individually or in the aggregate, have a Material Adverse
Effect on the Company and its Subsidiaries, taken as a whole. This
Section 2.1(h) does not relate to employee benefits matters (for which
Section 2.1(l) is applicable, environmental matters, (for which Section
2.1(m) is applicable) or tax matters (for which Section 2.1(k) is
applicable). Each of the Company and its Subsidiaries has all Permits
that are required in order to permit it to carry on its business as it is
presently conducted, except where the failure to have such Permits or
rights would not, individually or in the aggregate, have a Material
Adverse Effect on the Company and its Subsidiaries, taken as a whole. All
such Permits are in full force and effect and the Company and its
Subsidiaries are in compliance with the terms of such Permits, except
where the failure to be in full force and effect or in compliance would
not individually or in the aggregate, have a Material Adverse Effect on
the Company and its Subsidiaries, taken as a whole.
(i) LITIGATION. Except as disclosed in the Company SEC Documents
filed with the SEC and publicly available prior to the date hereof or
referred to in Schedule 2.1(i), there are no civil, criminal or
administrative actions, suits, or proceedings pending or, to the
Knowledge of the Company, threatened, against the Company or any of its
Subsidiaries that, individually or in the aggregate, are likely to have a
Material Adverse Effect on the Company and its Subsidiaries, taken as a
whole. Except as disclosed in the Company SEC Documents filed with the
SEC and publicly available prior to the date hereof, there are no
outstanding judgments, orders, decrees, or injunctions of any
Governmental Entity against the Company or any of its Subsidiaries that,
insofar as can reasonably be foreseen, individually or in the aggregate,
in the future would have a Material Adverse Effect on the Company and its
Subsidiaries, taken as a whole.
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(j) CONTRACTS.
(i) The Company has filed as exhibits to the Company SEC
Documents all material agreements required to be filed under the rules
and regulations of the SEC (the "Material Contracts").
(ii) All Material Contracts are legal, valid, binding, in full
force and effect and enforceable against each party thereto, except to
the extent that any failure to be enforceable, individually or in the
aggregate, would not reasonably be expected to have or result in a
Material Adverse Effect on the Company and its Subsidiaries, taken as a
whole, provided that no representation is made as to the enforceability
of any non-competition provision in any employment agreement. There does
not exist under any Material Contract any violation, breach or event of
default, or event or condition that, after notice or lapse of time or
both, would constitute a violation, breach or event of default
thereunder, on the part of any of the Company or its Subsidiaries or, to
the Knowledge of the Company or any of its Subsidiaries, any other
Person, other than such violations, breaches or events of default as
would not, individually or in the aggregate, have a Material Adverse
Effect on the Company and its Subsidiaries, taken as a whole. The
enforceability of all Material Contracts will not be adversely affected
in any manner by the execution, delivery or performance of this Agreement
or the Registration Rights Agreement or the consummation of the
transactions contemplated hereby or thereby, and no Material Contract
contains any change in control or other terms or conditions that will
become applicable or inapplicable as a result of the consummation of such
transactions. Except as set forth on Schedule 2.1(j), neither the Company
nor the Subsidiaries are a party to any contract prohibiting or
materially restricting the ability of the Company or any of its
Subsidiaries to conduct its business, to engage in any business or
operate in any geographical area or compete with any person.
(k) TAXES.
(i) Except as set forth on Schedule 2.1(k), (A) all Tax Returns
required to be filed by or on behalf of each of the Company and its
Subsidiaries have been filed except to the extent that a failure to file,
individually or in the aggregate, would not have a Material Adverse
Effect on the Company and its Subsidiaries, taken as a whole; (B) all
such filed Tax Returns are complete and accurate in all respects, other
than any incompleteness or any inaccuracy that would not, individually or
in the aggregate, have a Material Adverse Effect on the Company and its
Subsidiaries, taken as a whole, and all Taxes shown to be due on such Tax
Returns have been paid; (C) no written claim (other than a claim that has
been finally settled) has been made by a taxing authority that any of the
Company or its Subsidiaries is subject to an obligation to file Tax
Returns or to pay or collect Taxes imposed by any jurisdiction in which
either the Company or its Subsidiaries does not file Tax Returns or pay
or collect Taxes, other than any such claim that would not have a
Material Adverse Effect on the Company and its Subsidiaries, taken as a
whole, or for which adequate reserves have been provided on the balance
sheets contained in the Company SEC Documents filed with the SEC and
publicly available prior to the date hereof; (D) there is no deficiency
with respect to any Taxes which would, individually or in the aggregate,
have a Material Adverse Effect on the Company and its Subsidiaries, taken
as a whole, other than any such deficiency for which adequate reserves
have been provided on the balance sheet contained in the financial
statements in the SEC Company
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Documents filed with the SEC and publicly available prior to the
date hereof; and (E) all material assessments for Taxes due with respect
to completed and settled examinations or concluded litigation have been
paid which, individually or in the aggregate, exceed $100,000. As used in
this Agreement, "Taxes" shall include all federal, state, local and
foreign income, franchise, property, sales, excise and other taxes,
tariffs or governmental charges of any nature whatsoever, including
interest and penalties, and additions thereto; and "Tax Returns" shall
mean all federal state, local and foreign tax returns, declarations,
statements, reports, schedules, forms and information returns relating to
Taxes.
(ii) Except as set forth on Schedule 2.1(k), each of the Company
and its Subsidiaries has duly and timely withheld all Taxes required to
be withheld in connection with its business and assets, and such withheld
Taxes have been either duly and timely paid to the proper governmental
authorities or properly set aside in accounts for such purpose, except to
the extent that any failure to do so would not have a Material Adverse
Effect on the Company and its Subsidiaries, taken as a whole.
(iii) Except as set forth on Schedule 2.1(k), (A) all taxable
periods of each of the Company and its Subsidiaries ending before
December 31, 1995 are closed or no longer subject to audit; (B) none of
the Company or any of its Subsidiaries is currently under any audit by
any taxing authority as to which such taxing authority has asserted in
writing any claim which, if adversely determined, could have a Material
Adverse Effect on the Company and its Subsidiaries, taken as a whole; and
(C) no waiver of the statute of limitations is in effect with respect to
any taxable year of the Company or any of its Subsidiaries.
(iv) Except as set forth on Schedule 2.1(k), (A) none of the
Company or its Subsidiaries is a party to or bound by or has any
obligation under any Tax allocation, sharing, indemnification or similar
agreement or arrangement with any Person which might result in a Material
Adverse Effect to the Company or Subsidiary which entered into such
agreement or arrangement; and (B) none of the Company or its Subsidiaries
is or has been at any time a member of any group of companies filing a
consolidated, combined or unitary income tax return other than any such
group the common parent of which is the Company.
(l) EMPLOYEE BENEFIT PLANS AND RELATED MATTERS; ERISA.
(i) EMPLOYEE BENEFIT PLANS. Each Employee Benefit Plan that
provides for equity-based compensation or that has associated costs that
are expected to be material to the Company or its Subsidiaries in the
aggregate and that is expected to provide for contributions to be made by
the Company or its Subsidiaries or their Employees after the date hereof
or to permit the accrual of additional benefits by any Employee of the
Company or its Subsidiaries after the date hereof is either listed on
Schedule 2.1(1) or has been filed with the SEC as a material contract
(collectively, the "Plans").
(ii) QUALIFICATION. Except to the extent that failure to meet the
requirements of Section 401(a) of the Code would not result in any
material liability as to which adequate reserves have not been
established, each Employee Benefit Plan intended to be qualified under
section 401(a) of the Code, and the trust (if any) forming a part
thereof, (A) has received a favorable determination letter from the IRS
as to its qualification under the Code and
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to the effect that each such trust is exempt from taxation under
section 501(a) of the Code, and nothing has occurred since the date of
such determination letter that could adversely affect such qualification
or tax-exempt status or (B) a timely application for such a favorable
determination letter was filed and the Company has no reason to believe
that such a favorable determination letter will not be granted.
(iii) COMPLIANCE LIABILITY.
(A) No liability has been or is reasonably expected to be
incurred under or pursuant to Title I or IV of ERISA or the penalty,
excise Tax or joint and several liability provisions of the Code relating
to employee benefit plans that is or would be material to the Company and
its Subsidiaries, taken as a whole.
(B) Each of the Employee Benefit Plans has been operated and
administered in all respects in compliance with its terms, all applicable
laws and all applicable collective bargaining agreements, except for any
failure so to comply that, individually and in the aggregate, could not
reasonably be expected to result in a material liability or obligation on
the part of the Company and its Subsidiaries in the aggregate. There are
no pending or threatened claims by or on behalf of any of the Employee
Benefit Plans, by any Employee or otherwise involving any such Employee
Benefit Plan or the assets of any Employee Benefit Plan (other than
routine claims for benefits or actions seeking qualified domestic
relations orders or qualified medical child support orders, all of which
have been fully reserved for on the regularly prepared balance sheets of
the Company or its Subsidiaries, as applicable) which would reasonably be
expected to result in any material liability to the Company and its
Subsidiaries in the aggregate.
(C) Except to the extent that it would not give rise to a
material liability or obligation on the part of the Company and it
Subsidiaries in the aggregate, no Employee is or will become entitled to
post-employment benefits of any kind by reason of employment with the
Company or its Subsidiaries, including, without limitation, death or
medical benefits (whether or not insured), other than (x) coverage
mandated by section 4980B of the Code or other applicable laws, (y)
retirement benefits payable under any Plan qualified under section 401(a)
of the Code or (z) accrued deferred compensation. The consummation of the
transactions hereunder and under the Registration Rights Agreement will
not result in an increase in the amount of compensation or benefits or
the acceleration of the vesting or timing of payment of any compensation
or benefits payable to or in respect of any Employee by any of the
Company or its Subsidiaries.
(iv) EMPLOYEES, LABOR MATTERS, ETC. Neither the Company nor any
of its Subsidiaries is a party to or bound by any collective bargaining
agreement, and there are no labor unions or other organizations
representing, purporting to represent or attempting to represent any
employees employed by the Company or any of its Subsidiaries. Since March
31, 2000, there has not occurred or been threatened any strike, slowdown,
picketing, work stoppage, concerted refusal to work overtime or other
similar labor activity with respect to any employees of the Company or
any of its Subsidiaries. Except as set forth on Schedule 2.1(1), there
are no labor disputes currently subject to any grievance procedure,
arbitration or litigation and there is no petition pending or threatened
with respect to any employee of the Company or its
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Subsidiaries. The Company and each of its Subsidiaries has
complied with all applicable laws pertaining to the employment or
termination of employment of their respective employees, including,
without limitation, all such laws relating to labor relations, equal
employment opportunities, fair employment practices, prohibited
discrimination or distinction and other similar employment activities,
except for any failure so to comply that, individually and in the
aggregate, could not result in a Material Adverse Effect on the Company
and its Subsidiaries, taken as a whole.
(m) ENVIRONMENTAL MATTERS. Except as disclosed in the Company SEC
Documents filed with the SEC and publicly available prior to the date
hereof and except for such matters that, individually or in the
aggregate, would not have a Material Adverse Effect on the Company and
its Subsidiaries, taken as a whole, (i) the Company and its Subsidiaries
are in compliance with all applicable Environmental Laws (as defined
below), (ii) the Company and its Subsidiaries have all Permits required
under Environmental Laws for the operation of their respective businesses
as presently conducted ("Environmental Permits"), (iii) neither the
Company nor its Subsidiaries has received notice from any Governmental
Entity asserting that either the Company or any of its Subsidiaries may
be in violation of, or liable under, any Environmental Law, and (iv)
there are no actions, proceedings or claims pending (or, to the Knowledge
of the Company or any of its Subsidiaries, threatened) seeking to impose
any liability on Environmental Permits or Hazardous Substances (as
defined below).
For purposes of this Agreement, "Environmental Law," means any
federal, state, local or foreign law, statute, regulation or decree
relating to (x) the protection of the environment or (y) the use,
storage, treatment generation, transportation, processing, handling,
release or disposal of Hazardous Substances in each case as in effect on
the date hereof. "Hazardous Substance" means any waste, substance,
material, pollutant or contaminant listed, defined, designated or
classified as hazardous, toxic or radioactive, or otherwise regulated,
under any Environmental Law.
(n) DELAWARE LAW. The Company has taken all action necessary to
ensure that the provisions of Section 203 of the Delaware General
Corporation law (the "DGCL") will not be applicable to Purchaser or its
Affiliates as a result of the transactions contemplated by this
Agreement.
(o) STATUS OF SHARES. The Shares being issued at each Closing
have been duly authorized by all necessary corporate action on the part
of the Company, and at each Closing such Shares will have been validly
issued and, assuming payment therefor has been made, will be fully paid
and nonassessable, and the issuance of such Shares will not be subject to
preemptive rights of any other person. The Shares will be eligible for
listing on the Nasdaq Stock Market.
(p) INTELLECTUAL PROPERTY. The Intellectual Property that is
owned by the Company or any of its Subsidiaries is owned free from any
Liens (other than Permitted Liens), except where the failure to be free
from liens would not have a Material Adverse Effect on the Company and
its Subsidiaries, taken as a whole. All material Intellectual Property
Licenses are in full force and effect in accordance with their terms, and
are free and clear of any Liens (other than Permitted Liens), except
where the failure to be free from Liens or to be in full
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force and effect would not have a Material Adverse Effect on the
Company and its Subsidiaries, taken as a whole. To the Knowledge of the
Company, the conduct of the business of the Company and its Subsidiaries
does not infringe or conflict with the rights of any third party in
respect of any Intellectual Property, except where such conduct would not
materially affect the ability of the Company and its Subsidiaries to
conduct their business as presently conducted. To the Knowledge of the
Company, none of the Company Intellectual Property is being infringed by
any third party except where such infringement would not have a Material
Adverse Effect on Company and its Subsidiaries, taken as a whole. There
is no claim or demand of any Person pertaining to, or any proceeding
which is pending or, to the Knowledge of the Company, threatened, that
challenges the rights of the Company or any of its Subsidiaries in
respect of any Company Intellectual Property, or that claims that any
default exists under any Intellectual Property License, except where such
claim, demand or proceeding would not materially affect the ability of
the Company and its Subsidiaries to conduct their business as presently
conducted. For purposes of this Agreement, "Company Intellectual
Property" means the Intellectual Property that is owned by the Company
and its Subsidiaries and the Intellectual Property subject to written or
oral licenses, agreements or arrangements pursuant to which its use by
the Company or any of its Subsidiaries is permitted by any Person.
(q) BROKERS OR FINDERS. No agent, broker, investment banker or
other firm is or will be entitled to any broker's or finder's fee or any
other commission or similar fee in connection with any of the
transactions contemplated by this Agreement.
Section 2.2 Representations and Warranties of Purchaser.
Purchaser hereby represents and warrants to the Company as follows:
(a) ORGANIZATION. Purchaser is a corporation duly organized and
validly existing and in good standing under the laws of Delaware, with
all requisite power and authority to own, lease and operate its
properties and to conduct its business as now being conducted.
(b) AUTHORITY. Purchaser has the requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and the Registration Rights Agreement and to consummate the
transactions contemplated hereby and thereby. All necessary corporate
action required to have been taken by or on behalf of Purchaser by
applicable law or otherwise to authorize the approval, execution,
delivery and performance by Purchaser of this Agreement and the
Registration Rights Agreement and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized,
and no other proceedings on its part are or will be necessary to
authorize this Agreement or the Registration Rights Agreement or for it
to consummate such transactions. This Agreement is, and the Registration
Rights Agreement, when executed and delivered will be, valid and binding
agreements of Purchaser, enforceable against Purchaser in accordance with
their respective terms, assuming that this Agreement and the Registration
Rights Agreement are valid and binding agreements of the Company, subject
as to enforcement of remedies to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting generally the
enforcement of creditors' rights and subject to a court's discretionary
authority with respect to the granting of a decree ordering specific
performance or other equitable remedies.
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(c) CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the
execution and delivery of this Agreement or the Registration Rights
Agreement nor the performance by Purchaser of its obligations hereunder
or thereunder will (i) conflict with, result in a breach of the terms,
conditions or provisions of, constitute a default under, result in the
creation of any Lien upon any of the properties or assets of Purchaser
pursuant to, or (ii) require any consent, approval or other action by or
any notice to or filing with any Government Entity pursuant to, the
organizational documents or agreements of Purchaser or any agreement,
instrument, order, judgment, decree, statute, law, rule or regulation by
which Purchaser is bound (assuming that the Company shall have made or
obtained all consents, approvals, orders, authorizations or filings
referred to in Section 2.1(c)(ii)), except where the failure to obtain
such consents, approvals, orders or authorizations, or to make such
filings would not, individually or in the aggregate, have a Material
Adverse Effect on the Purchaser and its Subsidiaries, taken as a whole or
for filings after each Closing under Section 13(d) of the Exchange Act
and filings under the HSR Act.
(d) ACQUISITION FOR INVESTMENT. (i) Purchaser is acquiring the
Shares for its own account for the purpose of investment and not with a
view to or for sale in connection with any distribution thereof, and
Purchaser has no present intention to effect, or any present or
contemplated plan, agreement, undertaking, arrangement, obligation,
indebtedness, or commitment providing for, any distribution of Shares,
(ii) Purchaser is an "accredited investor" as defined in Rule 501(a)
under the Securities Act, (iii) Purchaser has carefully reviewed the
representations concerning the Company contained in this Agreement and
has made detailed inquiry concerning the Company, its business and its
personnel, and (iv) Purchaser has sufficient knowledge and experience in
finance and business that it is capable of evaluating the risks and
merits of its investment in the Company and is able financially to bear
the risks thereof.
(e) BROKERS OR FINDERS. Except as set forth on Schedule 2.2(e),
no agent, broker, investment banker or other firm is or will be entitled
to any broker's or finder's fee or any other commission or similar fee
from Purchaser in connection with any of the transactions contemplated by
this Agreement.
ARTICLE III
EQUITY PURCHASES FROM THE COMPANY
Section 3.1 SUBSCRIPTION RIGHTS. So long as Purchaser has not
sold more than 500,000 Shares (as adjusted to reflect any stock splits,
stock dividends and similar recapitalizations) (other than sales to
Affiliates), if the Company proposes the issuance of New Securities
(other than any New Securities issued (i) to officers, employees,
directors, consultants or advisors of the Company or any of its
Subsidiaries pursuant to any employee stock offering, plan or
arrangement, (ii) in connection with any acquisition of another
corporation by the Company by merger, purchase of all or substantially
all of such corporation's assets or other reorganization (iii) in
connection with Pharmaceutical Alliances, (iv) in connection with
Research and Development Funding Transactions, (v) in connection with
equipment leasing or equipment financing arrangements, to the Person who
leased or financed such equipment and (vi) to Purchaser or its
Affiliates) then, prior to each such issuance of New Securities, the
Company shall offer to Purchaser a Pro Rata Share of such New Securities.
Any offer of New Securities made to Purchaser under this Section 3.1
shall be made by notice in writing (the "Subscription
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Notice"). The Subscription Notice shall set forth (i) the number
of New Securities proposed to be issued to Persons other than Purchaser
and the terms of such New Securities, (ii) the consideration (or manner
of determining the consideration), if any, for which such New Securities
are proposed to be issued and the terms of payment, (iii) the number of
New Securities offered to Purchaser in compliance with the provisions of
this Section 3.1 and (iv) the proposed date of issuance of such New
Securities. Not later than 20 Business Days after its receipt of a
Subscription Notice, Purchaser shall notify the Company in writing
whether it elects to purchase all or any portion of the New Securities
offered to Purchaser pursuant to the Subscription Notice. If Purchaser
shall elect to purchase any such New Securities, the New Securities which
it shall have elected to purchase shall be issued and sold to Purchaser
by the Company at the same time and on the same terms and conditions as
the New Securities are issued and sold to any other Person. If, for any
reason, the issuance of such New Securities is not consummated,
Purchaser's right to its Pro Rata Share of such issuance shall lapse,
subject to Purchaser's ongoing subscription right with respect to
issuances of New Securities at later dates or times.
Section 3.2 ISSUANCE AND DELIVERY OF NEW SECURITIES AND VOTING
STOCK. The Company represents and covenants to Purchaser that (i) upon
issuance, all the shares of New Securities sold to Purchaser pursuant to
this Article III shall be duly authorized, validly issued, fully paid and
nonassessable and shall be approved (if outstanding securities of the
Company of the same type are at the time already approved and the New
Securities are registered under the Securities Act) for listing on the
Nasdaq Stock Market or for quotation or listing on the principal trading
market for the securities of the Company at the time of issuance, (ii)
upon delivery of such shares, they shall be free and clear of all claims
and Liens of any nature and shall not be subject to any preemptive right
of any stockholder of the Company and (iii) in connection with any such
issuance, the Company shall take such actions as are specified in Section
2.1(o) with respect to such shares. Each share issued or delivered by the
Company hereunder shall bear the legends set forth in Section 11.15.
Section 3.3 TERMINATION OF ARTICLE III. This Article III shall
terminate upon the earlier of (i) a sale of all or substantially all of
the assets or business of the Company, by merger, sale of assets or
otherwise, or (ii) termination of the Research Program Term.
ARTICLE IV
LIMITATIONS ON PURCHASES OF ADDITIONAL EQUITY SECURITIES
Section 4.1 PURCHASES OF EQUITY SECURITIES. (a) Prior to the
third anniversary of the First Closing, except as permitted by Section
4.1(b), (c) or (d) and except as otherwise contemplated or permitted by
any of the Transaction Agreements, Purchaser and its Affiliates will not
(and will not assist or encourage other to) directly or indirectly in any
manner:
(i) acquire, or agree to acquire, directly or indirectly, alone
or in concert with others, by purchase, gift or otherwise, any direct or
indirect beneficial ownership (within the meaning of Rule l3d-3 under the
Exchange Act) or interest in any securities or direct or indirect rights,
warrants or options to acquire, or securities convertible into or
exchangeable for, any securities of the Company;
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(ii) make, or in any way participate in, directly or indirectly,
alone or in concert with others, any "solicitation" of "proxies" to vote
(as such terms are used in the proxy rules of the SEC promulgated
pursuant to Section 14 of the Exchange Act); provided, however, that the
prohibition in this subparagraph (ii) shall not apply to solicitations
exempted from the proxy solicitation rules by Rule 14a-2 under the
Exchange Act as such Rule is in effect as of the date hereof;
(iii) form, join or in any way participate in a "group" within
the meaning of Section 13(d)(3) of the Exchange Act with respect to any
voting securities of the Company;
(iv) acquire or agree to acquire, directly or indirectly, alone
or in concert with others, by purchase, exchange or otherwise, (i) any of
the assets, tangible or intangible, of the Company or (ii) direct or
indirect rights, warrants or options to acquire any assets of the
Company, except for such assets as are then being offered for sale by the
Company;
(v) enter into any arrangement or understanding with others to do
any of the actions restricted or prohibited under clauses (i), (ii) or
(iii) of this Section 4.1(a); or
(vi) otherwise act in concert with others, to seek to offer to
the Company or any of its stockholders any business combination,
restructuring, recapitalization or similar transaction to or with the
Company or otherwise seek in concert with others, to control, change or
influence the management, board of directors or policies of the Company
or nominate any person as a director of the Company who is not nominated
by the then incumbent directors, or propose any matter to be voted upon
by the stockholders of the Company; provided, however, that nothing in
this subparagraph (vi) shall prevent Purchaser or any Affiliate of
Purchaser, either acting alone or in concert with each other, from taking
any action.
(b) Nothing herein shall prevent Purchaser from purchasing any
securities of the Company pursuant to the terms of this Agreement
(including through exercise of its rights under Section 3.1 hereof) and
Purchaser shall not be treated as having breached any covenant in this
Agreement solely as a result of such purchase.
(c) Nothing herein shall prevent Purchaser from purchasing
additional Equity Securities of the Company if (i) prior thereto
Purchaser has not sold any Shares (other than to an Affiliate of
Purchaser) and (ii) after such purchase Purchaser and its Affiliates
would own no greater percent of the Total Voting Power of all Voting
Securities of the Company then outstanding than the Purchaser owned
immediately following the most recent Closing.
(d) This Section 4.1 shall terminate and Purchaser and its
Affiliates shall have the right to acquire any securities of the Company
without regard to the limitation on share ownership set forth in Section
4.1 in the event that:
(i) the Company has entered into (A) a merger agreement in which
the holders of the Company's Voting Securities would cease to hold a
majority of the voting securities of the surviving corporation, (B) an
agreement to sell all or substantially all its assets, or (C) an
agreement to be acquired, business combination, consolidation or any such
-14-
similar transaction, in each case with any Person other than a
wholly-owned subsidiary of the Company; provided, however, the limitation
shall continue if (i) the merger agreement is with a majority-owned
subsidiary of the Company and the Company is to be the surviving
corporation in the merger, or (ii) the merger agreement or other
agreements referred to in sections (A), (B), or (C) is subsequently
terminated or the transactions contemplated thereunder are not
consummated; or
(ii) a tender or exchange offer (other than a tender or exchange
offer that the Company's Board of Directors has recommended be rejected)
is made by any Person or 13D Group (as hereinafter defined) (other than
an Affiliate of, or any Person acting in concert with, Purchaser) to
acquire Voting Securities which, if added to the Voting Securities (if
any) already owned by such Person or 13D Group, would result, if
consummated in accordance with its terms, in the Beneficial Ownership by
such Person or 13D Group of more than 30% of the Total Voting Power of
all Voting Securities of the Company then outstanding, PROVIDED THAT the
limitation shall be reinstated if such tender or exchange offer is
withdrawn or terminated without such Person or 13D Group acquiring such
30% ownership level, and PROVIDED FURTHER, notwithstanding the
termination or withdrawal of any such tender or exchange offer, any
securities of the Company acquired by Purchaser or its Affiliates
following the making of such tender or exchange offer and prior to such
termination or withdrawal may be retained; or
(iii) it is publicly disclosed or Purchaser otherwise learns that
Voting Securities representing more than 35% of the Total Voting Power of
all Voting Securities of the Company then outstanding are Beneficially
Owned by any Person or 13D Group (other than an Affiliate of, or any
person acting in concert with, Purchaser); or
(iv) a proxy contest (or similar incident) is made by any Person
of 13D Group (other than an Affiliate of, or any Person acting in concert
with, Purchaser) to elect individuals who at the beginning of any
calendar year did not constitute the majority of the members of the Board
of Directors of the Company then in office and the Purchaser, upon the
advice of legal counsel and financial advisors, reasonably believes in
good faith, that such proxy contest will result in the election of
individuals who will constitute a majority of members of the Board of
Directors of the Company, but who did not, at the beginning of the
calendar year, constitute the majority of the members of the Board of
Directors of the Company then in office, PROVIDED THAT the limitation
shall be reinstated if such proxy contest or similar incident is
terminated or withdrawn without affecting the change in the Board of
Directors referred to above and PROVIDED FURTHER THAT, notwithstanding
the termination or withdrawal of any such proxy contest or similar
incident, any securities of the Company acquired by Purchaser or its
Affiliates following initiation of such proxy contest or similar incident
and prior to such termination or withdrawal may be retained.
(e) As used herein, the term "13D Group" shall mean any group of
Persons formed for the purpose of acquiring, holding, voting or disposing
of Voting Securities which would be required under Section 13(d) of the
Exchange Act and the rules and regulations thereunder (as now in effect
and based on present legal interpretations thereof) to file a statement
on Schedule 13D with the SEC as a "person" within the meaning of Section
13(d)(3) of the Exchange Act. Ownership of Voting Securities under
Section 4.1(d) above and Section 5.1(d)
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below shall be determined in accordance with Rule l3d-3 of the
Exchange Act as currently in effect.
(f) Nothing herein shall prevent Purchaser or Purchaser's
employees from purchasing securities of the Company pursuant to (i) a
pension plan established for the benefit of Purchaser's employees, (ii)
any employee benefit plan of the Purchaser or (iii) any stock portfolios
not controlled by Purchaser or any of its Affiliates that invest in the
Company among other companies.
(g) Nothing herein shall prevent Purchaser from acquiring
securities of another biotechnology or pharmaceutical company that
beneficially owns any of the Company's securities.
ARTICLE V
TRANSFER OF COMMON STOCK
Section 5.1 LIMITATIONS ON TRANSFER.
(a) Prior to the second anniversary of the First Closing,
Purchaser will not, directly or indirectly, sell, transfer, or otherwise
dispose of any Shares (except to any Affiliate of Purchaser). It is the
intent of the parties that this prohibition be construed broadly to limit
all forms of disposition of Shares including, without limitation, the
pledge or other encumbrance of the Shares and the issuance by the
Purchaser (or any Affiliate of the Purchaser) or any securities, options,
warrants or debt instruments convertible or exchangeable for Shares.
(b) After the second anniversary of the First Closing and prior
to the expiration of the Research Program Term, Purchaser will not,
directly or indirectly, sell, transfer or otherwise dispose of, in any
one week, more than 250,000 Shares and in any one calendar quarter, more
than 1,000,000 Shares (both limits as adjusted to reflect any stock
splits, stock dividends and similar recapitalizations) (except to an
Affiliate of Purchaser), PROVIDED, HOWEVER, that the limitations on share
transfer set forth in this Section 5.1(b) shall not apply to sales made
pursuant to a firm commitment underwritten public offering pursuant to a
registration statement (other than the so-called "shelf" registration
statement) under the Securities Act, such underwriter to be subject to
the Company's approval, such approval not to be unreasonably withheld.
(c) The limitation on share transfer set forth in this Section
5.1 shall terminate and Purchaser and its Affiliates shall have the
right, directly or indirectly, to sell, transfer or otherwise dispose of
any Shares without regard to any limitation on share transfer set forth
in Section 5.1 in the event that:
(i) the Company has entered into (A) a merger agreement in which
the holders of the Voting Securities would cease to hold a majority of
the voting securities of the surviving corporation, (B) an agreement to
sell all or substantially all its assets, or (C) an agreement to be
acquired, business combination, consolidation or any such similar
transaction, in each case with any Person other than a wholly-owned
subsidiary of the Company; PROVIDED, HOWEVER, the limitation shall (1)
continue if (x) the merger agreement is with a majority-owned
-16-
subsidiary of the Company and the Company is to be the surviving
corporation in the merger or (y) the majority of the directors of the
Company, who have held that position for at least nine (9) months prior
to the entering into of the merger agreement continue as the directors of
the surviving company after the merger or (2) be reinstated if such
merger agreement or other agreements referred to in sections (A), (B) or
(C) is subsequently terminated or the transactions contemplated
thereunder are not consummated;
(ii) a tender or exchange offer (other than a tender or exchange
offer that the Company's Board of Directors has recommended be rejected)
is made by any Person or 13D Group (other than an Affiliate of, or any
Person acting in concert with, Purchaser) to acquire Voting Securities
which, if added to the Voting Securities (if any) already owned by such
Person or 13D Group, would result, if consummated in accordance with its
terms, in the Beneficial Ownership by such Person or 13D Group of more
than 50% of the Total Voting Power of all Voting Securities of the
Company then outstanding, PROVIDED THAT the limitation shall be
reinstated if such tender or exchange offer is withdrawn or terminated
without such Person or 13D Group acquiring such 50% ownership level; or
(iii) a tender or exchange offer, which the Company's Board of
Directors has not approved or recommended, is made by any Person or 13D
Group (other than an Affiliate of, or any Person acting in concert with,
Purchaser) to acquire Voting Securities which, if added to the Voting
Securities (if any) already owned by such Person or 13D Group, would
result, if consummated in accordance with its terms, in the Beneficial
Ownership by such Person or 13D Group of more than 50% of the Total
Voting Power of all Voting Securities of the Company then outstanding and
the Purchaser, upon the advice of legal counsel and financial advisors,
reasonably believes in good faith, taking into account the conditions of
the offer, that such tender or exchange offer will result in Voting
Securities being purchased, PROVIDED THAT the limitation shall be
reinstated if such tender or exchange offer is withdrawn or terminated
without such Person or 13D Group acquiring such 50% ownership level.
ARTICLE VI
COVENANTS AND ADDITIONAL AGREEMENTS
Section 6.1 ORDINARY COURSE. During the period from the date of
this Agreement and continuing until the First Closing, the Company agrees
as to itself and its Subsidiaries that, except as set forth in Schedule
6.1, or to the extent that Purchaser otherwise consents in writing, the
Company and its Subsidiaries shall conduct their respective businesses in
the ordinary course in substantially the same manner as presently
conducted.
Section 6.2 ACCESS AND INFORMATION.
(a) So long as this Agreement remains in effect, prior to the
First Closing, the Company will (and will cause each of its Subsidiaries
and each of their respective accountants, counsel, consultants, officers,
directors, employees, agents and representatives of or to any of the
Subsidiaries, to) give Purchaser and its Representatives, reasonable
access during reasonable business hours to all of their respective
properties, assets, books, contracts, reports and records relating to the
Company and its Subsidiaries, and furnish to them all such
-17-
documents, records and information with respect to the properties, assets
and business of the Company and its Subsidiaries, as Purchaser
shall from time to time reasonably request. The Company will keep
Purchaser generally informed as to the business of the Company and its
Subsidiaries.
(b) So long as this Agreement remains in effect, during the
period after the First Closing and prior to the Third Closing, the
Company will (and will cause each of its Subsidiaries and each of their
respective accountants, counsel, consultants, officers, directors,
employees, agents and representatives of or to any of the Subsidiaries,
to) give Purchaser and its Representatives, reasonable access during
reasonable business hours to those of their respective properties,
assets, books, contracts, reports and records relating to the Company and
its Subsidiaries that are reasonably related to the purchase by the
Purchaser of the Company's Common Stock (the "Related Documents"), and
furnish to them such Related Documents as Purchaser shall from time to
time reasonably request. The Company will keep Purchaser generally
informed as to the business of the Company and its Subsidiaries.
Section 6.3 FURTHER ACTIONS.
(a) Each of the Company and Purchaser shall use reasonable best
efforts to take or cause to be taken all actions, and to do or cause to
be done all other things, necessary, proper or advisable in order to
fulfill and perform its obligations in respect of this Agreement and the
Registration Rights Agreement, or otherwise to consummate and make
effective the transactions contemplated hereby and thereby.
(b) Each of the Company and Purchaser shall, as promptly as
practicable, (i) make, or cause to be made, all filings and submissions
(including but not limited to under the HSR Act and foreign antitrust
filings) required under any law applicable to it or any of its
Subsidiaries, and give such reasonable undertakings as may be required in
connection therewith, and (ii) use all reasonable efforts to obtain or
make, or cause to be obtained or made, all Permits necessary to be
obtained or made by it or any of its Subsidiaries, in each case in
connection with this Agreement and the Registration Rights Agreement the
sale and transfer of the Shares pursuant hereto and the consummation of
the other transactions contemplated hereby or thereby.
(c) Each of the Company and Purchaser shall coordinate and
cooperate with the other party in exchanging such information and
supplying such reasonable assistance as may be reasonably requested by
such other party in connection with the filings and other actions
contemplated by this Agreement and the Registration Rights Agreement.
(d) At all times prior to the Third Closing Date, the Company and
Purchaser shall promptly notify each other in writing of any fact,
condition, event or occurrence that could reasonably be expected to
result in the failure of any of the conditions contained in Article VII
to be satisfied, promptly upon becoming aware of the same.
Section 6.4 FURTHER ASSURANCES. Following the First Closing Date,
the Company shall, from time to time, execute and deliver such additional
instruments, documents, conveyances or assurances and take such other
actions as shall be necessary, or otherwise reasonably be
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requested by Purchaser, to confirm and assure the rights and obligations
provided for in this Agreement and the Registration Rights Agreement
and render effective the consummation of the transactions contemplated
hereby and thereby, or otherwise to carry out the intent and purposes
of this Agreement.
Section 6.5 RIGHTS TO INFORMATION ABOUT BOARD AND THE COMPANY.
Once during each calendar quarter, at the request of Purchaser, a
Representative (which Representative shall be designated by Purchaser)
will be entitled to receive a confidential briefing from officers of the
Company concerning the Company's business and strategy, including a
report on the status of the Research Program and the Company's other
collaborative programs (to the extent not precluded by the terms and
conditions under any such collaboration program) and the Company's
consolidated corporate strategy overview, provided, however, that the
Purchaser shall have the right to request a briefing pursuant to the
terms of this Section 6.5 only at such times as the Purchaser holds at
least 1,000,000 shares of Common Stock of the Company (as such number of
shares may be adjusted to reflect any stock splits, stock dividends and
similar recapitalizations).
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 EACH PARTY'S OBLIGATIONS. The obligations of the
Company and Purchaser to consummate the transactions contemplated to
occur at each Closing shall be subject to the satisfaction prior to each
Closing of each of the following conditions, each of which may be waived
only if it is legally permissible to do so:
(a) HSR AND OTHER APPROVALS. Any applicable waiting period under
the HSR Act relating to the transactions contemplated hereby shall have
expired or been terminated, and all other material authorizations,
consents, orders or approvals of, or regulations, declarations or filings
with, or expirations of applicable waiting periods imposed by, any
Governmental Entity (including, without limitation, any foreign antitrust
filing) necessary for the consummation of the transactions contemplated
hereby, shall have been obtained or filed or shall have occurred.
(b) NO LITIGATION, INJUNCTIONS OR RESTRAINTS. No statute, rule,
regulation, executive order, decree, temporary restraining order,
preliminary or permanent injunction or other order enacted, entered,
promulgated, enforced or issued by any Governmental Entity or other legal
restraint or prohibition preventing the consummation of the transactions
contemplated by this Agreement and the Registration Rights Agreement
shall be in effect.
(c) COLLABORATION AGREEMENT. The Collaboration Agreement shall
have become effective in accordance with the terms and conditions thereof
and neither party has delivered a Breach Notice as defined in the
Collaboration Agreement thereunder, PROVIDED, HOWEVER, that the Company
and the Purchaser shall be obligated to consummate the transactions
contemplated to occur at each Closing promptly following the cure or
waiver of the material breach specified in the Breach Notice pursuant to
the terms of the Collaboration Agreement.
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(d) NASDAQ LISTING. The Shares shall have been approved for
listing on the Nasdaq Stock Market, subject only to official notice of
issuance.
Section 7.2 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The
obligations of the Company to consummate the transactions contemplated to
occur at each Closing shall be subject to the satisfaction or waiver
thereof prior to each Closing of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Purchaser that are qualified as to materiality shall be
true and correct, and those that are not so qualified shall be true and
correct in all material respects, as of the date of this Agreement and as
of the time of each Closing as though made at and as of such time, except
to the extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties that are
qualified as to materiality shall be true and correct, and those that are
not so qualified shall be true and correct in all material respects, on
and as of such earlier date) and the Company shall have received a
certificate signed by an authorized officer of Purchaser to such effect.
(b) REGISTRATION RIGHTS AGREEMENT. Purchaser shall have executed
and delivered the Registration Rights Agreement.
Section 7.3 CONDITIONS TO THE OBLIGATIONS OF PURCHASER. The
obligations of Purchaser to consummate the transactions contemplated to
occur at each Closing shall be subject to the satisfaction or waiver
thereof prior to each Closing of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth in this Agreement that are qualified
as to materiality shall be true and correct, and those that are not so
qualified shall be true and correct in all material respects, as of the
date of this Agreement and as of the time of each Closing as though made
at and as of such time, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties that are qualified as to materiality shall
be true and correct, and those that are not so qualified shall be true
and correct in all material respects, on and as of such earlier date) and
except to the extent such representations and warranties are updated by
information disclosed in Company SEC Documents filed after the date of
this Agreement and/or updated Schedules to Section 2.1 of this Agreement
provided to the Purchaser by the Company prior to the date of each
Closing, PROVIDED, HOWEVER, that the representations and warranties of
the Company set forth in Sections 2.1(a), (b), (c), (n), (o) and (q)
shall be true and correct as of the date of each Closing without giving
effect to Company SEC Documents filed after the date of this Agreement
and/or updated Schedules to Section 2.1. Purchaser shall have received a
certificate signed by the chief executive officer and chief financial
officer of the Company to such effect.
(b) OPINION OF THE COMPANY'S COUNSEL. Purchaser shall have
received the opinion dated as of each Closing of ▇▇▇▇ and ▇▇▇▇ LLP,
counsel to the Company, in form and substance reasonably satisfactory to
Purchaser.
(c) REGISTRATION RIGHTS AGREEMENT. The Company shall have
executed and delivered the Registration Rights Agreement.
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(d) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall
have performed or complied in all material respects with all obligations
and covenants required to be performed or complied with by the Company
under this Agreement and the Purchaser shall have received a certificate
signed by the chief executive officer and chief financial officer of the
Company to such effect.
(e) CORPORATE PROCEEDINGS. All corporate proceedings of the
Company in connection with the transactions contemplated by this
Agreement and the Registration Rights Agreement, and all documents and
instruments incident thereto, shall be satisfactory in form and substance
to Purchaser and its counsel, and Purchaser and its counsel shall have
received all such documents and instruments, or copies thereof, certified
or requested, as may be reasonably requested.
ARTICLE VIII
TERMINATION
Section 8.1 TERMINATION. This Agreement may be terminated at any
time prior to the Third Closing:
(a) by mutual written consent of Purchaser and the Company;
(b) by Purchaser or the Company;
(i) if the First Closing shall not have occurred prior to
December 31, 2000, PROVIDED, that the right to terminate this Agreement
pursuant to this clause (i) shall not be available to any party whose
failure to fulfill any obligation under this Agreement results in the
failure of the First Closing to occur;
(ii) if there shall be any statute, law, regulation or rule that
makes consummating the transactions contemplated hereby illegal or if any
court or other Governmental Entity of competent jurisdiction shall have
issued judgment, order, decree or ruling, or shall have taken such other
action restraining, enjoining or otherwise prohibiting the consummation
of the transactions contemplated hereby and such judgment, order, decree
or ruling shall have become final and non-appealable;
(iii) if the Collaboration Agreement shall have terminated; or
(iv) in the event that either (a) the United States Federal Trade
Commission ("FTC") and/or the United States Department of Justice shall
seek a preliminary injunction under the HSR Act against the Company and
the Purchaser to enjoin the transactions contemplated by this Agreement,
the Collaboration Agreement, the Technology Transfer Agreement between
the Company and the Purchaser dated as of the date hereof (the
"Technology Transfer Agreement") and/or the Technology Development
Agreement between the Company and the Purchaser dated as of the date
hereof (the "Technology Development Agreement"), or (b) the HSR Clearance
Date shall not have occurred on or prior to December 31, 2000 (as used
above, "HSR Clearance Date" shall mean the earlier of (i) the date on
which the FTC shall notify the Company and the Purchaser of early
termination of the applicable waiting
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period under the HSR Act or (ii) the day after the date on which
the applicable waiting period under the HSR Act expires); or
(c) by Purchaser
(i) if the Company shall have failed to perform in any material
respect any of its obligations hereunder or shall have breached in any
respect any representation or warranty contained herein qualified by
materiality or shall have breached in any material respect any
representation or warranty not so qualified, and the Company has failed
to perform such obligation or cure such breach, within 30 days of its
receipt of written notice thereof from Purchaser, and such failure to
perform shall not have been waived in accordance with the terms of this
Agreement;
(ii) if any of the conditions set forth in Section 7.1 or 7.3
shall become impossible to fulfill (other than as a result of any breach
by Purchaser of the terms of this Agreement) and shall not have been
waived in accordance with the terms of this Agreement; or
(iii) if the Common Stock shall no longer be listed for trading
on the Nasdaq National Market or other national securities exchange or
automated quotation system;
(d) by the Company:
(i) if Purchaser shall have failed to perform in any material
respect any of its obligations hereunder or shall have breached in any
respect any representation or warranty contained herein qualified by
materiality or shall have breached any material respect any
representation or warranty not so qualified, and Purchaser has failed to
perform such obligation or cure such breach, within 30 days of its
receipt of written notice thereof from the Company, and such failure to
perform shall not have been waived in accordance with the terms of this
Agreement; or
(ii) if any of the conditions set forth in Section 7.1 or 7.2
shall become impossible to fulfill (other than as a result of any breach
by the company of the terms of this Agreement) and shall not have been
waived in accordance with the terms of this Agreement;
Section 8.2 EFFECT OF TERMINATION. In the event of termination of
this Agreement by either the Company or Purchaser as provided in Section
8.1, this Agreement shall forthwith become void and have no effect,
without any liability or obligation on the part of Purchaser or the
Company, other than the provisions of this Section 8.2, Section 11.9 and
Article IX and except to the extent that such termination results from
the willful and material breach by a party of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
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ARTICLE IX
INDEMNIFICATION
Section 9.1 INDEMNIFICATION OF PURCHASER. The Company covenants
and agrees to defend, indemnify and hold harmless each of Purchaser, its
Affiliates (other than the Company and any of its Subsidiaries), and
their respective officers, directors, partners, employees, agents,
advisers and representatives (collectively, the "Purchaser Indemnities")
from and against, and pay or reimburse the Purchaser Indemnitees for, any
and all claims, demands, liabilities, obligations, losses, costs,
expenses, fines or damages (whether absolute, accrued, conditional or
otherwise and whether or not resulting from third party claims),
including interest and penalties with respect thereto and all expenses
incurred in the investigation or defense of any of the same or in
asserting, preserving or enforcing any of their respective rights
hereunder (collectively, "Losses"), resulting from or based on (or
allegedly resulting from or based on) any breach by the Company of any
representation, warranty, covenant or obligation of the Company
hereunder. The Losses described in this Section 9.1 are herein referred
to as "Purchaser Indemnifiable Losses". The Company shall reimburse the
Purchaser Indemnitees for any legal or other expenses incurred by such
Purchaser Indemnitees in connection with investigating or defending any
such Purchaser Indemnifiable Losses as such expenses are incurred.
Section 9.2 INDEMNIFICATION PROCEDURES. Promptly after receipt by
a Purchaser Indemnitee of notice of the commencement of any action or the
written assertion of any claim, such Purchaser Indemnitee shall, if a
claim in respect thereof is to be made against the Company, as the case
may be (the "Indemnifying Person"), notify the Indemnifying Person in
writing of the commencement or the written assertion thereof. Failure by
a Purchaser Indemnitee to so notify the Indemnifying Person shall relieve
the Indemnifying Person from the obligation to indemnify such Purchaser
Indemnitee only to the extent that the Indemnifying Person suffers actual
and material prejudice as a result of such failure but in no event shall
such failure to notify the Indemnifying Person (i) constitute prejudice
suffered by the Indemnifying Person if it has otherwise received notice
of the actions giving rise to such obligation to indemnify or (ii)
relieve it from any liability or obligation that it may otherwise have to
such Purchaser Indemnitee. In case any such action or claim shall be
brought or asserted against any Purchaser Indemnitee and it shall notify
the Indemnifying Person of the commencement or assertion thereof, the
Indemnifying Person shall be entitled to participate therein but the
defense of such action or claim shall be conducted by counsel to the
Purchaser Indemnitee, that the Indemnifying Person shall not, in
connection with any one such action or proceeding or separate but
substantially similar actions or proceedings arising out of the same
general allegations, be liable for the fees and expenses of more than one
separate firm of attorneys at any time for all Purchaser Indemnitees,
except to the extent that local counsel, in addition to regular counsel,
is required in order to effectively defend against such action or
proceeding and provided in that a Purchaser Indemnitee shall not enter
into any settlement of any such claim without the prior consent of the
Company, such consent not to be unreasonably withheld or delayed. In no
event shall the Company be liable under this Article IX, and the
Company's obligation to defend, indemnify and hold harmless the Purchaser
Indemnitee shall not apply to: (a) any special, incidental or
consequential damages resulting from or based upon any breach by the
Company of any representation, warranty, covenant or obligation of the
Company hereunder, (b) any Purchaser Indemnifiable Losses until the
aggregate amount of such Losses exceeds $5,000,000, and (c) any
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Purchaser Indemnifiable Losses in excess of $50,000,000. The
remedies set forth in this Article 9 are cumulative and shall not be
construed to restrict or otherwise affect any other remedies that may be
available to a Purchaser Indemnitee or a Party under any other agreement,
pursuant to statutory or common law or equity. Notwithstanding anything
to the contrary in this Agreement, any claim for indemnification under
this Article IX must be brought prior to the second anniversary of the
First Closing Date, except for claims relating to the representations and
warranties in Sections 2.1(d), 2.1(k) and 2.1(m) which can be brought any
time prior to the expiration of the applicable statute of limitations.
Section 9.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Company contained in this Agreement
shall expire for all purposes on the second anniversary of the First
Closing Date, except for the representations and warranties contained in
Sections 2.1(d), 2.1(k) and 2.1(m) which shall expire for all purposes
upon expiration of the applicable statute of limitations.
ARTICLE X
INTERPRETATION; DEFINITIONS
Section 10.1 INTERPRETATION. As used in this Agreement, unless
the context otherwise requires:
(a) any reference to the Company and its Subsidiaries means the
Company and each of its Subsidiaries;
(b) words of any gender include all genders;
(c) words using the singular or plural number also include the
plural or singular number, respectively; and
(d) the terms "hereof", "herein", and "hereby" and derivative or
similar words refer to this entire Agreement.
Section 10.2 DEFINITIONS. For purposes of this Agreement, the
following terms shall have the following meanings:
"13D GROUP" is defined in Section 4.1(e).
"AFFILIATE" shall have the meaning set forth in the Collaboration
Agreement.
"AGREEMENT" is defined in the recitals to this agreement.
"BENEFICIALLY OWNED," "BENEFICIAL OWNERSHIP" or any like
expression with respect to any securities means having "beneficial
ownership" of such securities (as determined pursuant to Rule l3d-3 under
the Exchange Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing.
-24-
"BUSINESS DAY" means any day on which banking institutions are open
in Boston, Massachusetts and Frankfurt, Germany.
"CLOSING" is defined in Section 1.2(c).
"CODE" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, as amended.
"COLLABORATION AGREEMENT" is defined in the recitals to this
Agreement.
"COMMON STOCK" is defined in the recitals to this Agreement.
"COMPANY" is defined in the recitals to this Agreement.
"COMPANY INTELLECTUAL PROPERTY" is defined in Section 2.1(p).
"COMPANY STOCK PLANS" is defined in Section 2.1(d).
"COMPANY SEC DOCUMENTS" is defined in Section 2.1(f).
"CONTRACT" is defined in Section 2.1(c).
"EMPLOYEE" means any employee or former employee of the Company or
any of its Subsidiaries or any beneficiary or dependent of any such
employee or former employee.
"EMPLOYEE BENEFIT PLANS" means all defined contribution, defined
benefit, welfare benefit, bonus, incentive compensation, stock option,
stock purchase, stock appreciation right, stock bonus, incentive,
deferred compensation, insurance, medical, dental, vision, life, death
benefit, fringe benefit or other employee benefit plans, programs,
policies or arrangements, including without limitation, any employment,
consulting, offer, secondment, severance or other termination agreement,
whether or not an employee benefit plan within the meaning of section
3(3) of ERISA, maintained by the Company or any of its Subsidiaries.
"ENVIRONMENTAL LAWS" is defined in Section 2.1(m).
"ENVIRONMENTAL PERMIT" is defined in Section 2.1(m).
"EQUITY SECURITY" means (i) any Common Stock or other Voting
Securities, (ii) any securities of the Company convertible into or
exchangeable for Common Stock or other Voting Securities or (iii) any
options, rights or warrants (or any similar securities) issued by the
Company to acquire Common Stock or other Voting Securities.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute and the rules and regulations
of the SEC promulgated thereunder, all as the same shall be in effect
from time to time.
"FIRST CLOSING" is defined in Section 1.1(a).
-25-
"FIRST CLOSING DATE" is defined in Section 1.2(a).
"FIRST CLOSING PURCHASE PRICE" is defined in Section 1.1(a).
"FIRST CLOSING SHARES" is defined in Section 1.1(a).
"FTC" is defined in Section 8.1(b).
"GAAP" means United States generally accepted accounting principles.
"GOVERNMENTAL ENTITY" is defined in Section 2.1(c).
"HAZARDOUS SUBSTANCES" is defined in Section 2.1(m).
"HSR ACT" is defined in Section 2.1(c).
"HSR CLEARANCE DATE" is defined in Section 8.3(c).
"INDEMNIFYING PERSON" is defined in Section 9.2.
"INTELLECTUAL PROPERTY" means trademarks, trade names, trade dress,
service marks, copyrights, domain names, and similar rights (including
registrations and applications to register or renew the registration of
any of the foregoing), patents and patent applications, trade secrets,
ideas, inventions, improvements, practices, processes, formulas, designs,
know-how, confidential business and technical information, computer
software, firmware, data and documentation, licenses of or agreements
relating to any of the foregoing, rights of privacy and publicity, moral
rights, and any other similar intellectual property rights and tangible
embodiments of any of the foregoing (in any medium including electronic
media.)
"INTELLECTUAL PROPERTY LICENSE" means any license, permit,
authorization, approval, Contract or consent granted, issued by or with
any Person relating to the use of Intellectual Property.
"IRS" means the Internal Revenue Service.
"KNOWLEDGE OF THE COMPANY", "KNOWLEDGE OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES" or any like expression means to the actual knowledge of the
persons listed on Schedule 10.2.
"LIEN" is defined in Section 2.1(c).
"LOSSES" is defined in Section 9.1.
"MATERIAL ADVERSE EFFECT" on or with respect to an entity (or group
of entities taken as a whole) means any state of facts, event, change or
effect that has had, or would reasonably be expected to have, a material
adverse effect on (a) the business, properties, results of operations or
financial condition of such entity (or, if with respect thereto, of such
group of entities taken as a whole), or (b) the ability of such entity
(or group of entities) to consummate the transactions contemplated under
this Agreement or the Registration Rights Agreement.
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"MATERIAL CONTRACT" is defined in Section 2.1(j).
"NEW SECURITY" means any Equity Security issued by the Company after
the First Closing; provided that "New Security" shall not include (i) any
securities issuable upon conversion of any convertible Equity Security
outstanding as of the Effective Date or as to which convertible Equity
Security Purchaser previously received an offer to purchase its Pro Rata
Share pursuant to Section 3.1 hereof, (ii) any securities issuable upon
exercise of any option, warrant or other similar Equity Security
outstanding as of the Effective Date or as to which option, warrant or
similar Equity Security Purchaser previously received an offer to
purchase its Pro Rata Share pursuant to Section 3.1 hereof, or (iii) any
securities issuable in connection with any stock split, stock dividend or
recapitalization of the Company where such securities are issued to all
stockholders of the Company on a pro rata basis.
"PERMIT" is defined in Section 2.1(c).
"PERMITTED LIENS" means those Liens (A) securing debt that is
reflected on the balance sheets or the notes thereto contained in the
Company SEC Documents filed with the SEC and publicly available prior to
the date hereof, (B) referred to in Schedule 2.1(j), (c) for Taxes not
yet due or payable or being contested in good faith and for which
adequate reserves have been established in accordance with GAAP, (D) that
constitute mechanics', carriers', workmens' or like liens, liens arising
under original purchase price conditional sales contracts and equipment
leases with third parties entered into in the ordinary course, (E) Liens
incurred or deposits made in the ordinary course of business consistent
with past practice in connection with workers' compensation, unemployment
insurance and social security, retirement and other legislation and (F)
easements, covenants, declarations, rights or way, encumbrances, or
similar restrictions in connection with real property owned by the
Company of any of its Subsidiaries that do not materially impair the use
of such real property by the Company and any of its Subsidiaries, and in
the case of Liens described in clauses (B), (C), (D), (E) or (F) that
individually or in the aggregate, would not have a material Adverse
Effect on the Company and its Subsidiaries, taken as a whole.
"PERSON" means any individual, partnership, joint venture,
corporation, limited liability company, trust, unincorporated
organization, government or department or agency of a government or other
entity.
"PHARMACEUTICAL ALLIANCES" means a research, development,
commercialization and/or similar agreement or arrangement between the
Company and a pharmaceutical, biopharmaceutical, biotechnology or similar
entity in which Equity Securities are sold to such entity or an Affiliate
of such entity.
"PLANS" is defined in Section 2.1(1).
"PRO RATA SHARE" means the fraction of an entire issuance of New
Securities, the numerator of which shall be the number of shares of
Common Stock and other Voting Securities owned by Purchaser and its
Affiliates (other than the Company and its Subsidiaries) on a
fully-diluted basis immediately prior to such issuance of such New
Securities and the denominator of which shall be the aggregate number of
shares of Common Stock and other Voting Securities
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outstanding on a fully-diluted basis (giving effect to the
conversion of all then-outstanding options, warrants and other
convertible securities) immediately prior to such issuance of such New
Securities.
"PURCHASER" is defined in the recitals to this Agreement.
"PURCHASER INDEMNIFIABLE LOSSES" is defined in Section 9.1.
"PURCHASER INDEMNITEES" is defined in Section 9.1.
"REGISTRATION RIGHTS AGREEMENT" is defined in the recitals to this
Agreement.
"REPRESENTATIVE" means an agent or employee of Purchaser, or of an
independent public accounting firm, law firm, or other consulting company
or advisor of Purchaser.
"RESEARCH AND DEVELOPMENT FUNDING TRANSACTION" means a transaction
to raise funding for the research and development of one or more specific
products, products in one or more disease areas and/or one or more
specific technologies, in each case structured as an "off balance sheet"
financing. Examples of Research and Development Funding Transactions are
R&D partnerships, SWORDs and SPARCs.
"RESEARCH PROGRAM" shall have the meaning set forth in the
Collaboration Agreement.
"RESEARCH PROGRAM TERM" shall have the meaning set forth in the
Collaboration Agreement.
"SEC" means the Securities and Exchange Commission.
"SECOND CLOSING" is defined in Section 1.1(b).
"SECOND CLOSING DATE" is defined in Section 1.2(b).
"SECOND CLOSING PURCHASE PRICE" is defined in Section 1.1(b).
"SECOND CLOSING SHARES" is defined in Section 1.1(b).
"SECURITIES ACT" means the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the SEC
promulgated thereunder, all as the same shall be in effect from time to
time.
"SHARES" is defined in Section 1.1(c).
"SUBSIDIARY" means, as to any Person, any corporation at least a
majority of the shares of stock of which having general voting power under
ordinary circumstances to elect a majority of the Board of Directors of such
corporation (irrespective of whether or not at the time stock of any other class
or classes shall have or might have voting power by reason of the happening of
any contingency) is, at the time as of which the determination is being made,
owned by such Person, or one or more of its Subsidiaries or by such Person and
one or more of its Subsidiaries.
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"SUBSCRIPTION NOTICE" is defined in Section 3.1.
"TAXES" is defined in Section 2.1(k).
"TAX RETURNS" is defined in Section 2.1(k).
"TECHNOLOGY DEVELOPMENT AGREEMENT" is defined in Section 8.1(b).
"TECHNOLOGY TRANSFER AGREEMENT" is defined in Section 8.1(b).
"THIRD CLOSING" is defined in Section 1.1(c).
"THIRD CLOSING DATE" is defined in Section 1.2(c).
"THIRD CLOSING PURCHASE PRICE" is defined in Section 1.1(c).
"THIRD CLOSING SHARES" is defined in Section 1.1(c).
"TOTAL VOTING POWER" means at any time the total combined voting
power in the general election of directors of all the Voting Securities
then outstanding.
"VOTING SECURITIES" means at any time shares of any class of capital
stock of the Company which are then entitled to vote generally in the
election of directors.
ARTICLE XI
MISCELLANEOUS
Section 11.1 GOVERNING LAW. This Agreement shall be construed and
the respective rights of the parties determined according to the
substantive laws of the State of Delaware notwithstanding the provisions
governing conflict of laws under such Delaware law to the contrary,
except matters of intellectual property law which shall be determined in
accordance with the intellectual property laws relevant to the
intellectual property in question.
Section 11.2 ASSIGNMENT. Neither the Company nor the Purchaser may
assign this Agreement in whole or in part without the consent of the
other, except if such assignment occurs in connection with the sale or
transfer (by merger or otherwise) of all or substantially all of the
business and assets of the Company or the Purchaser to which the subject
matter of this Agreement pertains, provided that the acquirer confirms to
the other party in writing its agreement to be bound by all of the terms
and conditions of this Agreement. Notwithstanding the foregoing, either
party may assign this Agreement to an Affiliate, provided that such party
shall guarantee the performance of such Affiliate, and provided further
that either party may assign its rights (but not its obligations)
pursuant to this Agreement in whole or in part to an Affiliate of such
party that is controlled by such party.
Section 11.3 AMENDMENTS. This Agreement constitute the entire
agreement between the parties with respect to the subject matter hereof,
and supersede all previous arrangements with respect to the subject
matter hereof, whether written or oral. The parties also acknowledge
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the simultaneous execution and delivery of the Transaction
Agreements, none of which shall be superseded by this Agreement. Any
amendment or modification to this Agreement shall be made in writing
signed by both parties.
Section 11.4 NOTICES.
Notices to the Company shall be addressed to:
Millennium Pharmaceuticals, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices to the Purchaser shall be addressed to:
Aventis Pharmaceuticals Inc.
▇▇▇▇▇ ▇▇▇-▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Vice President, Legal Corporate Development
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Either Party may change its address to which notices shall be sent
by giving notice to the other Party in the manner herein provided. Any
notice required or provided for by the terms of this Agreement shall be
in writing and shall be (a) sent by registered or certified mail, return
receipt requested, postage prepaid, (b) sent via a reputable overnight
courier service, or (c) sent by
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facsimile transmission, in each case properly addressed in
accordance with the paragraph above. The effective date of notice shall
be the actual date of receipt by the Party receiving the same.
Section 11.5 PUBLIC ANNOUNCEMENTS. The provisions of Section 14.9 of
the Collaboration Agreement shall govern any and all public statements
with respect to the transactions contemplated by this Agreement.
Section 11.6 NO STRICT CONSTRUCTION. This Agreement has been
prepared jointly and shall not be strictly construed against either
Party.
Section 11.7 HEADINGS. The captions or headings of the sections or
other subdivisions hereof are inserted only as a matter of convenience or
for reference and shall have no effect on the meaning of the provisions
hereof.
Section 11.8 NO IMPLIED WAIVERS; RIGHTS CUMULATIVE. No failure on
the part of the Company or the Purchaser to exercise, and no delay in
exercising, any right, power, remedy or privilege under this Agreement,
or provided by statute or at law or in equity or otherwise, shall impair,
prejudice or constitute a waiver of any such right, power, remedy or
privilege or be construed as a waiver of any breach of this Agreement or
as an acquiescence therein, nor shall any single or partial exercise of
any such right, power, remedy or privilege preclude any other or further
exercise thereof or the exercise of any other right, power, remedy or
privilege.
Section 11.9 SEVERABILITY. If any provision hereof should be held
invalid, illegal or unenforceable in any respect in any jurisdiction, the
parties hereto shall substitute, by mutual consent, valid provisions for
such invalid, illegal or unenforceable provisions which valid provisions
in their economic effect are sufficiently similar to the invalid, illegal
or unenforceable provisions that it can be reasonably assumed that the
parties would have entered into this Agreement with such valid
provisions. In case such valid provisions cannot be agreed upon, the
invalid, illegal or unenforceable of one or several provisions of this
Agreement shall not affect the validity of this Agreement as a whole,
unless the invalid, illegal or unenforceable provisions are of such
essential importance to this Agreement that it is to be reasonably
assumed that the parties would not have entered into this Agreement
without the invalid, illegal or unenforceable provisions.
Section 11.10 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in counterparts, each of which counterparts, when so executed
and delivered, shall be deemed to be an original, and all of which
counterparts, taken together, shall constitute one and the same
instrument.
Section 11.11 NO THIRD PARTY BENEFICIARIES. No person or entity
other than the Purchaser, the Company and their respective Affiliates and
permitted assignees hereunder shall be deemed an intended beneficiary
hereunder or have any right to enforce any obligation of this Agreement.
Section 11.12 SPECIFIC ENFORCEMENT. Purchaser, on the one hand, and
the Company, on the other, acknowledge and agree that irreparable damage
would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or
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were otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent breaches of
the provisions hereof in any court of the United States or any state
thereof having jurisdiction, this being in addition to any other remedy
to which they may be entitled at law or equity.
Section 11.13 COOPERATION. Purchaser and the Company agree to take,
or cause to be taken, all such further or other actions as shall
reasonably be necessary to make effective and consummate the transactions
contemplated by this Agreement, including, without limitation, making all
required filings under the HSR Act, if any.
Section 11.14 EXPENSES AND REMEDIES. Whether or not the Closing
takes place, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be borne by the
party incurring such expense.
Section 11.15 TRANSFER OF SHARES. Purchaser understands and agrees
that the Shares have not been registered under the Securities Act or the
securities laws of any state and that they may be sold or otherwise
disposed of only in one or more transactions registered under the
Securities Act and, where applicable, such laws or as to which an
exemption from the registration requirements of the Securities Act and,
where applicable, such laws is available. Purchaser acknowledges that
except as provided in the Registration Rights Agreement, Purchaser has no
right to require the Company to register the Shares and understands and
agrees that each certificate representing the Shares (other than, with
respect to the first legend, Shares that are no longer subject to the
provisions of Article V and other than, with respect to the second
legend, Shares which have been transferred in a transaction registered
under the Securities Act or exempt from the registration requirements of
the Securities Act pursuant to Rule 144 thereunder or any similar rule or
regulation) shall bear the following legends:
"THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED BY AN AGREEMENT ON FILE AT THE
OFFICE OF THE CORPORATION."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS."
and Purchaser agrees to transfer the Shares only in accordance with the
provisions of such legends.
[The remainder of this page has intentionally been left blank.]
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IN WITNESS WHEREOF, PURCHASER and the COMPANY have caused this
Agreement to be executed as of the day and year first above written.
AVENTIS PHARMACEUTICALS INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
Title: Executive Vice President
MILLENNIUM PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Business Officer
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