EXHIBIT 10.91
AGREEMENT REGARDING
REGISTRATION RIGHTS AND RELATED OBLIGATIONS
This Agreement Regarding Registration Rights and Related Obligations
(this "Agreement") is entered into this _____ day of _____________, 199__,
between Interneuron Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), and Swiss Bank Corporation, a Swiss banking corporation, acting by
and through its London Branch ("SBC").
WHEREAS, on _______________, 1997, the Company issued to SBC, and SBC
acquired from the Company, the Call Warrant, as defined in Section 1.1 hereof,
in consideration of a capped call option issued on that date by SBC to the
Company, as well as the other undertakings and obligations of the Company set
forth in the Call Warrant; and
WHEREAS, pursuant to the terms and conditions of the Call Warrant, on
____________, 199__ or such later date as is established pursuant to the Call
Warrant (the "Maturity Date"), SBC has the right to purchase from the Company,
and, upon exercise of that right by SBC, the Company has the obligation, at its
election, either (i) to sell to SBC, at the exercise price provided for in the
Call Warrant, the number of shares of the Company's common stock, par value
$.001 per share (the "Common Stock"), underlying the Call Warrant ("Physical
Settlement") or (ii) to pay to SBC an amount of cash calculated as provided in
the Call Warrant ("Cash Settlement"); and
WHEREAS, pursuant to the terms and conditions of the Call Warrant, in
the event the Company elects to discharge its obligations thereunder by Physical
Settlement, the Company and SBC shall enter into this Agreement; and
WHEREAS, the Company has elected to discharge its obligations under the
Call Warrant by Physical Settlement;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the Company and SBC hereby agree as follows:
ARTICLE I DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
1.1 Call Warrant. "Call Warrant" shall mean the warrant to purchase
Common Stock issued by the Company to SBC pursuant to the terms and conditions
of the Confirmation.
1.2 Commission. "Commission" shall mean the United States Securities
and Exchange Commission or any successor agency thereto.
1.3 Confirmation. "Confirmation" shall mean the confirmation setting
forth the terms of the Call Warrant, together with the Master Agreement
incorporated therein, dated as of _________________.
1.4 Exchange Act. "Exchange Act" shall mean the United States
Securities Exchange Act of 1934, as amended.
1.5 Local Business Day. "Local Business Day" shall mean a day on which
commercial banks are open for business (including dealings in foreign exchange
and foreign currency deposits) in New York, New York.
1.6 Preliminary Prospectus. "Preliminary Prospectus" shall mean any
preliminary prospectus, including all documents incorporated by reference
therein, included in the Registration Statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission under the
Securities Act; any reference to any amendment or supplement to the Preliminary
Prospectus shall be deemed to include any documents filed under the Exchange Act
after the date of such Preliminary Prospectus and incorporated by reference
therein; and any reference to the Preliminary Prospectus as amended or
supplemented shall be deemed to include the Preliminary Prospectus as amended or
supplemented by any such documents filed under the Exchange Act after the date
of such Preliminary Prospectus and incorporated by reference therein.
1.7 Prospectus. "Prospectus" shall mean any prospectus, including all
documents incorporated by reference therein, (i) included in the Registration
Statement as of the time that the Registration Statement is declared effective
or (ii) filed with the Commission in connection with the Registration Statement
pursuant to Rule 424(b) of the rules and regulations of the Commission under the
Securities Act; any reference to any amendment or supplement to the Prospectus
shall be deemed to include any documents filed under the Exchange Act after the
date of such Prospectus and incorporated by reference therein; and any reference
to the Prospectus as amended or supplemented shall be deemed to include the
Prospectus as amended or supplemented by any such documents filed under the
Exchange Act after the date of such Prospectus and incorporated by reference
therein.
1.8 Registration Statement. "Registration Statement" shall mean a
registration statement on Form S-3 (or any applicable successor form then in
effect; provided that if, at the time a registration statement is to be filed,
the Company is not eligible to use Form
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S-3 or applicable successor form for a primary offering by or on behalf of the
Company, "Registration Statement" shall mean a registration statement on such
form as is then available to the Company), which is to be filed with the
Commission pursuant to Section 4.1 hereof, covering the resale of the Shares
from time to time, including all exhibits thereto and all documents incorporated
by reference in the Prospectus contained in such Registration Statement at the
time it is declared effective, each as amended at the time the Registration
Statement is declared effective.
1.9 Securities Act. "Securities Act" shall mean the United States
Securities Act of 1933, as amended.
1.10 Shares. "Shares" shall mean the shares of Common Stock issuable
upon exercise of the Call Warrant.
1.11 Termination Date. "Termination Date" shall mean the second
anniversary of the Maturity Date.
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to SBC that the following are true
and correct as of the date hereof and as of the "Settlement Date" (as that term
is defined in the Confirmation):
2.1 Organization and Existence of the Company. The Company has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with power and authority (corporate and
other) to own its properties and conduct its business as described in the 1934
Act Reports, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which the ownership or leasing of properties, or the conduct of
its business requires such qualification, except to the extent the failure to be
so qualified would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; and each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation and is in good standing
under the laws of its jurisdiction of incorporation, except where the failure to
be so would not have a material adverse effect on the Company and the
subsidiaries taken as a whole.
2.2 Authorization of Transactions and Agreement. The execution,
delivery and performance of this Agreement have been duly authorized by the
board of directors of the Company. Assuming the due execution thereof by SBC,
this Agreement constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms (except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting enforcement of creditors' rights and the application of equitable
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principles in any action, legal or equitable, and except as rights to indemnity
or contribution may be limited by applicable law). The Company has the corporate
power to execute and deliver this Agreement and to consummate the transactions
contemplated herein.
2.3 Capitalization. (a) As of __________, 199__, the authorized capital
stock of the Company consists of (i) ___________ shares of Common Stock and (ii)
_________ shares of preferred stock, par value $.001 per share (the "Preferred
Stock"). As of _______, 199__, ______________ shares of Common Stock (of which
__________ shares are treasury shares) and _________ shares of Preferred Stock
were issued and outstanding. In addition, as of __________, 199__, the following
shares of Common Stock were reserved for issuance upon [SPECIFY RESERVED
SHARES].
(b) The outstanding shares of Common Stock have been duly and validly
authorized and issued and are fully paid and non-assessable. The Company's
stockholders have no preemptive rights with respect to the Shares. All of the
issued shares of capital stock of each subsidiary of the Company that is a
"significant subsidiary" (as defined in Rule 12b-2 under the Exchange Act) have
been duly and validly authorized and issued, are fully paid and non-assessable,
and all such shares that are owned directly or indirectly by the Company are
owned free and clear of all liens, encumbrances, equities or claims, with such
exceptions as would not have a material adverse effect on the Company's
ownership interest in a significant subsidiary.
(c) The Shares have been duly authorized and, when issued and delivered
upon exercise of the Call Warrant in accordance with the terms and conditions
thereof, will be validly issued, fully paid and nonassessable.
2.4 SEC Filings and Financial Statements. (a) The Company has
heretofore delivered to SBC copies of the Company's (i) Annual Report on Form
10-K for the fiscal year ended [THEN MOST RECENTLY ENDED FISCAL YEAR], and (ii)
the proxy statement for its 199__ Annual Meeting of Stockholders, in each case,
substantially in the form filed by the Company with the Commission
(collectively, together with any other reports filed, as of the date of this
Agreement, by the Company under the Exchange Act and the rules and regulations
of the Commission since [TWO YEARS BEFORE DATE IN CLAUSE (I)] (the "1934 Act
Reports"). All of the 1934 Act Reports have complied in all material respects,
as of their respective filing dates, with all applicable requirements of the
Exchange Act and the related rules and regulations thereunder. As of their
respective filing dates, none of the 1934 Act Reports contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Any amending,
correcting or superseding statement made in any subsequent 1934 Act Report shall
be effective for this purpose only with respect to the period after the filing
of such subsequent 1934 Act Report.
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(b) The audited consolidated financial statements and unaudited interim
financial statements of the Company contained or incorporated by reference in
the Company's 1934 Act Reports have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis and, together with
the notes thereto, present fairly the consolidated financial position of the
Company and its subsidiaries at the dates shown and the consolidated results of
their operations, changes in stockholders' equity and cash flows for the periods
then ended.
2.5 No Material Adverse Change. Neither the Company nor any of its
significant subsidiaries has sustained since the date of the latest audited
financial statements included or incorporated by reference in the 1934 Act
Reports any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the 1934 Act Reports. Since the date of the
latest audited financial statements included or incorporated by reference in the
1934 Act Reports, and except as may be set forth or contemplated in the 1934 Act
Reports, there has not been (i) any material change in the capital stock of the
Company (other than a change solely attributable to, or resulting from, the
issuance of Common Stock pursuant to a director, officer or employee stock
option, benefit or compensation plan), (ii) any material increase in the
short-term or long-term consolidated debt of the Company and its consolidated
subsidiaries on a consolidated basis or (iii) any material adverse change, or
any development involving a prospective material adverse change, in the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, that could
reasonably be expected to require disclosure in a primary public offering of
Common Stock by the Company under the Securities Act.
2.6 No Conflicts. The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
sale/leaseback agreement, loan agreement, similar financing agreement or
instrument or other agreement or instrument to which the Company or any of its
significant subsidiaries is a party or by which the Company or any of its
significant subsidiaries is bound or to which any of the property or assets of
the Company or any of its significant subsidiaries is subject, except for such
conflicts, breaches or violations as would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole, or on the transactions
contemplated by this Agreement or the Confirmation; nor will such actions result
in any violation of the provisions of the Certificate of Incorporation or
by-laws of the Company or any statute applicable to the Company or any of its
significant subsidiaries or any order, judgment, decree, rule or
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regulation applicable to the Company or any of its significant subsidiaries of
any court or governmental agency or body having jurisdiction over the Company or
any of its significant subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the consummation by
the Company of the transactions contemplated by this Agreement, except such as
may be required under the Securities Act prior to the resale of Shares and any
such consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
resale of Shares.
2.7 Litigation. Other than as set forth or contemplated in the 1934 Act
Reports, there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if determined adversely
to the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries; and to the Company's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others.
2.8 Independence of Public Accountants. Coopers & ▇▇▇▇▇▇▇ LLP, who have
audited certain financial statements of the Company and its consolidated
subsidiaries, are independent public accountants as required by the Securities
Act and the Exchange Act and the rules and regulations of the Commission
thereunder.
2.9 Not an Investment Company. The Company is not an "investment
company" as such term is defined under the Investment Company Act of 1940, as
amended.
2.10 No Registration Rights. Except as provided in Schedule 2.10
hereto, or in other agreements with SBC, no person has any right to request or
demand to have any shares of Common Stock or other securities of the Company
registered pursuant to the Registration Statement or another registration
statement pursuant to the Securities Act.
2.11 Registrant Requirements for Form S-3. The Company meets the
registrant requirements of General Instruction I.A. of Form S-3 under the
Securities Act, as in effect on the date of this Agreement.
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SBC
SBC represents and warrants to the Company that the following are true
and correct as of the date hereof and as of the Settlement Date:
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3.1 Organization and Existence of SBC. SBC is a banking corporation
organized under the laws of Switzerland, with power and authority (corporate and
other) to own its properties and conduct its business.
3.2 Authorization of Transactions and Agreement. The execution,
delivery and performance of this Agreement have been duly authorized by SBC.
Assuming the due execution thereof by the Company, this Agreement constitutes
the legal, valid and binding obligation of SBC, enforceable against SBC in
accordance with its terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application relating to or affecting enforcement of creditors' rights
and the application of equitable principles in any action, legal or equitable,
and except as rights to indemnity or contribution may be limited by applicable
law). SBC has the corporate power to execute and deliver this Agreement and to
consummate the transactions contemplated herein.
3.3 No Conflicts. The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any agreement or instrument to which SBC is a party
or by which SBC is bound or to which any of the property or assets of SBC is
subject, nor will such action result in any violation of the charter or by-laws
of SBC or any statute or any order, judgment, decree, rule or regulation of any
court or governmental agency or body having jurisdiction over SBC or any of its
properties, except for such conflicts, breaches or violations as would not have
a material adverse effect on the transactions contemplated by this Agreement or
the Confirmation; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body is
required for the consummation by SBC of the transactions contemplated by this
Agreement, except such as may be required under the Securities Act prior to the
resale of Shares and any such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky laws in
connection with the resale of Shares.
ARTICLE IV AGREEMENTS OF THE COMPANY
The Company agrees, with respect to the period beginning on the date
hereof through and including the earlier of the Termination Date or the date on
which the Company receives written notice from SBC that all of the Shares have
been resold (except that the provisions of Section 4.9 may continue by its terms
after such date), as follows:
4.1 Filing of Registration Statement. (a) The Company has filed or
shall expeditiously file with the Commission a registration statement, covering
the resale of the Shares from time to time by SBC and such affiliated entities
as SBC may designate on
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securities exchanges or over-the-counter or in such other lawful manner as SBC
may specify, in a form previously reviewed by SBC.
(b) If such registration statement has not yet become effective, the
Company shall use its best efforts to cause such registration statement to
become effective no later than the Maturity Date. The Company shall (i) use its
best efforts to cause such registration statement to remain in effect until the
earlier of the Termination Date or the date on which the Company receives
written notice from SBC that all of the Shares have been resold, (ii) inform SBC
promptly upon notice from the Commission that the Registration Statement has
been declared effective, (iii) advise SBC promptly of any proposed amendment or
supplement to the Prospectus after the effective date thereof and furnish SBC
with a draft prior to the filing thereof, (iv) for so long as delivery of a
prospectus is required in connection with the offering or sale of any of the
Shares, (A) unless the Company is legally required to so amend or supplement the
Prospectus, make no further amendment or any supplement to the Prospectus (other
than any such amendment or supplement resulting from the filing of reports or
statements under the Exchange Act which are incorporated by reference in the
Prospectus) after the effective date thereof to which SBC reasonably objects
within two business days after receipt of a draft of the proposed amendment or
supplement and (B) file promptly all reports and any definitive proxy or
information statements required to be filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act, (v) during such same period,
advise SBC, promptly after the Company receives notice thereof, (A) of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed with the Commission, (B) of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any prospectus
relating to the Shares, (C) of the suspension of the qualification of the Shares
for offering or sale in any jurisdiction, (D) of the initiation or threatening
of any proceeding for any such purpose, or (E) of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information, and (vi) in the event of the issuance
of any such stop order or of any such order preventing or suspending the use of
any prospectus relating to the Shares or suspending any such qualification, use
promptly its best efforts to obtain the withdrawal of such order. The Company
shall not include in the Registration Statement any securities other than the
Shares.
4.2 Qualification of the Shares under State Securities Laws. The
Company shall promptly take, from time to time, such action as SBC may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such of the United States as SBC may request and to comply
with such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the resale of the
Shares (but not to exceed the period specified in the first paragraph of this
Article IV); provided that, in connection therewith, the Company shall not be
required to
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qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction.
4.3 Preparation of Registration Statement; Reasonable Investigation.
The Company shall (a) give SBC, its designated affiliated entities, counsel and
accountants the opportunity to participate in the preparation of the
Registration Statement and, to the extent practicable, each amendment or
supplement thereto and document incorporated by reference therein which is filed
with the Commission after the filing of the Registration Statement, (b) give SBC
and its representatives such reasonable access to the books, records and
properties of the Company and its subsidiaries (to the extent customarily given
to those who are underwriters of the Company's securities) and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements and
will have such officers and accountants supply such information as shall be
reasonably requested by SBC or its representatives in connection with a
"reasonable investigation" within the meaning of Section 11(b) of the Securities
Act and (c) furnish SBC with copies of any press release or other public
announcement which it intends to issue, or any report or document which it
intends to file under the Exchange Act with the Commission or other regulatory
agency, insofar as such press release, public announcement, report or other
document regards this Agreement and the Call Warrant promptly (where
practicable, at least two business days prior to the proposed issuance or filing
thereof), and consider in good faith any comments received from SBC concerning
the timing and content of such press release, public announcement, report or
other document.
4.4 Compliance with Applicable Law and Commission Requirements. (a) The
Registration Statement and Prospectus and all amendments or supplements thereto
shall conform in all material respects to the requirements of the Securities Act
and the rules and regulations of the Commission thereunder and shall not, as of
the applicable effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date of the Prospectus and any amendment
or supplement thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this covenant shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by SBC expressly for use in
the Prospectus or any amendment or supplement thereto.
(b) All of the documents incorporated by reference in the Registration
Statement and Prospectus, or any amendment or supplement thereto, whether
previously filed with the Commission or filed with the Commission following the
date hereof, at their respective times of filing, (i) shall have conformed or
shall conform, as applicable, in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and (ii) shall not have contained
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or shall not contain, as applicable, an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to (A) any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of SBC expressly for use in the Prospectus or any
amendment or supplement thereto or (B) statements or omissions that have been
superseded or otherwise corrected by an amendment, supplement or other filing
under the Exchange Act but only with respect to the period after such
correction.
4.5 Furnishing of Prospectuses; Notice to SBC of Need for Amendment.
The Company shall furnish SBC with copies of the Prospectus, including any
amendments or supplements thereto, in such quantities as SBC may from time to
time reasonably request. If, while the Registration Statement is effective, the
delivery of a prospectus is required at any time during the period specified in
the first paragraph of this Article IV in connection with the offering and sale
of the Shares by SBC and if, at such time, any event shall have occurred as a
result of which the Prospectus, including the Prospectus as then amended or
supplemented, would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Securities Act or the Exchange Act, the Company shall
notify SBC in writing and, as promptly as reasonably possible, provided that
where such report is required under this Section 4.5 solely to comply with the
periodic reporting provisions under the Exchange Act, such report need not be
filed sooner than required by such provisions and no such written notice to SBC
shall be required, shall amend or supplement the Prospectus or file such
document so as to correct such statement or omission or effect such compliance
and shall prepare and furnish to SBC without charge as many copies as SBC may
from time to time reasonably request of any amended Prospectus or supplement to
the Prospectus.
4.6 Listing of the Shares. The Company shall use its best efforts to
have the Shares approved for quotation on the Nasdaq National Market or listed
on such other exchange as the Company Common Stock is listed as of the Maturity
Date.
4.7 Delivery of Opinion and Comfort Letter. On the effective date of
the Registration Statement, the Company shall cause to be furnished to SBC (i)
an opinion or opinions of counsel for the Company, addressed to SBC and dated as
of the effective date of the Registration Statement, in substantially the form
of Exhibit A hereto, and (ii) a letter signed by Coopers & ▇▇▇▇▇▇▇ LLP,
addressed to SBC and dated as of the effective date of the Registration
Statement, in substantially the form set forth in Exhibit B hereto, provided SBC
provides Coopers & ▇▇▇▇▇▇▇ LLP with an appropriate request.
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4.8 Furnishing of Additional Information. Until the earlier of the
Termination Date or completion of resale of the Shares, the Company shall
furnish to SBC copies of all reports or other communications (financial or
other) generally furnished to stockholders and, as soon as they are available,
copies of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which the Shares or any class
of securities of the Company are listed (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders generally
or to the Commission).
4.9 Payment of Expenses. The Company shall pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, the Prospectus and any amendments and supplements
thereto and the mailing and delivering of copies thereof, (ii) any fees incurred
in connection with any stock exchange listing or approval for quotation of the
Shares on the Nasdaq National Market, (iii) all expenses in connection with the
qualification of the Shares for offering and sale under Section 4.2 hereof, (iv)
the cost of preparing certificates for the Shares, (v) the cost and charges of
any transfer agent or registrar or dividend disbursing agent, and (vi) all other
costs incident to the performance of the Company's obligations under Article IV
hereof which are not otherwise specifically provided for in this Section. It is
understood, however, that except as provided in this Section 4.9, SBC will pay
all of its own costs and expenses, including the fees of its counsel and
brokerage fees and commissions and transfer taxes on resale of any of the Shares
by SBC.
ARTICLE V AGREEMENTS OF SBC
SBC agrees, with respect to the period beginning on the date hereof
through and including the Termination Date, as follows:
5.1 Information for Use in the Prospectus. As soon as practicable but
in no event later than the third business day following the receipt of a written
request from the Company, SBC shall furnish the Company with such information
regarding SBC and its proposed dispositions of Shares as the Company may from
time to time reasonably request for use in preparing the Registration Statement
and Prospectus, including any amendments or supplements thereto.
5.2 Suspension of Disposition of Shares. Upon receipt of written notice
from the Company pursuant to Section 4.5 that an event has occurred as a result
of which, or that the Company has discovered that, the Prospectus, including the
Prospectus as then amended or supplemented, includes an untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements therein, in the light of the
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circumstances under which they were made, not misleading, SBC shall immediately
discontinue disposition of the Shares pursuant to the Registration Statement
until such time as SBC shall have received copies of an amended or supplemented
Prospectus or until it receives notice from the Company that dispositions of
Shares may be resumed without amendment or supplementation of the Prospectus.
5.3 Notice of Completion. SBC shall notify the Company within three
business days of completion of its disposition of the Shares.
5.4 Resales of Shares. SBC agrees that it will not offer, transfer,
sell, pledge, hypothecate or otherwise dispose of any of the Shares (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of any
Shares), except in compliance with the Securities Act and the rules and
regulations of the Commission thereunder, and in compliance with applicable
state securities or Blue Sky laws.
ARTICLE VI INDEMNIFICATION
The Company and SBC further agree as follows:
6.1 Indemnification with Respect to the Registration Statement. (a) The
Company will indemnify and hold harmless SBC against any losses, claims, damages
or liabilities, joint or several, to which SBC may become subject, under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and will reimburse SBC for any legal or other expenses
reasonably incurred by SBC in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any supplement thereto, the Registration Statement, the Prospectus
or any amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by or on behalf of SBC expressly
for use therein.
(b) SBC will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages
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or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus and any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of SBC expressly for use therein and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation.
(d) If the indemnification provided for in this Section 6.1 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and SBC on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
13
fact relates to information supplied by the Company on the one hand or SBC on
the other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
SBC agree that it would not be just and equitable if contribution pursuant to
this subsection (d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company under this Section 6.1 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each "affiliate" (as defined under the
Securities Act) of SBC, to each director and each officer of SBC and of its
affiliates, to each person, if any, who controls SBC or any of its affiliates
within the meaning of the Securities Act; and the obligations of SBC under this
Section 6.1 shall be in addition to any liability which SBC may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the Company
within the meaning of the Securities Act.
ARTICLE VII GENERAL
7.1 Notices. (a) Any notice or other communication in respect of this
Agreement may be given in any manner set forth below to the address or number
specified in paragraph (b) of this Section 7.1 and will be deemed effective as
indicated: (i) if in writing and delivered in person or by courier, on the date
it is delivered; (ii) if sent by facsimile transmission, on the date that
transmission is received by a responsible employee of the recipient in legible
form (it being agreed that the burden of proving receipt will be on the sender
and will not be met by a transmission report generated by the sender's facsimile
machine); or (iii) if sent by certified or registered mail or the equivalent
(return receipt requested), on the date that mail is delivered or its delivery
is attempted; unless that delivery (or attempted delivery) or that receipt, as
applicable, is not on a Local Business Day or occurs after the close of business
on a Local Business Day, in which case that notice or communication shall be
deemed given and effective on the first following day that is a Local Business
Day.
(b) Notices shall be given to the addresses or facsimile numbers
reflected below:
14
If to SBC, to: Swiss Bank Corporation, London Branch
c/o SBC Warburg Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company, to: Interneuron Pharmaceuticals, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
(c) Either party may by notice to the other change the address or
facsimile number at which notices or other communications are to be given to it.
7.2 Entire Agreement. This Agreement, together with the Confirmation,
constitute the entire agreement and understanding of the parties with respect to
their subject matter and supersede all oral communications and prior writings
with respect thereto.
7.3 Governing Law and Jurisdiction. (a) This Agreement shall be
governed by and construed in accordance with New York law (without reference to
choice of law doctrine).
(b) With respect to any suit, action or proceedings relating to this
Agreement ("Proceedings"), each party irrevocably (i) submits to the
non-exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in New York City, and
(ii) waives any objection which it may have at any time to the laying of venue
of any Proceedings brought in any such court, waives any claim that such
Proceedings have been brought in an inconvenient forum and further waives the
right to object, with respect to such Proceedings, that such court does not have
any jurisdiction over such party. Nothing in this Agreement precludes either
party from bringing Proceedings in any other jurisdiction, nor will the bringing
of Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) SBC hereby appoints Swiss Bank Corporation, New York Branch, ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Legal Affairs, to receive, for it
and on its behalf, service of process of any Proceedings. The parties
irrevocably consent to
15
service of process given in the manner provided for notices in Section 7.1.
Nothing in this Agreement will affect the right of either party to serve process
in any other manner permitted by law.
7.4 Amendments and Waivers. No amendment, modification or waiver in
respect of this Agreement shall be effective unless in writing and executed by
each of the parties. A failure or delay in exercising any right, power or
privilege in respect of this Agreement shall not be presumed to preclude any
subsequent or further exercise of that right, power or privilege or the exercise
of any other right, power or privilege.
7.5 Remedies Cumulative. The rights, powers, remedies and privileges
provided in this Agreement are cumulative and not exclusive of any rights,
powers, remedies and privileges provided by law.
7.6 Headings. The headings used in this Agreement are for convenience
of reference only and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
7.7 No Third-Party Beneficiaries. Except as expressly provided in
Section 6.1(e), nothing in this Agreement is intended or shall be construed to
confer upon any person other than the parties hereto any right, remedy or claim
under or by reason of this Agreement.
7.8 Survival. The representations, warranties, indemnities and
agreements contained in this Agreement shall remain in full force and effect,
regardless of any investigation by or on behalf of any party, and shall survive
delivery of the Shares to SBC and resale of the Shares by SBC or any affiliated
entity.
7.9 Counterparts. This Agreement may be executed in one or more
counterparts with the same effect as if the signatures to each counterpart were
upon the same instrument.
7.10 Assignability. This Agreement is not assignable by either party
without the prior written consent of the other; provided that the Company may
assign this Agreement to a successor in interest pursuant to a transfer of all
or substantially all of its assets or pursuant to a consolidation or merger.
16
IN WITNESS WHEREOF, Interneuron Pharmaceuticals, Inc. and Swiss Bank
Corporation, London Branch, have executed this Agreement as of the day and year
first written above.
INTERNEURON PHARMACEUTICALS, INC.
By: ___________________________
Title: ___________________________
SWISS BANK CORPORATION,
LONDON BRANCH
By: ___________________________
Title:___________________________
By: ___________________________
Title:___________________________
17
EXHIBIT A
Form of Opinion of Counsel
In Connection With Registration Statement
Counsel reasonably satisfactory to SBC shall have furnished to SBC his
or their written opinion, dated the effective date of the Registration
Statement, in form and substance reasonably satisfactory to SBC, to the effect
that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the prospectus; and each subsidiary of the Company that is a
"significant subsidiary" (as defined in Rule 12b-2 under the Exchange Act) has
been duly incorporated and is validly existing as a corporation and is in good
standing under the laws of its jurisdiction of incorporation, except where the
failure to be so would not have a material adverse effect on the Company and its
significant subsidiaries taken as a whole;
(ii) The Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each
jurisdiction other than the State of Delaware in which the ownership or leasing
of its properties, or the conduct of its business, requires such qualification,
except to the extent the failure to be so qualified in any jurisdiction would
not have a material adverse effect on the Company and its significant
subsidiaries taken as a whole (such counsel being entitled to rely in respect of
the opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company, provided that such
counsel shall state that they believe that both SBC and they are justified in
relying upon such opinions and certificates);
(iii) The Company's authorized capital stock conforms as to legal
matters in all material respects to the description thereof set forth or
incorporated by reference in the Prospectus, and all of the issued shares of
capital stock of the Company (including the Shares delivered in exercise of the
Call Warrant and registered for resale pursuant to the Registration Statement)
have been duly and validly authorized and issued and are fully paid and
non-assessable; all of the issued shares of capital stock of the significant
subsidiaries held directly or indirectly by the Company have been duly and
validly authorized and issued, are fully paid and non-assessable; and the
Company's stockholders have no preemptive rights with respect to the Shares
delivered in exercise of the Call Warrant (such counsel being entitled to rely
in respect of the opinion in this clause upon opinions of local counsel and in
respect of matters of fact upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that they believe that both
SBC and they are justified in relying upon such opinions and certificates);
(iv) To the best of such counsel's knowledge and other than as set
forth or incorporated by reference in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its significant
subsidiaries is a party or of which any property of the Company or any of its
significant subsidiaries is the subject which, if determined adversely to the
Company or any of its significant subsidiaries, would individually or in the
aggregate have a material adverse effect on the business operations,
consolidated financial position, shareholders' equity or results of operations
of the Company and its significant subsidiaries, taken as a whole; and, to such
counsel's knowledge, no such proceedings are threatened by governmental
authorities or threatened by others, provided that such counsel expresses no
opinion on any such matter relating to the U.S. Food and Drug Administration
("FDA");
(v) The documents incorporated by reference in the Prospectus (other
than the financial statements, related schedules and other financial information
therein, as to which such counsel need express no opinion), when they were filed
with the Commission complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder; and
(vi) The Registration Statement and the Prospectus (other than the
financial statements, related schedules and other financial information therein,
as to which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Securities Act and the rules and
regulations thereunder; and such counsel do not know of any amendment to the
Registration Statement required to be filed or any contracts or other documents
of a character required to be filed as an exhibit to the Registration Statement
or required to be incorporated by reference into the Prospectus or required to
be described in the Registration Statement or the Prospectus which are not filed
or incorporated by reference or described as required.
In addition to the matters set forth above, the opinion shall also
contain a statement to the effect that while such counsel are not passing upon,
and do not assume responsibility for, the accuracy, completeness or fairness of
the Registration statement or the Prospectus, including the documents
incorporated by reference therein, based upon the procedures referred to in such
opinion nothing has come to the attention of such counsel which leads him or
them to believe (i) that the Registration Statement as of its effective date or
the Prospectus as of its date (other than the financial statements, related
schedules and other financial information therein as to which such counsel need
express no belief) contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading or (ii) that any of the documents incorporated by reference in
the Prospectus which were filed with the Commission prior to such effective time
(other than the financial statements, related schedules and other financial
information therein, as to which such counsel need express no belief), as of the
respective dates when they were filed with the Commission in each
2
case after excluding any statement in any such document which does not
constitute part of the Registration Statement or the Prospectus pursuant to Rule
412 of Regulation C under the Securities Act and after substituting therefor any
statement modifying or superseding such excluded statement, contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not misleading, provided
in each case that such counsel expresses no opinion as to FDA or patent matters.
3