EXHIBIT 10.26
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STOCK PURCHASE AGREEMENT
dated as of January 12, 2001
by and between
▇▇▇▇▇ ▇▇
a corporation of the Federal Republic of Germany
and
CURAGEN CORPORATION
a Delaware corporation
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made as of January 12,
2001 by and between CuraGen Corporation, a Delaware corporation (the "Company"),
and ▇▇▇▇▇ ▇▇, a corporation organized under the laws of the Federal Republic of
Germany ("Purchaser").
WHEREAS, the Company and Purchaser are parties to that certain Agreement,
dated as of the date hereof (the "Pharmacogenomics Agreement"), which contains
the terms and conditions on which the parties have agreed to collaborate on
toxicogenomic and pharmacogenomic services for use in the development of drugs;
and
WHEREAS, Bayer Corporation, an Indiana corporation and a wholly-owned
subsidiary of Purchaser, and the Company are parties to that certain Agreement,
dated as of the date hereof (the "Metabolic Disorder Collaboration Agreement,"
and, together with the Pharmacogenomics Agreement, the "Collaboration
Agreements"), which contains the terms and conditions on which the parties have
agreed to collaborate on drug discovery and development for metabolic disorders;
and
WHEREAS, in connection with the execution of these Collaboration
Agreements, Purchaser wishes to purchase from the Company, and the Company
wishes to sell to Purchaser, shares of the Company's 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 1. PURCHASE AND SALE OF SHARES
Section 1.1 Purchase and Sale. Subject to the terms and conditions of
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this Agreement, the Company agrees to issue and sell to Purchaser and Purchaser
agrees to purchase from the Company 3,112,482 shares of the Company's Common
Stock (the "Shares"), at a purchase price of $27.3094 per share (which purchase
price reflects the average closing price of the Company's Shares during the
twenty (20) day trading period preceding the date of this Agreement) for an
aggregate purchase price of eighty-five million fifteen dollars and ninety-three
cents ($85,000,015.93) (the "Purchase Price").
Section 1.2 Closing Date. The closing of the purchase and sale of the
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Shares hereunder (the "Closing") shall be held at the offices of Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, P.C., Boston, Massachusetts, 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 6 have been satisfied or waived, or
at such other, place, time and date as the Company and Purchaser shall agree.
The Company shall give Purchaser three (3) Business Days prior notice of the
date the Closing is scheduled to occur. The date of the Closing is hereinafter
referred to as the "Closing Date."
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Section 1.3 Transactions at Closing. At the Closing, subject to the
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terms and conditions of this Agreement, (a) the Company shall issue and sell to
Purchaser and Purchaser shall purchase the Shares; (b) the Company shall deliver
to Purchaser a certificate representing the Shares, registered in the name of
Purchaser against payment of the 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 Closing Date; and (c) the
Company and Purchaser shall enter into the Registration Rights Agreement.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the Company. The Company
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hereby represents and warrants to Purchaser as follows:
(a) Corporate Organization. The Company is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
Delaware. The 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 Subsidiary 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 Subsidiary, taken as a whole. The Subsidiary 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 its Subsidiary, each as amended to date and currently in full
force and effect.
(b) Corporate Authority. The Company has the requisite corporate
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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 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.
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(c) No Violations; Consents and Approvals.
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(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 the Company's Subsidiary 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 its Subsidiary 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 of its Subsidiary 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 its Subsidiary, except, in the case of clause (B), for
violations, breaches, defaults, rights of cancellation, termination, revocation,
acceleration or increased payments or Liens that would not, individually or in
the aggregate, have a Material Adverse Effect on the Company and its Subsidiary,
taken as a whole.
(ii) Except for filings as may be required under, and other
applicable requirements of (x) the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), and (y) Regulation D of the Securities Act
of 1933, as amended (the "Securities 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 or local (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 Subsidiary, taken as a whole).
(d) Capital Stock. The authorized capital stock of the Company
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consists of (i) 250,000,000 shares of Common Stock, $.01 par value per share, of
which an aggregate 44,050,017 shares of Common Stock were issued and outstanding
as of December 31, 2000, (ii) 3,000,000 shares of Nonvoting Common Stock, $.01
par value per share, of which an aggregate 1,270,272 shares of Nonvoting Common
Stock were issued and outstanding as of December 31, 2000, (iii) 5,000,000
shares of Preferred Stock, $.01 par value per share, of which none were issued
and outstanding as of December 31, 2000. As of December 31, 2000, the Company
had reserved 30,000 shares of Common Stock pursuant to outstanding warrants, and
7,000,000 shares of Common Stock for issuance pursuant to the 1997 Employee,
Director and Consultant Stock Plan (the "1997 Stock Plan"). As of December 31,
2000, the Company had reserved another 937,500 shares of Common Stock pursuant
to warrants associated with the formation of 454 Corporation. All of the
outstanding shares of Common Stock and Nonvoting Common Stock have been duly
authorized and validly issued, and are fully paid and nonassessable. As of
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December 31, 2000, the Company had completed an offering of 6% Convertible
Subordinated Debentures due 2007 in the aggregate amount of $150,000,000, these
Debentures being convertible into shares of the Company's Common Stock. Except
for the Common Stock, Nonvoting Common Stock, Convertible Subordinated
Debentures and the above referenced Options and Warrants, 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 discussed in this paragraph or in Section
2.1(e), 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 its Subsidiary is a party or by which any of them is bound obligating
the Company or its Subsidiary 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 its Subsidiary. There are
no outstanding agreements of the Company or its Subsidiary to repurchase, redeem
or otherwise acquire any shares of capital stock of the Company or its
Subsidiary.
(e) Subsidiary. Schedule 2.1(e) contains a complete and correct
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description of the shares of stock or other equity interests that are
authorized, or issued and outstanding, of the Company's Subsidiary. Series A and
Series B of the Subsidiary's Preferred Stock are convertible into common stock
of the Subsidiary. The Company has no equity interests with a value of $100,000
or more in any Person other than its Subsidiary, and there are no commitments on
the part of the Company or its Subsidiary to contribute additional capital in
respect of any equity interest in any Person. Each of the outstanding shares of
capital stock of the Subsidiary 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 the Subsidiary are owned, either
directly or indirectly, by the Company free and clear of all Liens.
(f) SEC Filings. The Company has timely filed all reports,
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schedules, forms, statements and other documents required to be filed by it with
the SEC under the Securities Act and the Exchange Act since March 17, 1998 (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 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
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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, since
September 30, 2000, the Company and its Subsidiary 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
Subsidiary, taken as a whole.
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(h) Compliance with Applicable Law. Except as disclosed in the
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Company SEC Documents, each of the Company and its Subsidiary 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 its Subsidiary 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 Subsidiary, 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). The
Company and its Subsidiary have 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 Subsidiary,
taken as a whole. To the Knowledge of the Company, all such Permits are in full
force and effect and the Company and its Subsidiary 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 Subsidiary, taken as a whole.
(i) Litigation. Except as disclosed in the Company SEC Documents
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filed with the SEC and publicly available prior to the date hereof, there are no
civil, criminal or administrative actions, suits, or proceedings pending or, to
the Knowledge of the Company, threatened, against the Company or its Subsidiary
that, individually or in the aggregate, are likely to have a Material Adverse
Effect on the Company and its Subsidiary, 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 its Subsidiary
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
Subsidiary, taken as a whole.
(j) Contracts.
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(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 the Company, unless otherwise disclosed
in the Company's SEC Documents 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
Subsidiary, taken as a whole, provided that no representation is made as to the
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enforceability of any non-competition provision in any employment agreement and
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. Unless otherwise disclosed in the Company's SEC documents,
there does not exist under any Material Contract any violation, breach or event
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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 the Company or its Subsidiary or, to the Knowledge of the Company or its
Subsidiary, 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 Subsidiary, 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 Subsidiary are a party to any contract prohibiting
or materially restricting the ability of the Company or its Subsidiary to
conduct its business, to engage in any business or operate in any geographical
area or compete with any person.
(k) Taxes. (A) all Tax Returns required to be filed by or on behalf
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of each of the Company and its Subsidiary 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 Subsidiary, 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 Subsidiary,
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 Subsidiary 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 Subsidiary 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 Subsidiary, 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 Subsidiary, 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 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 any and all taxes,
sums or amounts assessed or assessable, levied and due by any U.S. or non-U.S.
national, federal, state or county or other local governmental authority or
agency, including without limitation, real and personal property taxes, income
taxes, whether measured by gross or net income or profit, franchise, excise,
sales and use taxes, value added taxes, employee withholding, social security,
unemployment taxes and any other taxes required to be paid by the Company or any
Subsidiary, including interest and penalties in respect thereof whether disputed
or not, and whether accrued, contingent, due, absolute, deferred, unknown or
other, together with any and all penalties, interests and additions to all such
taxes, sums or amounts. "Tax Returns" shall mean all returns, consolidated or
otherwise (including without limitation any declaration, report, claim for
refund or information return), required to be filed with any governmental
authority with respect to Taxes. "Taxable" shall mean subject to Tax.
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(i) Each of the Company and its Subsidiary 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 Subsidiary, taken as a whole.
(ii) (A) all taxable periods of each of the Company and its
Subsidiary ending before December 31, 1995 are closed or no longer subject to
audit; (B) neither the Company nor its Subsidiary 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 Subsidiary, 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 its Subsidiary.
(iii) (A) none of the Company or its Subsidiary 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
Subsidiary 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.
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(i) Employee Benefit Plans. Each Employee Benefit Plan that
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provides for equity-based compensation or that has associated costs that are
expected to be material to the Company or its Subsidiary in the aggregate and
that is expected to provide for contributions to be made by the Company or its
Subsidiary or their Employees after the date hereof or to permit the accrual of
additional benefits by any Employee of the Company or its Subsidiary after the
date hereof has been filed with the SEC as a material contract (collectively,
the "Plans").
(ii) Qualification. Except to the extent that failure to meet
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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 or opinion letter from the IRS as to its qualification
under the Code and 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 (other than changes in legal requirements applicable to such
Employee Benefit Plan necessitating amendments for which the applicable remedial
amendment period has not yet expired)or (B) a timely application for such a
favorable determination letter or opinion letter was filed and the Company has
no reason to believe that such a favorable determination letter or opinion
letter will not be granted.
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(iii) Compliance; Liability.
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(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 Subsidiary,
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 Subsidiary 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 Subsidiary, as applicable to the extent required by
GAAP) which would reasonably be expected to result in any material liability to
the Company and its Subsidiary 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 Subsidiary 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 Subsidiary,
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 Subsidiary.
(iv) Employees, Labor Matters, etc. Neither the Company nor its
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Subsidiary is a party to or bound by any collective bargaining agreement, and
there are no labor unions or other organizations representing, or to the
Knowledge of the Company purporting to represent or attempting to represent any
employees employed by the Company or its Subsidiary. Since September 30, 2000,
there has not occurred or , to the Knowledge of the Company, 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
its Subsidiary. There are no labor disputes currently subject to any grievance
procedure, arbitration or litigation and there is no petition to the National
Labor Relations Board or a similar state authority or recognized private
arbitration firm or service pending or, to the Knowledge of the Company,
threatened with respect to any employee of the Company or its Subsidiary that
individually or in the aggregate, are likely to have a Material Adverse Effect
on the Company and its Subsidiary, taken as a whole). The Company and its
Subsidiary 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
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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 reasonably be
expected to result in a Material Adverse Effect on the Company and its
Subsidiary, taken as a whole.
(m) Environmental Matters. Except as disclosed in the Company SEC
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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 Subsidiary, taken as a whole, (i)
the Company and its Subsidiary are in compliance with all applicable
Environmental Laws (as defined below), (ii) the Company and its Subsidiary 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 Subsidiary has received notice from any Governmental
Entity asserting that either the Company or its Subsidiary 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 its
Subsidiary, 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 or local 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 provisions of Section 203 of the Delaware
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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 the Closing have
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been duly authorized by all necessary corporate action on the part of the
Company, and at 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
stockholder of the Company. The Shares will be eligible for listing on the
Nasdaq Stock Market.
(p) Intellectual Property. The Intellectual Property that is owned by
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the Company or its Subsidiary 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 Subsidiary, 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 force and effect
would not have a Material Adverse Effect on the Company and its Subsidiary,
taken as a whole. To the Knowledge of the Company, the conduct of the business
of the Company and its Subsidiary 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
Subsidiary to conduct their business as presently conducted. To the Knowledge of
the Company, none of the Company Intellectual Property is being infringed by
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any third party except where such infringement would not have a Material Adverse
Effect on Company and its Subsidiary, 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 its Subsidiary 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 Subsidiary 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 Subsidiary and
the Intellectual Property subject to written or oral licenses, agreements or
arrangements pursuant to which its use by the Company or its Subsidiary is
permitted by any Person.
(q) Brokers or Finders. No agent, broker, investment banker or
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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 the Federal Republic of
Germany, 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.
(c) Conflicting Agreements and Other Matters. Neither the
----------------------------------------
execution, delivery or performance by Purchaser of this Agreement or the
Registration Rights Agreement or the consummation by Purchaser of the
transactions contemplated hereby or thereby (A) will result in a violation or
breach of the organizational documents or agreements of Purchaser 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
11
without due notice or lapse of time or both) under, or result in the creation of
any Lien upon any of the properties or assets of Purchaser under, (1) any of the
terms, conditions or provisions of any Contract or of any Permit to which
Purchaser is a party or by which any of its properties or assets may be bound,
or (2) subject to the governmental filings and other matters referred to in
Section 2.1(c)(ii) above, any judgment, order, decree, statute, law, regulation
or rule applicable to Purchaser, except, in the case of clause (B), for
violations, breaches, defaults, rights of cancellation, termination, revocation,
acceleration or increased payments or Liens that would not, individually or in
the aggregate, have a Material Adverse Effect on Purchaser.
(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. 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 3. LIMITATIONS ON PURCHASES OF ADDITIONAL EQUITY SECURITIES
Section 3.1 Purchases of Equity Securities.
------------------------------
(a) Prior to December 31, 2003, except as permitted by Section
3.1(b), (c) or (d), Purchaser and its Affiliates will not (and will not assist
or encourage others to) directly or indirectly in any manner:
(i) acquire, announce an intention to 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 13d-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;
(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);
(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; or
(iv) acquire, announce an intention to acquire, or agree to
acquire, directly or indirectly, alone or in concert with others, by purchase,
exchange or otherwise, (i) any
12
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, other than in
the ordinary course of business;
(v) enter into any arrangement or understanding with others to
do any of the actions restricted or prohibited under clauses (i), (ii), (iii) or
(iv) of this Section 3.1(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;
(b) Nothing herein shall prevent Purchaser from purchasing any
securities of the Company pursuant to the terms of this Agreement 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 who has not sold such Shares)
and (ii) after such purchase, Purchaser and its Affiliates would own 9.9 percent
(9.9%) or less of the Total Voting Power of all Voting Securities of the Company
then outstanding.
(d) This Section 3.1 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 3.1 in the event that:
(i) the Company has entered into (A) an agreement relating to a
merger, business combination, consolidation or any such similar transaction,
following which the then holders of the Voting Securities would cease to hold a
majority of the voting securities of the surviving corporation or (B) an
agreement to sell all or substantially all its assets; provided, however, that
-------- -------
the limitation shall (1) continue or be reinstated if 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 or other agreement
referred to in section (A) continue as a majority of the directors of the
surviving company after the transaction or (2) be reinstated if such merger
agreement or other agreements referred to in sections (A) or (B) 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; or
13
(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
or 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.
(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 3.1(d) above and Section
4.1(d) below shall be determined in accordance with Rule 13d-3 of the Exchange
Act as currently in effect.
ARTICLE 4. TRANSFER OF SHARES
Section 4.1 Limitations on Transfer.
-----------------------
(a) Prior to June 30, 2002, Purchaser will not, directly or
indirectly, sell, transfer or otherwise dispose of any Shares (except to any
Affiliate of Purchaser, provided, however, that such Affiliate shall agree to be
-------- -------
bound by the terms of this Agreement).
(b) After June 30, 2002 and prior to June 30, 2003, Purchaser will
not, directly or indirectly, sell, transfer or otherwise dispose of more than
fifty percent (50%) of the acquired Shares (as adjusted to reflect any stock
splits, stock dividends and similar recapitalizations) (except to an Affiliate
of Purchaser, provided, however, that such Affiliate shall agree to be bound by
--------- -------
the terms of this Agreement).
(c) The limitation on Share transfer set forth in this Section 4.1
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 4.1 in the event
that:
(i) the Company has entered into (A) an agreement relating to a
merger, business combination, consolidation or any such similar transaction,
following which the then holders of the Voting Securities would cease to hold a
majority of the voting securities of
14
the surviving corporation or (B) an agreement to sell all or substantially all
its assets; provided, however, the limitation shall (1) be reinstated if 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 or
other agreement referred to in Section (A) continue as a majority of the
directors of the surviving company after the transaction or (2) be reinstated if
such merger agreement or other agreements referred to in sections (A) or (B) is
subsequently terminated or the transactions contemplated thereunder are not
consummated;
(ii) a tender or exchange offer which has been approved or
recommended by the Company's Board of Directors 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.
Section 4.2 Convertible Securities.
----------------------
(a) Notwithstanding the provisions of Section 4.1, Purchaser or
Affiliates of Purchaser may issue Convertible Securities; provided, however,
-------- -------
that any exercise or exchanges for Shares pursuant to the terms and conditions
of the Convertible Securities shall not occur until such sale, transfer and
disposition of the Shares would be permitted under Section 4.1.
ARTICLE 5. COVENANTS AND ADDITIONAL AGREEMENTS
Section 5.1 Ordinary Course. During the period from the date of this
---------------
Agreement and continuing until the Closing, the Company agrees as to itself and
its Subsidiary that, except to the extent that Purchaser otherwise consents in
writing, the Company and its Subsidiary shall conduct their respective
businesses in the ordinary course in substantially the same manner as presently
conducted.
Section 5.2 Access and Information. So long as this Agreement remains in
----------------------
effect, prior to the Closing, the Company will (and will cause its Subsidiary
and each of their respective
15
accountants, counsel, consultants, officers, directors, employees, agents and
representatives of or to the Subsidiary, 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 Subsidiary, and furnish to them all such
documents, records and information with respect to the properties, assets and
business of the Company and its Subsidiary, 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 Subsidiary.
Section 5.3 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) required under any law
applicable to it or its Subsidiary, 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, if any, necessary
to be obtained or made by it or its Subsidiary, 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 Closing Date, the Company and Purchaser
shall 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 6 to be satisfied, promptly upon becoming aware
of the same.
Section 5.4 Further Assurances. Following the 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 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.
ARTICLE 6. CONDITIONS PRECEDENT
Section 6.1 Each Party's Obligations. The obligations of the Company and
------------------------
Purchaser to consummate the transactions contemplated to occur at the Closing
shall be subject to the
16
satisfaction prior to the Closing of each of the following conditions, each of
which may be waived only if it is legally permissible to do so:
(a) HSR Act 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 Agreements. The Collaboration Agreements shall
------------------------
have become effective in accordance with the terms and conditions thereof.
(d) Nasdaq Listing. The Shares shall have been approved for listing
--------------
on the Nasdaq Stock Market, subject only to official notice of issuance.
Section 6.2 Conditions to the Obligations of the Company. The obligations
--------------------------------------------
of the Company to consummate the transactions contemplated to occur at the
Closing shall be subject to the satisfaction or waiver thereof prior to the
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 the
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.
(c) Performance of the Obligations of Purchaser. Purchaser shall
-------------------------------------------
have performed or complied in all material respects with all obligations and
covenants required to be performed or complied with by Purchaser under this
Agreement and the Company shall have received a certificate signed by an
authorized officer of Purchaser to such effect.
Section 6.3 Conditions to the Obligations of Purchaser. The obligations
------------------------------------------
of Purchaser to consummate the transactions contemplated to occur at the Closing
shall be subject to the satisfaction or waiver thereof prior to the Closing of
each of the following conditions:
17
(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 the 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 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 the Closing of Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C., counsel to the Company, in form and substance
reasonably satisfactory to Purchaser and Purchaser's counsel.
(c) Registration Rights Agreement. The Company shall have executed
-----------------------------
and delivered the Registration Rights Agreement.
(d) Performance of the 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 if requested, as may be reasonably
requested.
ARTICLE 7. TERMINATION
Section 7.1 Termination. This Agreement may be terminated at any time
-----------
prior to the Closing:
(a) by mutual written consent of Purchaser and the Company;
(b) by Purchaser or the Company:
(i) if the Closing shall not have occurred prior to June 30,
2001, 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 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 a
judgment, order, decree or
18
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; or
(iii) if either one of the Collaboration Agreements shall have
terminated or not become effective in accordance with the terms and conditions
thereof;
(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; or
(ii) if any of the conditions set forth in Section 6.1 or 6.3
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;
(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 6.1 or 6.2
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 7.2 Effect of Termination. In the event of termination of this
---------------------
Agreement by either the Company or Purchaser as provided in Section 7.1, 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 7.2, Article 8 and Section 10.9, 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.
ARTICLE 8. INDEMNIFICATION
Section 8.1 Indemnification of Purchaser and Company. The Company
----------------------------------------
covenants and agrees to indemnify and hold harmless each of Purchaser, its
Affiliates (other than the Company and its Subsidiary), and their respective
officers, directors, partners, employees, agents, advisers and representatives
(collectively, the "Purchaser Indemnitees") from and against, and to pay or
19
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 8.1 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.
Each Purchaser agrees, severally and not jointly, to indemnify and hold
harmless the Company, its Affiliates (other than Purchaser), and their
respective officers, directors, partners, employees, agents, advisers and
representatives (collectively, the "Company Indemnitees") from and against, and
to pay or reimburse the Company Indemnitees for, any Losses, resulting from or
based on (or allegedly resulting from or based on) any breach by Purchaser of
any representation, warranty, covenant or obligation of Purchaser hereunder. The
Losses described in this Section 8.1 are herein referred to as "Company
Indemnifiable Losses," and together with the Purchaser Indemnifiable Losses, are
referred to herein as the "Indemnifiable Losses." Purchaser shall reimburse the
Company Indemnitees for any legal or other expenses incurred by such Company
Indemnitees in connection with investigating or defending any such Company
Indemnifiable Losses as such expenses are incurred.
Section 8.2 Indemnification Procedures. In case any proceeding or written
--------------------------
assertion of claim (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to Section 8.1 above (the "Indemnitee"), promptly after receipt such
Indemnitee shall, if a claim in respect thereof is to be made against the
Company or the Purchaser, 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 Indemnitee to so notify the Indemnifying Person shall
relieve the Indemnifying Person from the obligation to indemnify such 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 Indemnitee. In case any such
action or claim shall be brought or asserted against any Indemnitee and it shall
notify the Indemnifying Person of the commencement or assertion thereof, the
Indemnifying Person shall be entitled to participate in or assume the defense of
such action or claim at any time, provided, however, that (a) if the
-------- -------
Indemnifying Person does not assume the defense, it 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 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 (b) if the Indemnifying Person assumes the defense, it
must select an attorney that is satisfactory to the Indemnitee, after which it
will not be liable for the attorney's fees of the Indemnitee. Indemnitee shall
not enter into any settlement of any such
20
claim without the prior consent of the Indemnifying Person, such consent not to
be unreasonably withheld or delayed.
In no event shall the Indemnifying Person be liable under this Article 8,
and the Indemnifying Person's obligation to defend, indemnify and hold harmless
the Indemnitee shall not apply to: (a) any special, incidental or consequential
damages resulting from or based upon any breach by the Indemnifying Person of
any representation, warranty, covenant or obligation of such Indemnifying Person
hereunder, (b) any Indemnifiable Losses until the aggregate amount of such
Losses exceeds $5,000,000, and (c) any Indemnifiable Losses in excess of
$50,000,000. The remedies set forth in this Article 8 are cumulative and shall
not be construed to restrict or otherwise affect any other remedies that may be
available to a 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 8 must be
brought prior to the second anniversary of the Closing Date, except for claims
relating to the representations and warranties in Sections 2.1(k) and 2.1 (m)
which can be brought any time prior to the expiration of the applicable statute
of limitations.
Section 8.3 Survival of Representations and Warranties. The
------------------------------------------
representations and warranties of the Company and Purchaser contained in this
Agreement shall expire for all purposes on the second anniversary of the Closing
Date, except for the representations and warranties contained in Sections 2.1(k)
and 2.1(m) which shall expire for all purposes upon expiration of the applicable
statute of limitations.
ARTICLE 9. INTERPRETATION; DEFINITIONS
Section 9.1 Interpretation. As used in this Agreement, unless the context
--------------
otherwise requires:
(a) any reference to the Company and its Subsidiary means the Company
and its Subsidiary;
(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 9.2 Definitions. For purposes of this Agreement, the following
-----------
terms shall have the following meanings:
(a) "13D Group" is defined in Section 3.1(e).
---------
(b) "Affiliate" shall have the meaning set forth in Rule 12b-2 under
---------
the Exchange Act (as in effect on the date of this Agreement).
(c) "Agreement" is defined in the recitals to this agreement.
---------
21
(d) "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 13d-3 under the Exchange Act),
including pursuant to any agreement, arrangement or understanding, whether or
not in writing.
(e) "Business Day" means any day on which banking institutions are
------------
open in the City of Boston.
(f) "Closing" is defined in Section 1.2.
-------
(g) "Closing Date" is defined in Section 1.2.
------------
(h) "Code" means the Internal Revenue Code of 1986, as amended,
----
and the regulations promulgated thereunder, as amended.
(i) "Collaboration Agreements" is defined in the recitals to this
------------------------
Agreement.
(j) "Common Stock" means the Voting Common Stock, $.01 par value
------------
per share, of the Company.
(k) "Company" is defined in the recitals to this Agreement.
-------
(l) "Company Intellectual Property" is defined in Section 2.1(p).
-----------------------------
(m) "Company SEC Documents" is defined in Section 2.1(f).
---------------------
(n) "Contract" is defined in Section 2.1(c).
--------
(o) "Convertible Securities" means equity, debt or other securities
----------------------
of Purchaser or an Affiliate of Purchaser that are exercisable or exchangeable
for Shares.
(p) "Employee" means any employee or former employee of the Company
--------
or its Subsidiary or any beneficiary or dependent of any such employee or former
employee.
(q) "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
its Subsidiary.
(r) "Environmental Laws" is defined in Section 2.1(m).
------------------
(s) "Environmental Permits" is defined in Section 2.1(m).
---------------------
(t) "ERISA" means the Employee Retirement Income Security Act of
-----
1974, as amended.
22
(u) "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.
(v) "GAAP" means United States generally accepted accounting
----
principles.
(w) "Governmental Entity" is defined in Section 2.1(c).
-------------------
(x) "Hazardous Substance" is defined in Section 2.1(m).
-------------------
(y) "HSR Act" is defined in Section 2.1(c).
-------
(z) "Indemnifying Person" is defined in Section 8.2.
-------------------
(aa) "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.)
(bb) "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.
(cc) "IRS" means the Internal Revenue Service.
---
(dd) "Knowledge of the Company," "Knowledge of the Company or its
------------------------ -------------------------------
Subsidiary" or any like expression means to the actual knowledge of ▇▇▇▇▇▇▇▇
-----------
▇. ▇▇▇▇▇▇▇▇, Chief Executive Officer, President and Chairman of the Board;
▇▇▇▇▇. ▇. ▇▇▇▇▇▇, Executive Vice-President, Treasurer and Chief Financial
Officer; ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice-President; ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Senior Vice-President, Business Development; and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Ph.D., Vice-
President, Operations.
(ee) "Lien" is defined in Section 2.1(c).
----
(ff) "Losses" is defined in Section 8.1.
------
(gg) "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, results of operations or financial condition of such
entity (or, if with respect thereto, of such group of entities taken as a
whole), other than any state of facts, event, change or effect attributable to
changes (x) in general economic or market conditions or (y) generally affecting
the biotechnology or pharmaceutical industries, or (b) the ability of such
entity (or group of entities)
23
to consummate the transactions contemplated under this Agreement or the
Registration Rights Agreement.
(hh) "Material Contract" is defined in Section 2.1(j).
-----------------
(ii) "Nonvoting Common Stock" means the Nonvoting Common Stock, $.01
----------------------
par value per share, of the Company.
(jj) "Permit" is defined in Section 2.1(c).
------
(kk) "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) 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,
(C) 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, (D) 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 (E) easements,
covenants, declarations, rights or way, encumbrances, or similar restrictions in
connection with real property owned by the Company of its Subsidiary that do not
materially impair the use of such real property by the Company and its
Subsidiary, and in the case of Liens described in clauses (B), (C), (D) or (E)
that, individually or in the aggregate, would not have a material Adverse Effect
on the Company and its Subsidiary, taken as a whole.
(ll) "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.
(mm) "Plans" is defined in Section 2.1(l).
-----
(nn) "Purchase Price" is defined in Section 1.1.
--------------
(oo) "Purchaser" is defined in the recitals to this Agreement.
---------
(pp) "Purchaser Indemnifiable Losses" is defined in Section 8.1.
------------------------------
(qq) "Purchaser Indemnitees" is defined in Section 8.1.
---------------------
(rr) "Registration Rights Agreement" is defined in the recitals to
-----------------------------
this Agreement.
(ss) "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.
(tt) "SEC" means the Securities and Exchange Commission.
---
24
(uu) "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.
(vv) "Shares" is defined in Section 1.1.
------
(ww) "Subsidiary" means, as to any Person, any corporation if 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 its Subsidiary or by such Person and its
Subsidiary and includes 454 Corporation.
(xx) "Taxes" is defined in Section 2.1(k).
-----
(yy) "Tax Returns" is defined in Section 2.1(k).
-----------
(zz) "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.
(aaa) "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 10. MISCELLANEOUS
Section 10.1 Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants, and restrictions without
including any of such which may be hereafter declared invalid, void or
unenforceable.
Section 10.2 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 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 10.3 Entire Agreement. This Agreement (including the documents
----------------
set forth in the Exhibits and Schedules hereto) and the Collaboration Agreement
contain the entire understanding of the parties with respect to the transactions
contemplated hereby.
Section 10.4 Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement, and
shall become
25
effective when one or more of the counterparts have been signed by each party
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
Section 10.5 Notices. All notices and other communications required or
-------
permitted under this Agreement shall be effective upon receipt and shall be in
writing and may be delivered in person, by telecopy, overnight delivery service
or registered or certified United States mail, addressed to the Company or the
Purchaser, as the case may be, at their respective addresses set forth below:
If to the Company: If to Purchaser:
CuraGen Corporation ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ D 51368
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Federal Republic of Germany
Attn: Chief Executive Officer Attn: General Counsel
Telephone (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: ▇▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: 011 49 214 30 50848
With copies to: With copies to:
CuraGen Corporation Bayer Corporation, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ 400 ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attn: Legal Department
Attn: Legal Department Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and to: and to:
Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
One Financial Center ▇▇▇▇ ▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇ Telephone (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
All notices and other communications shall be effective upon the earlier of
actual receipt thereof by the person to whom notice is directed or (a) in the
case of notices and communications sent by personal delivery or telecopy, one
business day after such notice or communication arrives at the applicable
address or was successfully sent to the applicable telecopy number, (b) in the
case of notices and communications sent by overnight delivery service, at noon
(local time) on the second business day following the day such notice or
communications was delivered to such delivery service, and (c) in the case of
notices and communications sent by United States mail,
26
seven days after such notice or communication shall have been deposited in the
United States mail. Any notice delivered to a party hereunder shall be sent
simultaneously, by the same means, to such party's counsel as set forth above.
Section 10.6 Amendments. This Agreement may be amended as to Purchaser
----------
their successors and assigns (determined as provided in Section 10.8), and the
Company may take any action herein prohibited, or omit to perform any act
required to be performed by it, if the Company shall obtain the written consent
of Purchaser. This Agreement may not be waived, changed, modified, or discharged
orally, but only by an agreement in writing signed by the party or parties
against whom enforcement of any waiver, change, modification or discharge is
sought or by parties with the right to consent to such waiver, change,
modification or discharge on behalf of such party.
Section 10.7 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 10.8 Successors and Assigns. All covenants and agreements
----------------------
contained herein shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns; provided, however, that Purchaser may
-------- -------
assign its rights hereunder (including its right to purchase the Shares) to an
Affiliate of Purchaser, provided that such Affiliate agrees in writing to be
bound by the terms and conditions set forth herein, and the Company may not
assign any of its rights under this Agreement without the written consent of
Purchaser, which consent shall not be unreasonably withheld.
Section 10.9 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; provided, however, that the Parties shall share equally the cost of any
-------- -------
filing fees under the HSR Act.
Section 10.10 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 4 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.
27
"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.
Section 10.11 Governing Law. This Agreement shall be governed by and
-------------
construed and enforced in accordance with the laws of the State of Delaware
without regard to conflicts of law principles.
Section 10.12 Publicity. The Company and Purchaser will consult and
---------
cooperate with each other before issuing, and provide each other the opportunity
to review and comment upon, any press release or otherwise making any public
statement with respect to the transactions contemplated by this Agreement.
Section 10.13 No Third Party Beneficiaries. Nothing contained in this
----------------------------
Agreement is intended to confer upon any Person other than the parties hereto
and their respective successors and permitted assigns, any benefit, right or
remedies under or by reason of this Agreement; provided, however, that the
-------- -------
parties hereto hereby acknowledge and agree that the Purchaser Indemnities
(other than Purchaser) are third party beneficiaries of Article 8 of this
Agreement.
Section 10.14 Consent to Jurisdiction. Each of the Company and Purchaser
-----------------------
irrevocably submits to the personal exclusive jurisdiction of the United States
District Court for the District of Delaware for the purposes of any suit, action
or other proceeding arising out of this Agreement or any transaction
contemplated hereby (and, to the extent permitted under applicable rules of
procedure, agrees not to commence any action, suit or proceeding relating hereto
except in such court). Each of the Company and Purchaser further agrees that
service of any process, summons, notice or document hand delivered or sent by
registered mail to such party's respective address set forth in Section 10.5
will be effective service of process for any action, suit or proceeding in
Delaware with respect to any matters to which it has submitted to jurisdiction
as set forth in the immediately preceding sentence. Each of the Company and
Purchaser irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in the United States District court for the
District of Delaware, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in such court that any such action, suit or
proceeding brought in such court has been brought in an inconvenient forum.
Signature Page Follows
28
IN WITNESS WHEREOF, PURCHASER and the COMPANY have caused this Agreement to be
executed as of the day and year first above written.
▇▇▇▇▇ ▇▇
By: /s/ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇. ▇▇▇▇▇▇▇
Title: EVP
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Counsel
CURAGEN CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
29
SCHEDULE 2.1(e)
Capitalization of 454 Corporation
---------------------------------
Preferred Stock Series: 15,000,000 shares authorized, $.01 par value
Series A - 6,000,000 shares issued and outstanding
Series A issued to CuraGen Corporation for $20,000,000 cash and
$177,827 of fixed assets
Series B - 4,000,000 shares issued and outstanding
5,000,000 shares undesignated
Common Stock: 20,000,000 shares authorized
No shares of Common Stock are issued or outstanding
2000 Employee, Director and Consultant Stock Plan: 2,500,000 shares of common
stock authorized
907,206 option outstanding
Preferred Cash Contributed
Shares Par at Par Issuance Fixed Total
Issued Value Value Proceeds Assets Proceeds
Series A
Preferred Stock
Issued to
CuraGen Corporation 6,000,000 $ 0.01 60,000 20,000,000 177,827 20,177,827
Series B
Preferred Stock
Issued to
Various Investors
at $5.00 per share 4,000,000 $ 0.01 40,000 20,000,000 0 20,000,000
Summary
Total Preferred
Shares Outstanding 10,000,000 100,000 40,000,000 177,827 40,177,827
Par value of stock (100,000)
Equity
Offering Expenses (844,532)
-------------------------------------------------------------------------------------------------
Total 100,000 40,000,000 177,827 39,233,295
30
SCHEDULE 2.1(j)
Contracts prohibiting or materially restricting the ability of the Company or
-----------------------------------------------------------------------------
its Subsidiary to conduct its business, to engage in any business or operate in
-------------------------------------------------------------------------------
any geographical area or compete with any person:
-------------------------------------------------
The Technology Transfer and License Agreement by and between CuraGen Corporation
and 454 Corporation dated June 6, 2000 sets forth the following limitations.
Defined terms have the same meaning as the Technology Transfer and License
Agreement.
Section 2.1.7. The Subsidiary agrees that (i) prior to the closing of a
Qualified Public Offering, the Subsidiary will not engage independently or with
any Third Party in any business, venture or activity outside the 454 Field, and
(ii) after the closing of a Qualified Public Offering, 454 shall not engage
independently or with any Third Party in any business, venture or activity
within the CuraGen Field.
31
EXHIBIT A
CURAGEN CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made as of January
12, 2001 by and between CuraGen Corporation, a Delaware corporation (the
"Company"), and ▇▇▇▇▇ ▇▇, a corporation organized under the laws of the Federal
Republic of Germany ("Purchaser").
WHEREAS, the Company and Purchaser have entered into a Stock Purchase
Agreement, dated as of January 12, 2001 (the "Stock Purchase Agreement"),
pursuant to which the Purchaser has agreed to purchase 3,112,482 Shares of
Voting Common Stock, par value $.01 per share, of the Company, upon the terms
and conditions set forth therein; and
WHEREAS, in order to induce the Purchaser to enter into the Stock Purchase
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement for the benefit of Purchaser and its direct and indirect
transferees upon the terms and conditions set forth herein; and
WHEREAS, the execution and delivery of this Agreement is a condition to the
Purchaser's obligations pursuant to the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
set forth herein, the Company and Purchaser agree as follows:
ARTICLE 1. DEFINITIONS
Capitalized terms used herein without definition shall have the meanings
assigned to such terms in the Stock Purchase Agreement. For the purposes of
this Agreement:
(a) "Commission" means the U.S. Securities and Exchange Commission or
any other governmental authority from time to time administering the Securities
Act.
(b) "Common Stock" means the Voting Common Stock, par value $.01 per
share, of the Company.
(c) "DTC" means the Depository Trust Company.
(d) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute and the rules and the regulations of
the Commission promulgated thereunder, all as the same shall be in effect from
time to time.
(e) "Holder" means any Person owning or having the right to acquire
Registrable Securities, including an Affiliate or any successor, assignee or
transferee of Purchaser or a Holder that has received Registrable Securities in
accordance with Article 13 hereof.
(f) "NASD" means the National Association of Securities Dealers, Inc.
(g) "Person" means any natural person, firm, partnership, association,
corporation, company, joint venture, unincorporated association, trust, business
trust, government or department or agency of a government, limited liability
company or other entity.
(h) "Prospectus" means the prospectus included in any Registration
Statement (including without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering or any portion
of the Registrable Securities covered by such Registration Statement and all
other amendments and supplements to the prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
(i) "Registrable Securities" means (a) the Shares of Common Stock
received by the Purchaser pursuant to the Stock Purchase Agreement and (b) any
capital stock or other securities of the Company issued or issuable with respect
to the Shares, (i) upon any conversion or exchange thereof, (ii) by way of stock
dividend or other distribution, stock split or reverse stock split, or (iii) in
connection with a combination of shares, recapitalization, merger,
consolidation, exchange offer or other reorganization. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (A) a Registration Statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such Registration
Statement, (B) such securities become eligible to be distributed to the public
in reliance upon Rule 144 (or any successor provision) under the Securities Act,
provided that at the time such securities are proposed to be disposed of, they
may be sold under Rule 144 without any limitation on the amount of such
securities which may be sold or (C) they shall have ceased to be outstanding.
(j) "Registration Expenses" means all fees and expenses incident to
the performance of or compliance with the provisions of this Agreement, whether
or not any Registration Statement is filed or becomes effective, including,
without limitation, all (a) registration and filing fees (including, without
limitation, (i) fees with respect to filings required to be made and other
expenses associated with the NASD and any other applicable exchange in
connection with an underwritten offering), and (ii) fees and expenses of
compliance with state securities or blue sky laws (including, without
limitation, fees and distributions of counsel for the underwriter or
underwriters in connection with blue sky qualifications of the Registrable
Securities and determination of eligibility of the Registrable Securities for
investment under the laws of such jurisdictions as are provided in Section
5(e)), (b) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities in a form eligible for deposit
with DTC and of printing prospectuses), (c) fees and disbursements of all
independent certified public accountants referred to in Article 5 (including,
without limitation, the reasonable expenses of any special audit and "cold
comfort" letters required by or incident to such performance), (d) the fees and
expenses of any "qualified independent underwriter" or other independent
appraiser participating in an offering pursuant to the NASD Rules of Conduct and
the corresponding rules of any other applicable exchange, (e) liability
insurance under the
2
Securities Act or any other securities laws, if the Company desires such
insurance, (f) fees and expenses of all attorneys, advisers, appraisers and
other persons retained by the Company or any Subsidiary of the Company, (g)
internal expenses of the Company and its Subsidiaries (including, without
limitation, all salaries and expenses of officers and employees of the Company
and its Subsidiaries, other general overhead expenses of the Company and its
Subsidiaries, and other expenses for the performance of legal or accounting
duties), (h) the expense of any annual audit and the preparation of historical
and pro forma financial statements or other data normally prepared by the
Company in the ordinary course of business, (i) the expenses relating to
printing, word processing and distributing all Registration Statements,
underwriting agreements, securities sales agreements, and any other documents
necessary in order to comply with this Agreement, (j) any fees and disbursements
of any other underwriters and broker-dealers customarily paid by issuers or
sellers of securities, and (k) the fees and disbursements of not more than one
(1) counsel (together with appropriate local counsel) chosen by the Holders of a
majority of the Registrable Securities to be included in such Registration
Statement; provided, however, that in all cases in which the Company is required
to pay Registration Expenses hereunder, Registration Expenses shall exclude any
underwriting discounts, selling commissions or any transfer taxes payable in
respect of the sale of the Registrable Securities by the Holders thereof.
(k) "Registration Statement" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement, and all amendments and supplements to any such registration
statement, including post-effective amendments, in each case including the
Prospectus, all exhibits and all material incorporated by reference or deemed to
be incorporated by reference in such registration statement.
(l) "Rule 144" means Rule 144 (or any successor provision) under the
Securities Act.
(m) "Securities Act" means the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect from time to time.
(n) "Special Registration" means the registration of share of equity
securities and/or options or other rights in respect thereof to be offered
solely to directors, members of management, employees, consultants or sales
agents, distributors or similar representatives of the Company or its direct or
indirect Subsidiaries, solely on Form S-8 or any successor form, a registration
on Form S-4 with respect to any merger, consolidation or acquisition, or a
registration on another form not available for registering Registrable
Securities for sale to the public.
(o) "underwritten registration" or "underwritten offering" means a
registration in which securities of the Company (including Registrable
Securities) are sold to an underwriter for reoffering to the public.
3
ARTICLE 2. DEMAND REGISTRATION
(a) Request for Registration. Subject to the provisions of Section
2(d) and Article 8, at any time or from time to time on or after June 30, 2002,
Holders of Registrable Securities shall have the right to make a written request
(the "Initiating Holders") that the Company effect a registration under the
Securities Act of all or part of its Registrable Securities of the Holders
making such request; provided, however, that Purchaser or a Purchaser Affiliate
may demand registration beginning six months after the date hereof for
Registrable Securities that may be acquired upon the exercise of Convertible
Securities, so long as any exercise or exchanges of Convertible Securities for
Registrable Securities pursuant to the terms and conditions of the Convertible
Securities shall not occur until a sale, transfer or disposition of the
Registrable Securities would be permitted under Section 4.1 of the Stock
Purchase Agreement. A request for registration pursuant to this Article 2 (a
"Demand Registration") shall specify the approximate number of Registrable
Securities requested to be registered, the anticipated per share price range for
such offering and the intended method or disposition thereof by such Initiating
Holders.
(b) Obligation to Effect Registration. Within five (5) days after
receipt by the Company of any request for Demand Registration, the Company shall
promptly give written notice of such requested registration to all Holders.
Such Holders shall have the right, by giving written notice to the Company
within twenty (20) days after the Company provides its notice, to elect to have
included in such registration such of their Registrable Securities as such
Holders may request in such notice of election. Thereupon, the Company shall,
as expeditiously as possible, use reasonable best efforts to effect the
registration under the Securities Act of all Registrable Securities that the
Company has been requested to so register; provided, that if the underwriter (if
any) managing the offering determines that, because of marketing factors, all of
the Registrable Securities requested to be registered by all Holders may not be
included in the offering, then all Holders who have requested registration shall
participate in the offering in accordance with Section 2(h).
(c) Registration Statement Form. Registrations under this Article 2
shall be on such appropriate form of Registration Statement of the Commission as
shall be selected by the Company and available to it under the Securities Act.
The Company agrees to include in any such Registration Statement all information
which, in the opinion of counsel to the Company, is required to be included
therein under the Securities Act.
(d) Limitations on Registration. The Company shall not be required to
effect more than two (2) Demand Registrations pursuant to this Article 2. In
addition, the Company shall not be required to effect any such registration
(other than on Form S-3 or any other successor form relating to secondary
offerings) during the period starting with the date sixty (60) days prior to the
Company's estimated date of filing of, and ending on the date ninety (90) days
immediately following the effective date of, any registration statement (other
than a Special Registration) pertaining to the securities of the Company,
provided that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective. The Company
shall not be required to effect the Demand Registration if the Holders propose
to sell Registrable Securities that have a market value at the time of such
demand of less than $3,000,000.
4
(e) Inclusion of Other Securities. The Registration Statement filed
pursuant to the request of the Holders may, subject to the provisions of Section
2(h), include other securities of the Company with respect to which registration
rights have been granted, and may include securities of the Company being sold
for the account of the Company. If the Company shall request inclusion in any
registration, securities being sold for its own account, or if other persons
shall request inclusion in any registration pursuant to Section 2.(h), the
Holders shall offer to include such securities in the underwriting.
(f) Effective Registration Statement. A Demand Registration shall not
be deemed to have been effected unless a Registration Statement covering all of
the Registrable Securities requested to be included in such registration by the
Holders thereof and as reduced, if necessary, in accordance with Section 2(g)
hereto has been declared effective by the Commission and remains continually
effective for the period specified in Section 5(b).
(g) Suspension. In addition to the limitations in Section 2(d), if
the Board of Directors of the Company, in its good faith judgment, determines
that any registration under the Securities Act of Registrable Securities should
not be made or continued because it would materially interfere with any material
financing, acquisition, corporation reorganization, merger, or other transaction
involving the Company or any of its subsidiaries (a "Valid Business Reason"),
(i) the Company may postpone filing a Registration Statement relating to a
Demand Registration until such Valid Business Reason no longer exists, but in no
event for more than one hundred twenty (120) days, and (ii) in case a
Registration Statement has been filed relating to a Demand Registration, the
Company may cause such Registration Statement to be withdrawn and its
effectiveness terminated or may postpone amending or supplementing such
Registration Statement until such Valid Business Reason no longer exists, but in
no event for more than one hundred twenty (120) days (the "Postponement
Period"); provided, however, that in no event shall the Company be permitted to
postpone or withdraw a Registration Statement within 120 days after the
expiration of any Postponement Period.
(h) Allocation. If any Demand Registration involves an underwritten
offering and the managing underwriter of such offering shall advise the Company
that, in its view, the number of Registrable Securities and other shares of
common stock of the Company with registration rights (the "Section 2 Other
Shares") requested to be included in such registration exceeds the largest
number that can be sold in an orderly manner in such offering within a price
range acceptable to the Holders of Registrable Securities requesting the
registration, the Company shall include in such registration:
(i) first, to each Initiating Holder, pro rata on the basis of the
number of shares of Registrable Securities held by such Initiating Holders that
such Initiating Holders had requested to be included in the registration,
provided, however, if any Initiating Holder does not request inclusion of the
maximum number of shares of Registrable Securities allocated to him pursuant to
the above-described procedure, the remaining portion of his allocation shall be
reallocated among the remaining Initiating Holders whose allocations did not
satisfy their requests pro rata on the basis of the number of shares of
Registrable Securities held by such remaining Initiating Holders that such
Holders had requested to be included in the registration, and this procedure
shall be repeated until all of the shares of Registrable Securities which may be
included in the registration on behalf of the Initiating Holders have been so
allocated,
5
(ii) thereafter, to the selling holders of the non-requesting
Registrable Securities and Section 2 Other Shares, pro rata on the basis of the
number of shares of Registrable Securities and Section 2 Other Shares held by
such Holders and other selling stockholders that such Holders and other selling
stockholders had requested to be included in the registration; provided,
however, that if any Holder or other selling stockholder does not request
inclusion of the maximum number of shares of Registrable Securities and Section
2 Other Shares allocated to him pursuant to the above-described procedure, the
remaining portion of his allocation shall be reallocated among those requesting
Holders and other selling stockholders whose allocations did not satisfy their
requests pro rata on the basis of the number of shares of Registrable Securities
and Section 2 Other Shares held by such Holders and other selling stockholders
that such Holders and other selling stockholders had requested to be included in
the registration, and this procedure shall be repeated until all of the shares
of Registrable Securities and Section 2 Other Shares which may be included in
the registration on behalf of the Holders and other selling stockholders have
been so allocated, and
(iii) thereafter to the Company. The Company shall not limit the
number of Registrable Securities to be included in a registration pursuant to
this Section 2(h) in order to include shares held by stockholders with no
registration rights or to include founder's stock or any other shares of stock
issued to employees, officers, directors, or consultants pursuant to the
Company's employee stock option plans in order to include in such registration
securities registered for the Company's own account.
ARTICLE 3. PIGGYBACK REGISTRATION
(a) Inclusion in Piggyback Registration. If the Company at any time
on or after June 30, 2002 proposes to register any of its securities under the
Securities Act (other than pursuant to Article 2 or a Special Registration),
whether or not for sale for its own account, (a "Company Registration"), it
shall each such time, prior to such filing, give prompt written notice to all
Holders of Registrable Securities of its intention to do so and, upon the
written request of any Holder of Registrable Securities given to the Company
within twenty (20) days after the Company has provided such notice (which
request shall state the intended method of disposition of such Registrable
Securities), the Company shall use reasonable best efforts to cause all
Registrable Securities that the Company has been requested by the Holders
thereof to register to be so registered under the Securities Act to the extent
necessary to permit their disposition in accordance with the intended methods of
distribution specified in the request of such Holder or Holders; provided, that
if at any time after giving written notice of its intention to register any
securities and prior to the effective date of the Registration Statement filed
in connection with such registration, the Company shall determine for any reason
not to register such securities, the Company may, at its election, give written
notice of such determination to each Holder that was previously notified of such
registration, and, thereupon, shall not register any Registrable Securities in
connection with such registration (but shall nevertheless pay the Registration
Expenses in connection therewith), without prejudice, however, to the rights of
any Holders to request that a registration be effect under Article 2 and
provided further, that no registration effected under this Article 3 shall
relieve the Company from its obligations to effect Registration upon request
under Article 2.
6
(b) Terms of Underwriting. In connection with any offering under this
Article 3 involving an underwritten offering, the Company shall not be required
to include any Registrable Securities in such offering unless the Holder thereof
accepts the terms and enters into an underwriting agreement, if any, of the
underwriting as agreed upon between the Company and the underwriters selected by
it provided that such terms must be reasonably satisfactory in substance and
form to the Holder and consistent with this Agreement, and then only in such
quantity as will not, in the opinion of the managing underwriter, jeopardize the
success of the offering by the Company.
(c) Allocation. If any Company Registration involves an underwritten
offering and the managing underwriter of such offering shall advise the Company
that, in its view, the number of securities requested to be included in such
registration exceeds the largest number that can be sold in an orderly manner in
such offering within a price range acceptable to the Company, the Company shall
include in such registration:
(i) in the event of a Company initiated registration, first to
the Company for securities being sold for its own account, or
(ii) in the event of a demand registration by holders of other
shares of common stock of the Company with registration rights ("Section 3 Other
Shares"), first to the demanding holders of such Section 3 Other Shares.
Thereafter the number of shares to be included in the registration shall be
allocated as set forth in Section 3(c)(iii). If any person does not agree to the
terms of any such underwriting, such person shall be excluded therefrom by
written notice from the Company or the underwriter. Any Registrable Securities
or other securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration. If shares are so withdrawn from the
registration or if the number of shares of Registrable Securities to be included
in such registration was previously reduced as a result of marketing factors,
the Company shall then offer to all persons who have retained the right to
include securities in the registration the right to include additional
securities in the registration in an aggregate amount equal to the number of
shares so withdrawn, with such shares to be allocated among the persons
requesting additional inclusion in accordance with Section 3(c).
(iii) For purposes of this Section 3, in any circumstance in
which all of the Registrable Securities and non-demanding Section 3 Other Shares
requested to be included in a registration on behalf of the Holders or non-
demanding selling stockholders cannot be so included as a result of limitations
of the aggregate number of shares of Registrable Securities and Section 3 Other
Shares that may be so included, the number of shares of Registrable Securities
and non-demanding Section 3 Other Shares that may be so included shall be
allocated among the Holders and non-demanding selling stockholders requesting
inclusion of shares such that the selling holders of the Registrable Securities
and non-demanding Section 3 Other Shares shall have their shares included pro
rata on the basis of the number of shares of Registrable Securities and Section
3 Other Shares held by such Holders and non-demanding selling stockholders that
such Holders and non-demanding selling stockholders had requested to be included
in the registration; provided, however, that such allocation shall not operate
to reduce the aggregate number of Registrable Securities and Section 3 Other
Shares to be included in such registration. If any Holder or non-demanding
selling stockholder does not request inclusion of the maximum number of shares
of Registrable Securities and Section 3 Other Shares allocated to such person
7
pursuant to the above-described procedure, the remaining portion of such
person's allocation shall be reallocated among those requesting Holders and
other non-demanding selling stockholders whose allocations did not satisfy their
requests pro rata on the basis of the number of shares of Registrable Securities
and Section 3 Other Shares held by such Holders and other non-demanding selling
stockholders that such Holders and other non-demanding selling stockholders had
requested to be included in the registration, and this procedure shall be
repeated until all of the shares of Registrable Securities and Section 3 Other
Shares which may be included in the registration on behalf of the Holders and
other non-demanding selling stockholders have been so allocated. The Company
shall not limit the number of Registrable Securities to be included in a
registration pursuant to this Agreement in order to include shares held by
stockholders with no registration rights or to include founder's stock or any
other shares of stock issued to employees, officers, directors, or consultants
pursuant to the Company's employee stock option plans.
ARTICLE 4. ALLOCATION OF EXPENSES
The Company will pay all Registration Expenses of all registrations under this
Agreement.
ARTICLE 5. OBLIGATIONS OF THE COMPANY
If and whenever the Company is required to use best efforts to effect the
registration under the
Securities Act of any Registrable Securities pursuant to Articles 2 and 3 of
this Agreement, the
Company shall:
(a) file with the Commission, as soon as practicable, a Registration
Statement with respect to such Registrable Securities, make all required filings
with the NASD and any other applicable exchange, and use best efforts to cause
such Registration Statement to become effective at the earliest possible date
and remain effective;
(b) prepare and file with the Commission such amendments and supplements to
the Registration Statement and the Prospectus used in connection therewith and
such other documents as may be necessary to keep the Registration Statement
effective until the earlier of (i) one hundred twenty (120) days after the
effective date of such Registration Statement or (ii) the consummation of the
disposition by the Holders of all the Registrable Securities covered by such
Registration Statement and otherwise comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement;
(c) furnish to counsel (if any) selected by the Holders of a majority of
the Registrable Securities covered by such Registration Statement and to counsel
for the underwriters in any underwritten offering copies of all documents
proposed to be filed with the Commission in connection with such registration a
reasonable time prior to the proposed filing thereof and give reasonable
consideration in good faith to any comments of such Holders, counsel and
underwriters.
(d) furnish to each seller of such securities, without charge, such number
of conformed copies of such Registration Statement and of each such amendment
and supplement thereto (in each case, including all exhibits (including all
exhibits incorporated by reference), financial statements, schedules, and all
documents incorporated therein, deemed to be
8
incorporated therein by reference or filed therewith, except that the Company
shall not be obligated to furnish any seller of securities with more than two
copies of such exhibits and documents), such numbers of copies of the Prospectus
included in such Registration Statement (including each preliminary prospectus)
in conformity with the requirements of the Securities Act, and such other
documents, as such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such seller;
(e) use its reasonable best efforts to register or qualify and cooperate
with the Holders of Registrable Securities, the underwriters and their
respective counsels in connection with the registration or qualification (or
exemption from such registration or qualification) of the securities covered by
such Registration Statement under such other securities or blue sky laws of such
jurisdictions as each seller shall request; provided, however, that where
Registrable Securities are offered other than through an underwritten offering,
the Company agrees to cause its counsel to perform blue sky investigations and
file registrations and qualification required to be filed pursuant to this
Section 5(e); keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is required
to be effective hereunder and do any and all other acts and things which may be
necessary or advisable to enable such seller to consummate the disposition in
such jurisdictions of the securities owned by such seller, except that the
Company shall not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified, subject itself to taxation in any jurisdiction wherein it is not so
subject, or take any action which would subject it to general service of process
in any jurisdiction wherein it is not so subject;
(f) in connection with an underwritten public offering only, furnish to
each seller in a signed counterpart, addressed to the sellers, of
(i) an opinion of counsel for the Company experienced in securities
law matters, dated the effective date of the Registration Statement, and
(ii) a "cold comfort" letter signed by the independent public
accountants who have issued an audit report on the Company's financial
statements included in the Registration Statement, subject to such seller having
executed and delivered to the independent public accountants such certificates
and documents as such accountants shall reasonably request, covering
substantially the same matters with respect to the Registration Statement (and
the Prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to the underwriters in underwritten public offerings of
securities;
(g)
(i) notify each Holder of Registrable Securities subject to such
Registration Statement if such Registration Statement, at the time it or any
amendment thereto became effective, (x) contained an 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 not misleading upon discovery by the
Company of such material misstatement or omission or (y) upon discovery by the
Company of the happening of any event as a result of which the Company believes
there
9
would be such a material misstatement or omission, and, as promptly as
practicable, prepare and file with the Commission a post-effective amendment to
such Registration Statement and use reasonable best efforts to cause such post-
effective amendment to become effective such that such Registration Statement,
as so amended, shall not contain an untrue statement or a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and
(ii) notify each Holder of Registrable Securities subject to such
Registration Statement, at any time when a Prospectus related therefor is
required to be delivered under the Securities Act, if the Prospectus included in
such Registration Statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading upon discovery by the Company of such
material misstatement or omission or upon the discovery by the Company of the
happening of any event as a result of which the Company believes that there
would be a material misstatement or omission, and, as promptly as is
practicable, prepare and furnish to such Holder a reasonable number of copies of
a supplement to or an amendment of such Prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such securities, such Prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(h) otherwise use its reasonable best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement of the Company
complying with the provisions of Section 11(a) of the Securities Act and Rule
158 under the Securities Act (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month period (or
90 days after the end of any 12-month period if such period is a fiscal year)
(i) commencing at the end of any fiscal quarter in which Registrable Securities
are sold to an underwriter or to underwriters in a firm commitment or best
efforts underwritten offering, and (ii) if not sold to an underwriter or to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of the relevant
Registration Statement, which statements shall cover said 12-month periods;
(i) promptly notify each Holder of Registrable Securities covered by such
Registration Statement, their counsel and the underwriters (i) when such
Registration Statement, or any post-effective amendment to such Registration
Statement, shall have become effective, or any amendment of or supplement to the
Prospectus used in connection therewith shall be filed, (ii) of any request by
the Commission to amend such Registration Statement or to amend or supplement
such Prospectus or for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of such Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus or the initiation or threatening of any proceedings for any of such
purposes, (iv) of the suspension of the qualification of such securities for
offering or sale in any jurisdiction, or of the institution of any proceedings
for any of such purposes and (v) if at any time when a Prospectus is to be
required by the Securities Act to be delivered in connection with the sale of
the Registrable Securities, the representations and warranties of the Company
contained in any agreement (including the
10
underwriting agreement contemplated in Section 6(b) below), to the knowledge of
the Company, cease to be true and correct in any material respect;
(j) use its reasonable best efforts to prevent the issuance of any order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification) of any of the Registrable Securities covered
thereby for sale in any jurisdiction, and, if any such order is issued, to use
its reasonable best efforts obtain the withdrawal of any such order at the
earliest possible moment;
(k) if requested by the managing underwriter, if any, (i) promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter, if any, reasonably requests to be
included therein to comply with applicable law, and (ii) make all required
filings of such prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to be
incorporated in such prospectus supplement or post-effective amendment;
(l) cooperate with the Holders and the managing underwriter, if any, to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold, which certificates shall not bear any
restrictive legends whatsoever and shall be in a form eligible for deposit with
DTC, and enable such Registrable Securities to be in such denominations and
registered in such names as the underwriters, if any, or Holders may reasonably
request at least two (2) business days prior to any sale of Registrable
Securities in a firm commitment underwritten public offering;
(m) use its reasonable best efforts to cause the Registrable Securities
covered by a Registration Statement to be registered with, and to obtain the
consent or approval of, each governmental agency or authority, whether federal,
state, local or foreign, which may be required to effect such registration or
the offering or sale in connection therewith or to enable the sellers to offer,
or to consummate the disposition of, the Registrable Securities subject to such
Registration Statement, except as may be required solely as a consequence of the
nature of such seller's business, in which case the Company will cooperate with
all reasonable respects with the filing of the Registration Statement and the
granting of such approvals;
(n) prior to the effective date of the Registration Statement, (i) provide
the registrar for the Common Stock or such other Registrable Securities with
printed certificates for such securities in a form eligible for deposit with DTC
and (ii) provide a CUSIP number for such securities.
(o) The Company agrees not to file or make any amendment to any
Registration Statement with respect to any Registrable Securities, or any
amendment of or supplement to the Prospectus used in connection therewith, which
refers to any seller of any securities covered thereby by name, or otherwise
identifies such seller as the holder of any securities of the Company, without
the consent of such seller, such consent not to be unreasonably withheld, except
that no such consent shall be required for any disclosure that is required by
law.
11
ARTICLE 6. UNDERWRITTEN OFFERINGS
The provisions of this Article 6 do not establish additional registration rights
but instead set forth procedures applicable, in addition to those set forth in
Articles 2, 3 and 5, to any registration that is an underwritten offering.
(a) Underwritten Offerings Exclusive. Whenever a request for Demand
Registration is for an underwritten offering, only securities that are to be
distributed by the underwriters may be included in the Registration.
(b) Underwriting Agreement. If requested by the underwriters for any
underwritten offering by Holders pursuant to a request for Demand Registration,
the Company shall enter into an underwriting agreement with such underwriters
for such offering, such agreement to be reasonably satisfactory in substance and
form to the Company and Holders of a majority of the Registrable Securities to
be covered by such registration and to the underwriters and to contain such
representations and warranties by the Company and such other terms and
provisions as are customarily contained in agreements of this type, including,
but not limited to, indemnities to the effect and to the extent provided in
Article 10, provisions for the delivery of customary officers' certificates,
opinions of counsel and accountants' "cold comfort" letters, and hold-back
arrangements. The Holders of Registrable Securities to be distributed by such
underwriters shall be parties to such underwriting agreement and may, at their
option, require that any or all the representations and warranties by, and the
agreements on the part of, the Company to and for the benefit of such
underwriters be made to and for the benefit of such Holders and that any or all
of the conditions precedent to the obligations of such underwriters under such
underwriting agreements shall also be conditions precedent to the obligations of
such Holders.
Each Holder of Registrable Securities shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request and as shall be reasonably required in
connection with any registration, qualification, or compliance referred to in
this Agreement, except to the extent that the furnishing of such information
would violate any law or any contractual arrangement. The Company shall not be
obligated to register the Registrable Securities of any Holder who fails
promptly to provide to the Company such information as the Company may
reasonably request at the time to enable the Company to comply with applicable
laws or regulations or to facilitate preparation of the registration statement,
including any information that the Holder fails to provide on the basis that
such information would violate any law or any contractual arrangement.
(c) Selection of Underwriters. The Company shall have the right to
select any underwriters to administer the any underwritten offerings hereunder,
subject to the consent of the Holders of a majority of the Registrable
Securities to be registered pursuant to such offering, which shall not be
unreasonably withheld. At least one of the underwriters chosen by the Company
shall be an underwriter of nationally-recognized standing.
(d) Hold Back Agreements. If and whenever the Company proposes to
register any of its securities under the Securities Act, whether or not for its
own account (other than pursuant to a Special Registration), or is required to
use its best efforts to effect the
12
registration of any Registrable Securities under the Securities Act pursuant to
Articles 2 or 3, each Holder, if requested by the managing underwriter in an
underwritten offering, agrees by acquisition of such Registrable Securities not
to effect (other than pursuant to such registration) any public sale or
distribution, including, without limitation, any sale pursuant to Rule 144, of
any Registrable Securities, any other equity securities of the Company or any
securities convertible into or exchangeable or exercisable for any equity
securities of the Company during the twenty (20) days prior to, and for ninety
(90) days after the effective date of such registration (it being understood
that in the case of an offering under a shelf registration statement under Rule
415, that the effective date shall be the date of the pricing of such offering),
and the Company agrees to cause each director and executive officer of the
Company to enter into a similar agreement with the Company.
ARTICLE 7. PREPARATION, REASONABLE INVESTIGATION
In connection with the preparation and filing of each Registration Statement
registering Registrable Securities under the Securities Act, the Company shall
give the Holders of Registrable Securities to be so registered and their
underwriters, if any, and their respective counsel and accountants, the
opportunity to participate in the preparation of such Registration Statement,
each Prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and shall give each of them such access
to all pertinent financial, corporate, and other documents and properties of the
Company and its Subsidiaries, and such opportunities to discuss the business of
the Company with its officers, directors, employees and the independent public
accountants who have issued audit reports on its financial statements as shall
be necessary, in the opinion of such Holders' and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.
ARTICLE 8. OTHER REGISTRATIONS
If and whenever the Company is required to use its best efforts to effect the
registration under the Securities Act of any Registrable Securities pursuant to
Articles 2 or 3, and if such registration shall not have been withdrawn or
abandoned, the Company shall not be obligated to and shall not file any
Registration Statement with respect to any of its securities (including
Registrable Securities) under the Securities Act (other than a Special
Registration), whether of its own accord or at the request or demand of any
holder or holders of such securities, until a period of 180 days shall have
elapsed from the effective date of such previous registration, provided that the
Company shall not be excused from filing a Registration Statement by virtue of
this Article 8 more than once in a 360 day period.
ARTICLE 9. CERTAIN OBLIGATIONS OF HOLDERS
(a) The Company may require each Holder of any Registrable Securities
as to which any registration is being effected to furnish to the Company such
information regarding such Holder and the intended method of disposition of such
securities as the Company may from time to time reasonably request and as shall
be required to effect the registration of such Holder's Registrable Securities.
Each such Holder agrees to furnish promptly to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.
13
(b) Each Holder of Registrable Securities covered by a Registration
Statement agrees that, upon receipt of any notice from the Company pursuant to
Section 5(g), such Holder will promptly discontinue the disposition of
Registrable Securities pursuant to such Registration Statement until such Holder
shall have received, in the case of clause (i) of Section 5(g), notice from the
Company that such Registration Statement has been amended, as contemplated by
Section 5(g), and, in the case of clause (ii) of Section 5(g), copies of the
supplemented or amended Prospectus contemplated by Section 5(g). If so directed
by the Company, each Holder will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, in such Holder's
possession of the Prospectus covering such Registrable Securities at the time of
receipt of such notice. In the event that the Company shall give any such
notice, the period mentioned in Section 5(b) shall be extended by the number of
days during the period from and including the date of the giving of such notice
to and including the date when each seller of any Registrable Securities covered
by such Registration Statement shall have received copies of the supplemented or
amended Prospectus covering such Registrable Securities contemplated by Section
5(g).
ARTICLE 10. INDEMNIFICATION AND CONTRIBUTION
(a) In the event of any registration of any of the Registrable
Securities under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless the seller of such securities, its directors,
officers, and employees, each other Person who participates as an underwriter,
broker or dealer in the offering or sale of such securities, and each other
person, if any, who controls such seller, underwriter, broker, dealer or any
such participating Person within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages, or liabilities, joint or
several, to which such seller or any such director, officer, employee,
underwriter, broker, dealer, participating Person, or controlling Person may
become subject under the Securities Act, the Exchange Act, state securities or
blue sky laws, or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement under which such Registrable Securities
were registered under the Securities Act, any preliminary prospectus, or
Prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arise out of or are based upon the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Company shall reimburse such seller and each such director, officer, employee,
underwriter, broker, dealer, participating Person, and controlling Person in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding as such expenses are incurred; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage, liability or expense arises out of or is based
upon any untrue statement or omission made in such Registration Statement,
preliminary prospectus, or Prospectus, or any such amendment or supplement, in
reliance upon and in conformity with information furnished to the Company, in
writing, by or on behalf of such seller, underwriter, participating Person or
controlling Person specifically for use in the preparation thereof. The
indemnity agreement contained in this Article 10(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld).
14
(b) In the event of any registration of any of the Registrable
Securities under the Securities Act pursuant to this Agreement, each seller of
such securities, severally and not jointly, will indemnify and hold harmless the
Company, each of its directors and officers and each underwriter (if any) and
each person, if any, who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages, or liabilities, joint or several, to which the Company, such directors
and officers, underwriters, or controlling Persons may become subject under the
Securities Act, Exchange Act, state securities or blue sky laws, or otherwise,
insofar as such losses, claims, damages, or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement under which such securities were registered under the
Securities Act, any preliminary prospectus or Prospectus contained in the
Registration Statement, or any amendment or supplement to the Registration
Statement, or arise out of or are based upon any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, if the statement or omission was made in
reliance upon and in conformity with information relating to such seller
furnished in writing to the Company by or on behalf of such seller expressly for
use in connection with the preparation of such Registration Statement,
preliminary prospectus, Prospectus, amendment, or supplement; provided, however,
that the liability of each such seller hereunder shall be in proportion to and
limited to the gross amount received by such seller from the sale of Registrable
Securities sold in connection with such registration.
(c) Each party entitled to indemnification under this Article 10 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Article 10, except to the extent that the Indemnifying
Party is adversely affected by such failure. The Indemnified Party may
participate in such defense at such party's expense; provided, however, that the
Indemnifying Party shall pay such expense if representation of such Indemnified
Party by the counsel retained by the Indemnifying Party would be inappropriate
due to actual or potential differing interests or conflicts between the
Indemnified Party and any other party represented by such counsel in such
proceeding. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect of such claim or
litigation, and no Indemnified Party shall consent to entry of any judgment or
settle such claim or litigation without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld.
(d) If for any reason the foregoing indemnity is unavailable, or is
insufficient to hold harmless an Indemnified Party, other than by reason of the
exceptions provided in this Article 10, then the Indemnifying Party shall, in
lieu of indemnifying such Indemnified Party,
15
contribute to the amount paid or payable by the Indemnifying Party as a result
of such losses, claims, damages liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and the Indemnified Party on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, or liabilities, as
well as any other relevant equitable considerations. The relative 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 fact relates to information supplied by the Company or the Holders of
Registrable Securities covered by the Registration Statement in question and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Article 10 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in Section 10(d). The amount paid
or payable by an Indemnified Party as a result of the losses, claims, damages
and liabilities referred to in Section 10(d) shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending
any such claim or litigation. Notwithstanding anything to the contrary in this
Article 10, (A) no such Holder will be required to contribute any amount in
excess of the proceeds it received from the sale of its Registrable Securities
pursuant to such Registration Statement, (B) 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 and (C) no party shall be liable for contribution
under this Article 10 except to the extent and under such circumstances as such
party would have been liable to indemnify under this Article 10 if such
indemnification were enforceable under applicable law. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect to which a claim for
contribution may be made against another party or parties under this Article,
notify such party or parties from whom contribution may be sought, but the
omission so to notify such party or parties from whom contribution may be sought
shall not relieve such party from any other obligation it or they may have
thereunder or otherwise under this Article. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its prior written consent, which consent shall not be unreasonably
withheld.
ARTICLE 11. INDEMNIFICATION WITH RESPECT TO UNDERWRITTEN OFFERING
In the event that Registrable Securities are sold pursuant to a Registration
Statement in an underwritten offering, the Company agrees to enter into an
underwriting agreement containing customary representations and warranties with
respect to the business and operations of an issuer of the securities being
registered and customary covenants and agreements to be performed by such
issuer, including without limitation customary provisions with respect to
indemnification by the Company of the underwriters of such offering.
16
ARTICLE 12. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934
With a view to making available to the Holders the benefits of Rule 144
promulgated under the Securities Act and any other rule or regulation of the
Commission that may at any time permit a Holder to sell Registrable Securities
of the Company to the public without Registration, the Company agrees to use its
reasonable best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to any Holder, so long as such Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144 under the Securities
Act, any other such applicable reporting requirements under the Securities Act
and all applicable reporting requirements under the Exchange Act, (ii) a copy of
the most recent animal or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information as may
be reasonably requested in availing any Holder of any rule or regulation of the
Commission which permits the selling of any such securities without Registration
or pursuant to such form.
ARTICLE 13. SUCCESSORS, ASSIGNS AND TRANSFEREES
This Agreement shall be binding upon and shall inure to the benefit of each
party hereto, and their respective successors, assigns and transferees. The
Purchaser or any other Holder under this Agreement may assign its rights under
this Agreement only to any Affiliate or to other successors, assigns and
transferees of the Purchaser or any such Holder of not less than 250,000 shares
of Registrable Securities (subject to adjustment for stock splits, stock
dividends and the like); provided, however, that the Company is given written
notice from the Purchaser or any such Holder at the time of such transfer
stating the name and address of the transferee or assign and identifying the
securities with respect to which the rights hereunder are being transferred. As
a condition to the effectiveness of any transfer permitted hereunder (i) the
transferee or assign shall agree, in writing, to be bound by the provisions of
this Agreement, and (ii) the Company shall be given written notice at the time
of or within a reasonable time after said transfer or assignment, stating the
name and address of said transferee or assign and identifying the securities
with respect to which such registration rights are being assigned. Provided
that the Purchaser or any Holder and any transferee or assignee has complied
with the foregoing conditions, this Agreement shall survive any transfer of
Registrable Securities to and shall inure to the benefit of an Affiliate or such
other successors, assigns and transferees of the Purchase or any such Holder.
In addition, and whether or not any express transfer or assignment shall have
been made, the provisions of this Agreement which are for the benefits of the
parties hereto other than the Company shall also be for the benefit of and
enforceable by any subsequent Holder of Registrable Securities.
17
ARTICLE 14. MISCELLANEOUS
(a) No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent with or
violates the rights granted to the Holders in this Agreement.
(b) Specific Performance; Other Rights. The parties recognize that
various of the rights of the Purchaser and any other Holder under this Agreement
are unique 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 were otherwise breached. Accordingly, the parties agree that
each of the Purchaser and any such Holder shall, in addition to such other
remedies as may be available to it at law or in equity, have the right to
enforce its rights hereunder by actions for injunctive relief and specific
performance in any court of the United States or any state thereof having
jurisdiction, to the extent permitted by law. The Company hereby waives any
requirement for security or the posting of any bond in connection with any
temporary or permanent award of injunctive, mandatory or other equitable relief
(c) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants, and restrictions without including any
of such which may be hereafter declared invalid, void or unenforceable.
(d) Notices. All notices and other communications required or
permitted under this Agreement shall be effective upon receipt and shall be in
writing and may be delivered in person, by telecopy, overnight delivery service
or registered or certified United States mail, addressed to the Company or the
Purchaser (or to any other Holder not a party hereto on the date hereof, to the
address of such Holder in the stock record books of the Company), as the case
may be, at their respective addresses set forth below:
If to the Company: If to Purchaser
CuraGen Corporation ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ D 51368
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Federal Republic of Germany
Attn: Chief Executive Officer Attn: General Counsel
Telephone (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: ▇▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: 011 49 214 30 50848
18
With copies to: With copies to:
CuraGen Corporation Bayer Corporation, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ 400 ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attn: Legal Department
Attn: Legal Department Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and to: and to:
Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
One Financial Center ▇▇▇▇ ▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
All notices and other communications shall be effective upon the earlier of
actual receipt thereof by the person to whom notice is directed or (a) in the
case of notices and communications sent by personal delivery or telecopy, one
business day after such notice or communication arrives at the applicable
address or was successfully sent to the applicable telecopy number, (b) in the
case of notices and communications sent by overnight delivery service, at noon
(local time) on the second business day following the day such notice or
communications was delivered to such delivery service, and (c) in the case of
notices and communications sent by United States mail, seven days after such
notice or communication shall have been deposited in the United States mail.
Any notice delivered to a party hereunder shall be sent simultaneously, by the
same means, to such party's counsel as set forth above.
(e) Entire Agreement. This Agreement contain the entire understanding
of the parties with respect to the matters covered hereby.
(f) Amendments and Waivers. This Agreement may be amended as to the
Holders and their successors and assigns (determined as provided in Article 13),
and the Company may take any action herein prohibited, or omit to perform any
act required to be performed by it, only if the Company shall obtain the written
consent of the Holders of 75% of the Registrable Securities. This Agreement may
not be waived, changed, modified, or discharged orally, but only by an agreement
in writing signed by the party or parties against whom enforcement of any
waiver, change, modification or discharge is sought or by parties with the right
to consent to such waiver, change, modification or discharge on behalf of such
party; provided, however, that any consent required by the Holders shall require
the consent in writing of no less than the Holders of 75% of the Registrable
Securities.
(g) Headings; Counterparts. Headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof. This Agreement may
19
be executed in any number of counterparts, each of which shall be an original,
but all of which together shall constitute one and the same instrument, and
shall become effective when one or more of the counterparts have been signed by
each party and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
(h) Gender. Whenever used herein the singular number shall include
the plural, the plural shall include the singular, and the use of any gender
shall include all genders.
(i) Further Assurances. Each of the parties hereto agrees to execute
and deliver those writings and documents reasonably required to more fully carry
out the purposes of this Agreement and the transactions contemplated hereby.
(j) Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware without regard to
conflicts of law principles.
(k) No Third Party Beneficiaries. Except as provided by Articles 10
and 13, nothing contained in this Agreement is intended to confer upon any
Person other than the parties hereto and their respective successors and
permitted assigns and transferees, any benefit, right or remedies under or by
reason of this Agreement.
(l) Consent to Jurisdiction. Each of the parties hereto irrevocably
submits to the personal exclusive jurisdiction of the United States District
Court for the District of Delaware for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby
(and, to the extent permitted under applicable rules of procedure, agrees not to
commence any action, suit or proceeding relating hereto except in such court).
Each of the parties hereto further agrees that service of any process, summons,
notice or document hand delivered or sent by registered mail to such party's
respective address set forth in Section 14(e) will be effective service of
process for any action, suit or proceeding in Delaware with respect to any
matters to which it has submitted to jurisdiction as set forth in the
immediately preceding sentence. Each of the parties hereto irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in the United States District court for the District of Delaware, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in such court that any such action, suit or proceeding brought in such
court has been brought in an inconvenient forum.
Signature Page Follows
20
IN WITNESS WHEREOF, PURCHASER and the COMPANY have caused this Agreement to be
executed as of the day and year first above written.
▇▇▇▇▇ ▇▇
By: ________________________________
Name:
Title:
By: ________________________________
Name:
Title:
CURAGEN CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
21
