Exhibit 2
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SHAREHOLDER'S AGREEMENT
Between
RAKEPOLL FINANCE N.V.
and
GENSIA, INC.
Dated as of November 12, 1996
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . 4
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . 4
ARTICLE II
ANTI-DILUTION RIGHTS . . . . . . . . . . . . 7
SECTION 2.1. Anti-Dilution Rights of Rakepoll . . . . . . . . 7
ARTICLE III
PURCHASE OF COMMON STOCK . . . . . . . . . . . 8
SECTION 3.1. Purchase of Common Stock by Rakepoll . . . . . . 8
ARTICLE IV
CORPORATE GOVERNANCE . . . . . . . . . . . . 8
SECTION 4.1. Composition of the Board of Directors . . . . . . 8
SECTION 4.2. Solicitation and Voting of Shares . . . . . . . . 10
SECTION 4.3. Management of the Company . . . . . . . . . . . . 11
SECTION 4.4. Approval of Investor Directors Required
for Certain Actions . . . . . . . . . 11
SECTION 4.5. Certificate of Incorporation and By-Laws . . . 12
SECTION 4.6. Funding Plan . . . . . . . . . . . . . . . . . 12
SECTION 4.7. Issuance of Equity Securities During
Standstill Period . . . . . . . . . . 12
SECTION 4.8. Management of the Subsidiaries . . . . . . . . 12
SECTION 4.9. Failure to Comply with this Article IV . . . . 13
ARTICLE V
TRANSFER OF COMMON STOCK . . . . . . . . . . 13
SECTION 5.1. Transfer of Common Stock . . . . . . . . . . . 13
ARTICLE VI
REGISTRATION RIGHTS . . . . . . . . . . . . 14
SECTION 6.1. Request for Registration . . . . . . . . . . . 14
SECTION 6.2. Incidental Registration . . . . . . . . . . . . 16
SECTION 6.3. Registration on Form S-3 . . . . . . . . . . . 17
SECTION 6.4. Obligations of the Company . . . . . . . . . . 18
SECTION 6.5. Furnish Information . . . . . . . . . . . . . . 22
SECTION 6.6. Expenses of Registration . . . . . . . . . . . 22
SECTION 6.7. Underwriting Requirements . . . . . . . . . . . 23
SECTION 6.8. Rule 144 and Rule 144A Information . . . . . . 23
SECTION 6.9. Delay of Registration . . . . . . . . . . . . 23
SECTION 6.10. Indemnification . . . . . . . . . . . . . . . . 23
SECTION 6.11. Lock-up in connection with a Registration
of Securities . . . . . . . . . . . . 26
SECTION 6.12. Transfer of Registration Rights . . . . . . . . 27
SECTION 6.13. Selection of Counsel . . . . . . . . . . . . . 27
ARTICLE VII
REPRESENTATIONS AND WARRANTIES . . . . . . . . . 27
SECTION 7.1. Representations of the Company . . . . . . . . 27
SECTION 7.2. Representations of Rakepoll . . . . . . . . . . 28
ARTICLE VIII
MISCELLANEOUS . . . . . . . . . . . . . 29
SECTION 8.1. Notices . . . . . . . . . . . . . . . . . . . . 29
SECTION 8.2. Amendments; No Waivers . . . . . . . . . . . . 30
SECTION 8.3. Severability . . . . . . . . . . . . . . . . . 30
SECTION 8.4. Entire Agreement; Assignment . . . . . . . . . 31
SECTION 8.5. Parties in Interest . . . . . . . . . . . . . . 31
SECTION 8.6. Specific Performance . . . . . . . . . . . . . 31
SECTION 8.7. Governing Law; Consent to Jurisdiction . . . . 31
SECTION 8.8. Headings . . . . . . . . . . . . . . . . . . . 32
SECTION 8.9. Counterparts . . . . . . . . . . . . . . . . . 32
SECTION 8.10. Effectiveness; Termination . . . . . . . . . . 32
SECTION 8.11. Waiver of Jury Trial . . . . . . . . . . . . . 32
SCHEDULES
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Schedule 2.1 - Securities Outstanding on Closing Date
Schedule 4.1(b) - Directors to Resign
EXHIBITS
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Exhibit A - Composition of the Board of Directors
Exhibit B - Form of Amended and Restated Certificate of
Incorporation
Exhibit C - Form of Amended By-Laws
Exhibit D - Composition of Boards of Directors and Senior
Management of Subsidiaries
SHAREHOLDER'S AGREEMENT, dated as of November 12, 1996, between
Rakepoll Finance N.V., a corporation organized under the laws of the
Netherlands Antilles ("Rakepoll"), and Gensia, Inc., a corporation organized
under the laws of the state of Delaware (the "Company").
W I T N E S S E T H
WHEREAS, concurrently herewith, Rakepoll and the Company are
entering into a Stock Exchange Agreement of even date herewith (the "Stock
Exchange Agreement"); and
WHEREAS, the Boards of Directors of Rakepoll and the Company have
each determined to engage in the transactions contemplated by the Stock
Exchange Agreement, pursuant to which the Company will purchase from the
stock of Rakepoll Holding B.V. a corporation organized under the laws of the
Netherlands in consideration for shares of Common Stock and certain
additional consideration (as defined herein); and
WHEREAS, Rakepoll and the Company desire to establish in this
Agreement certain terms and conditions concerning the corporate governance of
the Company after the Closing Date (as defined in the Stock Exchange
Agreement) and certain terms and conditions concerning the acquisition and
disposition of securities of the Company by Rakepoll and its Affiliates.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and agreements contained herein, Rakepoll and the Company hereby
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. As used in this
Agreement, the following terms have the following meanings:
(a) "Affiliate" has the same meaning as in Rule 12b-2 promulgated
under the Exchange Act.
(b) "Associate" has the same meaning as in Rule 12b-2 promulgated
under the Exchange Act.
(c) "Beneficial owner" and to "beneficially own" has the same
meaning as in Rule 13d-3 promulgated under the Exchange Act.
(d) "Board of Directors" means the Board of Directors of the
Company.
(e) "Common Stock" means the common stock, par value $.01 per
share, of the Company.
(f) "Director" means a member of the Board of Directors.
(g) "Equity Security" means any (i) Common Stock, (ii) securities
of the Company convertible into or exchangeable for Common Stock, and
(iii) options, rights, warrants and similar securities issued by the
Company to acquire Common Stock.
(h) "Exchange Act" means the United States Securities Exchange Act
of 1934, and the rules and regulations promulgated thereunder, as
amended.
(i) "Exon-Xxxxxx" means Section 5021 of the United States Omnibus
Trade and Competitiveness Act of 1988, as amended, and the rules and
regulations thereunder.
(j) "Fair Market Value" means: (i) in the case of a security, the
average of the closing sale prices during the thirty day period
immediately preceding the date in question of such security on the
Composite Tape of the New York Stock Exchange ("NYSE") or, if such
security is not quoted on the Composite Tape, on the NYSE or, if such
security is not listed on the NYSE, on the principal United States
securities exchange registered under the Exchange Act on which such
security is listed or, if such Security is not listed on any such
exchange, the average of the closing sale prices or the average of the
closing bid and the asking quotations of such security during the thirty
day period preceding the date of determination on the Nasdaq National
Market or any system then in use or, if no such quotations are
available, the fair market value on the date in question of such
security as determined by a majority of Independent Directors in good
faith; and (ii) in the case of property other than cash or a security,
the fair market value of such property on the date in question as
determined by a majority of Independent Directors in good faith.
(k) "Holder" shall mean any holder of Registrable Securities.
(l) "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder.
(m) "Independent Director" means a director of the Company (i) who
is not and has never been an officer or employee of the Company, any
Affiliate or Associate of the Company or an entity that derived 10% or
more of its revenues or earnings in its most recent fiscal year from
transactions involving the Company or any Affiliate or Associate of the
Company, (ii) who is not and has never been an officer, employee or
director of Rakepoll any Affiliate or Associate of Rakepoll or an entity
that derived more than 10% of its revenues or earnings in its most
recent fiscal year from transactions involving Rakepoll or any Affiliate
or Associate of Rakepoll, (iii) who is not and has never been a
professional advisor, including without limitation, attorneys,
accountants and financial advisors, to any of the Company, Rakepoll or
any Affiliate or Associate of either of them, and (iv) who was on the
Closing Date deemed to be, or on or after the Closing Date was
designated as, an Independent Director in accordance with Section 4.1.
(n) "Investor Directors" means Directors who are designated for
such position by Rakepoll in accordance with Section 4.1.
(o) "Lock-up Period" means the period of time commencing at the
Closing Date and terminating on the date which is 12 months after the
Closing Date.
(p) "Management Directors" means, at the Closing Date, Directors
who were deemed to be Management Directors in accordance with Section
4.1(b) and, after the Closing Date, Directors who are designated for
such position in accordance with Section 4.1.
(q) "Preferred Stock" means the Company's $3.75 Convertible
Exchangeable Preferred Stock.
(r) "Rakepoll's Initial Interest" means the number of shares of
outstanding Common Stock that is controlled directly or indirectly by
Rakepoll and the Rakepoll Affiliates immediately upon consummation of
the transactions contemplated by the Stock Exchange Agreement.
(s) "Rakepoll's Interest" means, at any time, the number of shares
of outstanding Common Stock that is controlled directly or indirectly by
Rakepoll and the Rakepoll Affiliates.
(t) "Rakepoll's Initial Percentage Interest" means the percentage
of outstanding Common Stock that is controlled directly or indirectly by
Rakepoll and the Rakepoll Affiliates immediately upon consummation of
the transactions contemplated by the Stock Exchange Agreement.
(u) "Rakepoll's Percentage Interest" means, at any time, the
percentage of outstanding Common Stock that is controlled directly or
indirectly by Rakepoll and the Rakepoll Affiliates.
(v) "Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement
or similar document in compliance with the Securities Act and the
declaration or ordering of effectiveness of such registration statement
or document.
(w) "Registrable Securities" shall mean (i) any Equity Security
held by Rakepoll that was issued to Rakepoll by the Company pursuant to,
or otherwise acquired by Rakepoll in accordance with, the terms of this
Agreement or the Stock Exchange Agreement, (ii) any common stock issued
as (or issuable upon the conversion or exercise of any warrant, right,
option or other convertible security which is issued as) a dividend or
other distribution with respect to, or in exchange for, or in
replacement of, such Equity Security, and (iii) any common stock issued
by way of a stock split of the Equity Security referred to in clauses
(i) or (ii) above. For purposes of this Agreement, any Registrable
Securities shall cease to be Registrable Securities when (A) a
registration statement covering such Registrable Securities has been
declared effective and such Registrable Securities have been disposed of
pursuant to such effective registration statement, (B) such Registrable
Securities shall have been distributed pursuant to Rule 144 (or any
similar provision then in effect) under the Securities Act, (C) such
Registrable Securities are sold by a person in a transaction in which
the rights under the provisions of this Agreement are not assigned, or
(D) such Registrable Securities shall cease to be outstanding.
(x) "Registration Expenses" shall mean any and all expenses
incident to performance of or compliance with this Agreement, including,
without limitation, (i) all SEC and securities exchange or National
Association of Securities Dealers, Inc. registration and filing fees,
(ii) all fees and expenses of complying with securities or blue sky laws
(including fees and disbursements of counsel for the underwriters in
connection with blue sky qualifications of the Registrable Securities),
(iii) all printing, messenger and delivery expenses, (iv) all fees and
expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange pursuant to Section 6.4(h), (v)
the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any special
audits and/or "cold comfort" letters required by or incident to such
performance and compliance, (vi) the reasonable fees and disbursements
of one counsel, other than the Company's counsel, selected by the
Holders of a majority of the Registrable Securities being registered to
represent all Holders of the Registrable Securities being registered in
connection with each such registration (it being understood that any
Holder may, at its own expense, retain separate counsel to represent it
in connection with such registration), and (vii) any fees and
disbursements of underwriters customarily paid by the issuers or sellers
of securities, and the reasonable fees and expenses of any special
experts retained in connection with the requested registration, but
excluding underwriting discounts and commissions and transfer taxes, if
any.
(y) "SEC" means the United States Securities and Exchange
Commission.
(z) "Securities Act" means the United States Securities Act of
1933, and the rules and regulations promulgated thereunder, as amended.
(aa) "Standstill Period" means the period of time commencing at
the Closing Date and terminating on the date which is 12 months after
the Closing Date.
(ab) "Subsidiary" has the same meaning as in Rule 12b-2
promulgated under the Exchange Act.
(ac) A "Substantial Part" of the Company means more than 33 1/3%
of the Fair Market Value of the total assets of the Company and its
Subsidiaries as of the end of its most recent fiscal quarter ending
prior to the time the determination is made.
ARTICLE II
ANTI-DILUTION RIGHTS
SECTION 2.1. Anti-Dilution Rights of Rakepoll. Subject to Section
3.1 of this Agreement, if at any time the Board of Directors shall authorize
the issuance of Equity Securities (other than the issuance of securities to
officers, employees or directors of the Company or its Subsidiaries pursuant
to any employee compensation or benefit plan approved by the Board of
Directors or pursuant to the terms of securities outstanding on the Closing
Date, as set forth on Schedule 2.1 hereto), then Rakepoll shall have the
right to acquire, in the open market, as permitted by applicable law, up to
that number of shares of Common Stock so that Rakepoll's Percentage Interest
after such issuance of Equity Securities is equal to, but not greater than,
Rakepoll's Initial Percentage Interest.
ARTICLE III
PURCHASE OF COMMON STOCK
SECTION 3.1. Purchase of Common Stock by Rakepoll. (a) During the
Standstill Period, Rakepoll and the Rakepoll Affiliates shall not directly or
indirectly purchase or otherwise acquire, or propose or offer to purchase or
otherwise acquire, any Common Stock or other securities of the Company,
whether by tender offer, market purchase, privately negotiated purchase,
business combination or otherwise, except (i) with the consent of a majority
of the Independent Directors or (ii) as set forth in subsection (b) below.
(b) The prohibitions contained in Section 3.1(a) shall not apply
(i) in the event of any issuance by the Company of any Equity Securities not
contemplated by the business plan previously agreed to by the parties hereto
(the "Business Plan"), or (ii) following (X) the commencement by any third
party of (1) a bona fide tender or exchange offer to purchase in excess of
20% of the outstanding shares of Common Stock that the Board of Directors
either recommends acceptance of, expresses no opinion and remains neutral
toward or is unable to take a position with respect to, (2) a bona fide
proposal to acquire all or substantially all of the assets of the Company
that the Board of Directors is actively entertaining and the consummation of
which would require approval by the Stockholders of the Company pursuant to
Delaware law or (3) a bona fide proposal to enter into any other similar
business combination transaction with the Company that the Board of Directors
is actively entertaining, in the case of each of clauses (1)-(3), which shall
not have been approved in advance by the Company or the Board of Directors,
or (Y) the Company entering into (or announcing its intention to do so) a
definitive agreement, or an agreement contemplating a definitive agreement,
for any of the transactions described in clauses (1)-(3) above.
ARTICLE IV
CORPORATE GOVERNANCE
SECTION 4.1. Composition of the Board of Directors. (a) Except
as otherwise provided herein, the Board of Directors shall consist of ten
Directors (of whom at least two shall be independent directors as required by
the rules of the Nasdaq National Market System and who shall be deemed to be
Independent Directors hereunder).
(b) Effective as of the Closing Date, the Company shall cause
those of the current Directors set forth in Schedule 4.1(b) to resign from
the Board of Directors. The Company will cause the Board of Directors to
take all necessary action so that at the Closing Date, the Board of Directors
shall consist of (i) two Directors who are executive officers of the Company
(not affiliated with Rakepoll), who shall be Management Directors hereunder;
(ii) three Investor Directors designated by Rakepoll and (iii) five
Independent Directors designated jointly by the Management Directors and
Investor Directors; provided, however, that in the event that on or prior to
the Closing Date the holders of the Preferred Stock of the Company (other
than Rakepoll and its Affiliates) become entitled to appoint 2 directors (the
"Preferred Directors") to the Board of Directors in accordance with the terms
of the Preferred Stock, then (x) the Board of Directors shall be increased
from 10 to 12 Directors and (y) Rakepoll shall thereafter be entitled to
designate an additional Investor Director and one Independent Director shall
resign so that up to 4 of the 12 Directors will be Investor Directors. The
names of the members of the Board of Directors at the Closing Date shall be
as set forth in Part 1 of Exhibit A hereto. After the Closing, the
composition of the Board of Directors shall be determined in compliance with
Section 4.1(c). Management Directors, Investor Directors and Independent
Directors shall be apportioned, to the extent possible, equally among the
three classes of Directors.
(c) At all times during the term of this Agreement that Rakepoll's
Interest is:
(i) 50% or above of Rakepoll's Initial Interest, Rakepoll
shall have the right to designate for nomination and approval three
Investor Directors; the Management Directors shall have the right
to designate for nomination and approval two Management Directors;
and the five Independent Directors shall be designated for
nomination and approval jointly by the Management Directors and the
Investor Directors;
(ii) 25% or above but less than 50% of Rakepoll's Initial
Interest, Rakepoll shall have the right to designate for nomination
and approval two Investor Directors; and there shall be four
Independent Directors who shall be designated for nomination and
approval jointly by the Management Directors and the Investor
Directors;
(iii) 10% or above but less than 25% of Rakepoll's Initial
Interest, Rakepoll shall have the right to designate for nomination
and approval one Investor Director; and there shall be three
Independent Directors who shall be designated for nomination and
approval jointly by the Management Director and the Investor
Director; and
(iv) below 10% of Rakepoll's Initial Interest, Vermouth shall
have no right to designate any Investor Directors or Independent
Directors, and the Management Directors shall have no right to
designate any Management Directors or Independent Directors;
in each case as set forth in Part 2 of Exhibit A hereto. Either (A) at any
time prior to the Closing or (B) after the Closing, if the Investor Directors
have voted for the payment of the dividend owed on the Preferred Stock, in
the event that the holders of the Preferred Stock become entitled to appoint
the Preferred Directors, for so long as such holders are entitled to appoint
the Preferred Directors, the composition of the Board of Directors in the
case of each of (i)-(iv) above shall be as set forth in Part 3 of Exhibit A
hereto.
If at any time the Rakepoll Interest should be reduced with the result that,
in accordance with paragraphs (i) through (iv) above, the number of directors
which Rakepoll is entitled to designate is reduced, then such entitlement
reduction shall extinguish any right Rakepoll may have hereunder to designate
a greater number of directors, notwithstanding any increase in the Rakepoll
Interest which may occur after such entitlement reduction.
Vacancies on the Board of Directors which result from a reduction in
Rakepoll's and the Management Directors' entitlement to designate directors
in accordance with the foregoing shall be filled by election by the
stockholders at large of the Company, in accordance with applicable law, the
Company's Certificate of Incorporation and its Bylaws.
(d) If at any time the number of Investor Directors or Management
Directors on the Board of Directors exceeds the number of such Directors that
Rakepoll or the Management Directors, as the case may be, has the right to
designate in accordance with this Section 4.1, then Rakepoll or the
Management Directors, as appropriate, shall promptly cause to resign, and
take all other action reasonably necessary to cause the prompt removal of,
such number of Investor Directors or Management Directors, as appropriate,
necessary to cause the composition of the Board of Directors to conform to
the provisions of Section 4.1(c). In the event that additional Investor
Directors or Management Directors are required to be designated so that the
composition of the Board of Directors conforms hereto, then the Investor
Directors or the Management Directors, as appropriate, shall designate
replacement directors in accordance with Section 4.1(c).
(e) Subject to Section 4.1(d), Rakepoll and the Management
Directors, respectively, shall have the right to designate any replacement
for any Investor Director or Management Director, as applicable, designated
in accordance with Section 4.1 by Rakepoll or the Management Directors,
respectively, at the termination of such director's term or upon death,
resignation, retirement, disqualification, removal from office or other
cause; provided, however, that if at any time there are no Management
Directors remaining on the Board of Directors, then the Independent Directors
shall designate a member of the senior management of the Company who is not
an affiliate of Rakepoll (other than by virtue of being a senior manager of
the Company) as a replacement(s) for such Management Director.
(f) No individual who is an officer, director, partner or
principal stockholder of any "competitor" of the Company or any of its
Subsidiaries (other than Rakepoll, its Affiliates or officers, directors,
partners or principal stockholders thereof) shall serve as a Director.
For purposes hereof, an entity shall be deemed to be a "competitor" of the
Company if such entity (i) is engaged in the production of injectable generic
pharmaceuticals or fine chemical finished products, or (ii) actually
manufactures any product which is substantially similar in use or purpose to
any product manufactured by the Company, in development by the Company, or in
the funding plan agreed to by the parties hereto (the ("Funding Plan") for
development by the Company or (iii) engaged in the field of oncology or (iv)
is engaged in a business such that the reasonable inference is that such
entity is engaged in substantially the same business as the Company.
SECTION 4.2. Solicitation and Voting of Shares. (a) The Company
shall use its best efforts to solicit from the stockholders of the Company
eligible to vote for the election of Directors proxies in favor of the
nominees designated in accordance with Section 4.1.
(b) In any election of Directors or any meeting of the
stockholders of the Company called expressly for the removal of Directors,
Rakepoll and its Affiliates will vote all of their shares of Common Stock (i)
in favor of any Director or nominee as provided in Section 4.1, (ii) in favor
of the removal of any Director as provided in Section 4.1(d), and (iii)
otherwise against the removal of any director designated under Section 4.1,
provided that no director shall be required to breach his fiduciary duties as
a result of this clause (iii). In addition Rakepoll shall, and shall use its
best efforts to cause its Affiliates to, take such actions as are necessary
as stockholders of the Company to give effect to the provisions of this
Agreement. Subject to Section 4.8, in all other matters submitted to a vote
of the Company stockholders, Rakepoll and its Affiliates may vote any or all
of their shares in their sole discretion.
SECTION 4.3. Management of the Company. (a) At the Closing Date,
(i) An Independent Director shall serve as the non-executive Chairman of the
Board of Directors upon the mutual agreement of the Investor Directors and
the Management Directors; (ii) Xxxxx X. Xxxx shall serve as President and
Chief Executive Officer of the Company; and (iii) Xxxxxxx X. Xxxxxx shall
serve as Executive Vice President of the Company. Each of the Chairman of
the Board, Xxxxx X. Xxxx and Xxxxxxx X. Xxxxxx shall serve in accordance with
the Certificate of Incorporation and By-laws of the Company.
(b) All necessary action to give effect to Section 4.3(a),
including the resignation of Xxxxx X. Xxxx as Chairman of the Board of
Directors effective as of the Closing, shall be taken, or caused to be taken,
by the Company.
(c) At the Closing Date, an Executive Operating Committee, which
shall be a management committee and not a committee of the Board of
Directors, shall be established, consisting of Xxxxx Xxxxx, the President and
Chief Executive Officer, the President of Gensia Laboratories, Inc. and the
Executive Vice President. Xxxxx Xxxxx shall serve as Chairman of the
Executive Operating Committee.
SECTION 4.4. Approval of Investor Directors Required for Certain
Actions. At all such times that Rakepoll's Interest is greater than or equal
to 50% of Rakepoll's Initial Interest, the approval of the Investor Directors
shall be required for the Board of Directors to approve and authorize any of
the following:
(a) the entry by the Company or any of its Subsidiaries into any
merger or consolidation, or the acquisition by the Company or any of its
Subsidiaries of any business or assets that would constitute a
Substantial Part of the business or assets of the Company, whether such
acquisition be by merger or consolidation or the purchase or sale of
stock or assets or otherwise;
(b) the sale, lease, pledge, grant of security interest in,
license, transfer or other disposal by the Company or any of its
Subsidiaries of all or substantially all of the business or assets of
the Company;
(c) the dissolution of the Company; the adoption of a plan of
liquidation of the Company; any action by the Company or any Significant
Subsidiary (as such term is defined in Rule 12b-2 promulgated under the
Exchange Act) thereof to commence any suit, case, proceeding or other
action (A) under any existing or future law of any jurisdiction relating
to bankruptcy, insolvency, reorganization or relief of debtors seeking
to have an order for relief entered with respect to the Company or any
Significant Subsidiary thereof, or seeking to adjudicate the Company or
any Significant Subsidiary thereof a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to the Company or
any Significant Subsidiary thereof, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for the Company
or any Significant Subsidiary thereof, or for all or any Substantial
Part of the assets of the Company or any Significant Subsidiary thereof,
or making a general assignment for the benefit of the creditors of the
Company or any Significant Subsidiary thereof;
(d) the payment of any extraordinary dividend by the Company;
(e) the issuance of debt securities by the Company such that the
principal amount of such debt securities outstanding subsequent to such
issuance is equal to or greater than one hundred and ten percent (110%)
of the aggregate principal amount of debt securities contemplated to be
outstanding at such time under the Business Plan;
(f) the issuance of Equity Securities by the Company such that the
number of shares of such Equity Securities outstanding subsequent to
such issuance is equal to or greater than one hundred and ten percent
(110%) of the aggregate number of Equity Securities contemplated to be
outstanding at such time under the Business Plan; and
(g) the issuance of any debt or equity securities or other capital
stock of any of its Subsidiaries, except the issuance of shares of
capital stock of the Company or options to purchase such shares pursuant
to any employee compensation or benefit plan approved by the Board of
Directors or pursuant to the terms of securities outstanding on the
Closing Date, as set forth in Schedule 2.1 hereto.
If the Company enters into governance arrangements with respect to Automedics
Development, Inc. ("Automedics") which are acceptable to the Investor
Directors, then Automedics will not constitute a Subsidiary for purposes of
this Section 4.4.
SECTION 4.5. Certificate of Incorporation and By-Laws. The
Company shall take or cause to be taken all lawful action necessary to ensure
at all times that the Company's Certificate of Incorporation and By-Laws are
not, at any time, inconsistent with the provisions of this Agreement. In
furtherance of the foregoing, at the special stockholders meeting called to
approve the Stock Exchange Agreement and the transactions set forth therein,
the Company agrees to submit to its stockholders, certain amendments to the
Company's Certificate of Incorporation and By-Laws substantially in the form
of Exhibits B and C hereto.
SECTION 4.6. Funding Plan. The Funding Plan sets forth the
funding plan for the Company for the 3-year period beginning on the date
hereof. The Funding Plan shall be a rolling funding plan and shall be
reviewed at least once a year by the Board of Directors so as to ensure a
rolling three-year business plan. The Funding Plan may be modified only with
the approval of the Board of Directors.
SECTION 4.7. Issuance of Equity Securities During Standstill
Period. No issuance of Equity Securities shall take place during the
Standstill Period except (i) in accordance with the Funding Plan or (ii) with
the approval of the Investor Directors pursuant to Section 4.4(d).
SECTION 4.8. Management of the Subsidiaries. (a) (i) Rakepoll
shall initially have the right to designate a majority of the directors and
the senior managers of each of SICOR S.p.A., Sintesis Xxxxx X.X. de C.V. and
Lermery S.A. de C.V. and (ii) the Management Directors shall be entitled to
designate the balance of the directors and senior managers of each such
company, each of whom shall serve at the pleasure of the Board of Directors
of the Company. The Investor Directors shall have the right to nominate for
the consideration of the Board of Directors replacements for all the
directors and senior managers designated by Rakepoll in accordance with the
previous sentence. The composition at the Closing Date of the board of
directors and senior management of each such company is set forth in Part 1
of Exhibit D hereto.
(b) With respect to Gensia Laboratories, Inc., Rakepoll shall have the
right to designate one director. The composition at the Closing Date of the
board of directors of Gensia Laboratories, Inc. is set forth in Part 2 of
Exhibit D hereto.
SECTION 4.9. Failure to Comply with this Article IV. In addition
to any other remedy at law or in equity which Rakepoll may have, in the event
that any action is taken or omitted to be taken in violation of this Article
IV which results in the failure to nominate or solicit proxies for the
election of the Investor Directors or the failure to elect Investor
Directors, in each case as set forth herein, the taking of any action
specified in Section 4.4(a), or Section 4.4(b) without the required approvals
specified therein, or the failure to comply with Sections 4.1(d) and 4.1(e)
hereof, the provisions of Section 4.2(b) and Articles III and V hereof shall
as of the date of such occurrence or omission be of no further force or
effect.
ARTICLE V
TRANSFER OF COMMON STOCK
SECTION 5.1. Transfer of Common Stock. (a) During the Lock-Up
Period, Rakepoll will not, and will not permit any Rakepoll Affiliate,
directly or indirectly, to sell, transfer or otherwise dispose of any shares
of Common Stock.
(b) During the Lock-Up Period, Rakepoll shall not sell, transfer
or otherwise dispose of any of the capital stock of any Subsidiary of
Rakepoll that owns shares of Common Stock, except to an Affiliate of
Rakepoll; provided that such Affiliate agrees in writing to be bound by the
terms and conditions of this Agreement.
(c) The prohibitions in Sections 5.1(a) and 5.1(b) shall not
apply following the commencement by any third party of a bona fide tender or
exchange offer to purchase in excess of 20% of the outstanding shares of
Common Stock that the Board of Directors either recommends acceptance of,
expresses no opinion and remains neutral towards, or is unable to take a
position with respect to.
(d) Rakepoll and its Affiliates may not sell, transfer or
otherwise convey to any single third party or single group acting in concert
all of Rakepoll's Initial Interest without obtaining the approval of at least
a majority of the Independent Directors of such sale to such single third
party or group, such approval not to be unreasonably withheld and such
determination of the Independent Directors to be given to Rakepoll within 10
days of notification to the Board of Directors by Rakepoll of such
contemplated sale.
(e) Proposed transfers of shares of Common Stock that are not in
compliance with this Article V shall be of no force or effect and the Company
shall not be required to register on its stock records any such transfer.
ARTICLE VI
REGISTRATION RIGHTS
SECTION 6.1. Request for Registration. (a) At any time and from
time to time on and after the first anniversary of the Closing Date, the
Holders of Common Stock that are subject to this Agreement (the "Initiating
Holders") may request in a written notice that the Company file a
registration statement under the Securities Act (or a similar document
pursuant to any other statute then in effect corresponding to the Securities
Act) covering the registration of Registrable Securities held by such
Initiating Holders (constituting in the aggregate at least 5% of the
aggregate Common Stock outstanding immediately upon consummation of the
transaction contemplated by the Stock Exchange Agreement); such notice shall
specify whether the Initiating Holders require the Registrable Securities to
be distributed by means of an underwriting. Following receipt of any notice
under this Section 6.1, the Company shall (x) within ten days notify all
other Holders of such request in writing and (y) thereupon as expeditiously
as possible, use its best efforts to cause to be registered under the
Securities Act all Registrable Securities that the Initiating Holders and
such other Holders have, within ten days after the Company has given such
notice, requested be registered in accordance with the manner of disposition
specified in such notice by the Initiating Holders; provided, that the
Company shall not be obligated to file a registration statement relating to
any registration request under this Section 6.1, (i) if two registration
statements relating to registration requests under this Section 6.1 have
previously been filed and declared effective by the SEC in the calendar year
in which such registration request is made or, (ii) if five registration
statements relating to registration requests under this Section 6.1 have
previously been filed and declared effective by the SEC.
(b) If the Initiating Holders intend to have the Registrable
Securities distributed by means of an underwritten offering, the Company
shall include such information in the written notice referred to in clause
(x) of Section 6.1(a) above. In such event, the right of any Holder to
include its Registrable Securities in such registration shall be conditioned
upon such Holder's participation in such underwritten offering and the
inclusion of such Holder's Registrable Securities in the underwritten
offering (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided below. All
Holders proposing to distribute Registrable Securities through such
underwritten offering shall enter (together with the Company, as provided in
Subsection 6.4(j)) into an underwriting agreement in customary form with the
underwriter or underwriters. No Holder shall be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding
such Holder, the Registrable Securities of such Holder and such Holder's
intended method of distribution and any other representations required by law
or reasonably required by the underwriter. If any Holder of Registrable
Securities disapproves of the terms of the underwriting, such Holder may
elect to withdraw all its Registrable Securities by written notice to the
Company, the managing underwriter and the Initiating Holders. The securities
so withdrawn also shall be withdrawn from registration.
(c) A registration requested pursuant to this section 6.1 shall
not be deemed to have been effected pursuant this Section 6.1 for purposes of
Section 6.6 unless (i) it has been declared effective by the SEC, (ii) it has
remained effective for the period set forth in Section 6.4(a), and (iii) the
offering of Registrable Securities pursuant to such registration is not
subject to any stop order, injunction or other order or requirement of the
SEC (other than any such stop order, injunction, or other requirement of the
SEC prompted by any act or omission of Holders of Registrable Securities).
(d) Selection of Underwriters. If a requested registration
pursuant to this Section 6.1 involves an underwritten offering, the Company
shall have the right to select the investment banker or bankers and managers
to administer the offering; provided, however, that such investment banker or
bankers and managers shall be reasonably satisfactory to Holders of a
majority of the Registrable Securities which the Company has been requested
to register.
(e) Subject to the following sentence, if a requested registration
pursuant to this Section 6.1 involves an underwritten offering and the
managing underwriter advises the Company in writing that, in its opinion, the
number of securities requested to be included in such registration (including
securities of the Company which are not Registrable Securities) exceeds the
number that can be sold in such offering at a price reasonably related to the
then current market value of such securities, the Company will include in
such registration only the Registrable Securities requested to be included in
such registration. In the event that the number of Registrable Securities
requested to be included in such registration exceeds the number which, in
the opinion of such managing underwriter, may be sold at a price reasonably
related to the then current market value of such securities, the number of
such Registrable Securities to be included in such registration shall be
allocated pro rata among all requesting Holders on the basis of the relative
number of shares of Registrable Securities then held by each such Holder
(provided that any shares hereby allocated to any such Holder that exceed
such Holder's request shall be reallocated among the remaining requesting
Holders in like manner). In the event that the number of Registrable
Securities requested to be included in such registration is less than the
number which, in the opinion of the managing underwriter, may be sold at a
price reasonably related to the then current market value of such securities,
the Company may include in such registration the securities the Company
proposes to sell up to the number of securities that, in the opinion of the
managing underwriter, may be sold at a price reasonably related to the then
current market value of such securities. The Company will not include in any
requested registration pursuant to this Section 6.1 any securities which are
not Registrable Securities (other than securities of the Company) without the
prior written consent of the Holders of at least a majority of the
Registrable Securities included in such registration.
(f) If the Board of Directors of the Company, in its good faith
judgment, determines that any registration of Registrable Securities should
not be made or continued due to a valid need not to disclose confidential
information or because it would materially interfere with any material
financing, acquisition, corporate reorganization or merger or other
transaction involving the Company (collectively, a "Valid Business Reason"),
the Company may postpone filing a registration statement relating to a
request for registration under this Section 6.1 for a period of up to 90 days
from the date of the Delay Notice (as defined herein). If any such
registration statement has been filed, the Company may, with respect to a
registration effected pursuant to this Section 6.1 or Section 6.3, postpone
amending or supplementing such registration statement for a period of up to
90 days from the date of the Delay Notice. If the Company decides to
postpone filing a registration statement or an amendment or supplement
thereto, then the Company shall give prompt written notice (a "Delay Notice")
to any holder of Registrable Securities included or to be included in any
such registration statement of its determination to postpone a registration
statement. To be valid, a Delay Notice shall include in reasonable detail
the nature of the Valid Business Reasons occasioning such postponement. In
addition, if prior to the end of the 90-day delay period the Valid Business
Reason should cease to exist, then the Company shall give prompt written
notice to those parties to whom a Delay Notice was delivered stating that the
Valid Business Reason for such postponement no longer exists.
Notwithstanding the foregoing, and without regard to whether the Valid
Business Reason continues or not, at the end of the 90-day period from the
delivery of a Delay Notice, the Company shall cause such registration
statement, amendment or supplement, to be filed with the SEC.
Notwithstanding the foregoing the Company shall be entitled to serve only one
Delay Notice within any 12 month period.
SECTION 6.2. Incidental Registration. Subject to Section 6.7, if
at any time after the first anniversary of the Closing Date the Company
proposes to file a registration statement under the Securities Act (other
than a registration statement on a Form S-4 or S-8 or any successor or
similar forms) on any form that would permit the registration of the
Registrable Securities, whether or not such filing is to be on its behalf,
each such time the Company shall give to each Holder prompt written notice of
such determination setting forth the date on which the Company proposes to
file such registration statement, which date shall be no earlier than twenty-
one days from the date of such notice, and advising each Holder of its right
under this Section 6.2 to have Registrable Securities included in such
registration. Upon the written request of any Holder received by the Company
no later than thirty days after the date of the Company's notice (which
request shall specify the Registrable Securities intended to be included in
such registration by such Holder), the Company shall use its best efforts to
cause to be registered under the Securities Act all of the Registrable
Securities that each such Holder has so requested to be registered; 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 proceed with the proposed registration of the securities to
be sold by it, the Company may, at its election, give written notice of such
determination to each Holder of Registrable Securities and, thereupon, shall
be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay the
Registration Expenses in connection therewith), without prejudice, however,
to the rights of any Holder to request such registration to be effected as a
registration under Section 6.1. If a proposed registration pursuant to this
Section 6.2 involves an underwritten public offering, any Holders making a
request under this Section 6.2 in connection with such registration may elect
in writing, prior to the effective date of the registration statement filed
in connection with such registration, to withdraw such request and not to
have such securities registered in connection with such registration. If, in
the written opinion of the managing underwriter (or, in the case of a
non-underwritten offering, in the written opinion of the Company), the total
amount of such securities to be so registered, including such Registrable
Securities, will exceed the maximum amount of the Company's securities that
can be marketed at a price reasonably related to the then current market
value of such securities, then the Company shall include in such registration
(i) first, all the securities the Company proposes to sell for its own
account or is required to register on behalf of any third party exercising
rights similar to those granted in Section 6.1(a) and without having the
adverse effect referred to above, and (ii) second, to the extent that the
number of securities which the Company proposes to sell for its own account
pursuant to this Section 6.2, or is required to register on behalf of any
third party exercising rights similar to those granted in Section 6.1(a), is
less than the number of equity securities which the Company has been advised
can be sold in such offering without having the adverse effect referred to
above, all Registrable Securities requested to be included in such
registration by the Holders pursuant to this Section 6.2 and all shares of
Common Stock requested to be included by third parties exercising the rights
similar to those granted in this Section 6.2; provided that if the number of
Registrable Securities and other shares of Common Stock requested to be
included in such registration by the Holders pursuant to this Section 6.2 and
third parties exercising rights similar to those granted in this Section 6.2,
together with the number of securities to be included in such registration
pursuant to clause (i) of this Section 6.2, exceeds the number which the
Company has been advised can be sold in such offering without having the
adverse effect referred to above, the number of such Registerable Securities
requested to be included in such registration by the Holders pursuant to this
Section 6.2 shall be limited to such extent and shall be allocated pro rata
among all such requesting Holders and third parties exercising rights similar
to those granted in this Section 6.2 on the basis of the relative number of
Registrable Securities each such Holder has requested to be included in such
registration and the number of shares of Common Stock requested to be
included in such registration by such third parties.
SECTION 6.3. Registration on Form S-3. If at any time after the
first anniversary of the Closing Date (a) any Holder requests in writing that
the Company file a registration statement on Form S-3 or any successor
thereto for a public offering of all or any portion of the Registrable
Securities held by such requesting Holder and (b) the Company is a registrant
entitled to use Form S-3 or any successor thereto, then the Company shall use
its best efforts to register under the Securities Act on Form S-3 or any
successor thereto, for public sale in accordance with the method of
disposition specified in such request, including, without limitation,
pursuant to Rule 415 under the Securities Act, the Registrable Securities
specified in such request. Whenever the Company is required by this Section
6.3 to use its best efforts to effect the registration of Registrable
Securities, each of the limitations, procedures and requirements of Section
6.1(b), (e) and (f) (including but not limited to the requirement that the
Company notify all Holders from whom a request has not been received and
provide them with the opportunity to participate in the offering) shall apply
to such registration. Notwithstanding the foregoing, the Company shall not
be obligated to effect any such registration, qualification or compliance
pursuant to this Section 6.3: (i) if the Holders, together with the holders
of any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $10,000,000; (ii) if the
Company has, within the twelve-month period preceding the date of such
request, already effected two registration on Form S-3 on behalf of the
Holders; (iii) in any jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of process
in effecting such registration qualification or compliance;
SECTION 6.4. Obligations of the Company. Whenever required under
Section 6.1 or Section 6.3 to use its best efforts to effect the registration
of any Registrable Securities, the Company shall, as expeditiously as
possible:
(a) prepare and, in any event with 45 days after, (i) the end of
the period specified in section 6.2 or, (ii) receipt by the Company of a
request under Section 6.1 or 6.3, as the case may be, file with the SEC
a registration statement with respect to such Registrable Securities on
any form for which the Company then qualifies or which counsel for the
Company shall deem appropriate, and which form shall be available for
the sale of the Registrable Securities in accordance with the intended
methods of distribution thereof, and use its best efforts to cause such
registration statement to become and remain effective for the period of
the distribution contemplated thereby determined as provided in
subsection 6.4(b) below; provided, however, that the Company may
discontinue any registration of its securities which is being effected
pursuant to Section 6.2 at any time prior to the effective date of the
registration statement relating thereto;
(b) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective for a period of 180 days or such lesser period of time as the
Company or any Holder may be required under the Securities Act to
deliver a prospectus in connection with any sale of Registrable
Securities, and to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by such
registration statement, and furnish to each Holder of such Registrable
Securities and one counsel acting on behalf of the Holders, such number
of copies of any such amendments and supplements in conformity with the
requirements of the Securities Act prior to their being used or filed
with the SEC, which documents will be subject to the review of such
counsel;
(c) furnish to each Holder and the managing underwriter, if any,
such number of copies of the registration statement and the prospectus
included therein (including each preliminary prospectus and any
amendments or supplements thereto) in conformity with the requirements
of the Securities Act and such other documents and information as they
may reasonably request and make available for inspection by the parties
referred to in Section 6.4(d) below such financial and other information
and books and records of the Company, and cause the officers, directors,
employees, counsel and independent certified public accountants of the
Company to respond to such inquiries, as shall be reasonably necessary,
in the judgment of the respective counsel referred to in such Section,
to conduct a reasonable investigation within the meaning of Section 11
of the Securities Act;
(d) provide (i) the Holders of the Registrable Securities to be
included in such registration statement, (ii) the underwriters (which
term, for purposes of this Agreement, shall include a person deemed to
be an underwriter within the meaning of Section 2(11) of the Securities
Act), if any, thereof, (iii) the sales or placement agent, if any,
therefor, (iv) counsel for such underwriters or agent, and (v) not more
than one counsel for all the Holders of such Registrable Securities the
opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the SEC, and
each amendment or supplement thereto;
(e) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as each Holder shall
reasonably request to keep such registration or qualification in effect
for so long as such registration statement remains in effect, and do any
and all other acts and things which may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such Holder;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business in or to
file a general consent to service of process in any jurisdiction wherein
it would not, but for the requirements of this paragraph (e), be
obligated to do so; and provided further that the Company shall not be
required to qualify such Registrable Securities in any jurisdiction in
which the securities regulatory authority requires that any Holder
submit its Registrable Securities to the terms, provisions and
restrictions of any escrow, lockup or similar agreement(s) for consent
to sell Registrable Securities in such jurisdiction unless such Holder
agrees to do so;
(f) promptly notify counsel for each of the selling Holders of
Registrable Securities, the sales or placement agent, if any, therefor
and the managing underwriter or underwriters, if any, thereof and
confirm such advice in writing, (i) when such registration statement or
the prospectus included therein or any prospectus amendment or
supplement or post-effective amendment has been filed, and, with respect
to such registration statement or any post-effective amendment, when the
same has become effective, (ii) of any comments by the SEC or by any
Blue Sky or securities commissioner or regulator of any state with
respect thereto or any request by the SEC for amendments or supplements
to such registration statement or prospectus or for additional
information, (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of such registration statement or the
initiation or threatening of any proceedings for that purpose, (iv) if
at any time the representations and warranties of the Company contained
in any underwriting agreement or other customary agreement cease to be
true and correct in all material respects or (v) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose;
(g) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of such registration statement or any
post-effective amendment thereto, or the lifting of any suspension of
the qualification of any of the registered Common Stock for sale in any
jurisdiction at the earliest possible date;
(h) promptly notify each Holder for whom such Registrable
Securities are covered by such registration statement, at any time when
a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make, in
light of the circumstances under which they were made, the statements
therein not misleading, and at the request of any such Holder promptly
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, in light of the circumstances under which they were made, the
statements therein not misleading;
(i) furnish, at the request of any Holder requesting registration
of Registrable Securities pursuant to Section 6.1 or Section 6.3, if the
method of distribution is by means of an underwriting, on the date that
the Registrable Securities are delivered to the underwriters for sale
pursuant to such registration, or if such Registrable Securities are not
being sold through underwriters, on the date that the registration
statement with respect to such Registrable Securities becomes effective,
(1) a signed opinion, dated such date, of the independent legal counsel
representing the Company for the purpose of such registration, addressed
to the underwriters, if any, and if such Registrable Securities are not
being sold through underwriters, then to the Holders making such
request, as to such matters as such underwriters or the Holders holding
a majority of the Registrable Securities included in such registration,
as the case may be, may reasonably request and as would be customary in
such a transaction; and (2) letters dated such date and the date the
offering is priced from the independent certified public accountants of
the Company, addressed to the underwriters, if any, and if such
Registrable Securities are not being sold through underwriters, then to
the Holders making such request and, if such accountants refuse to
deliver such letters to such Holders, then to the Company (i) stating
that they are independent certified public accountants within the
meaning of the Securities Act and that, in the opinion of such
accountants, the financial statements and other financial data of the
Company included in the registration statement or the prospectus, or any
amendment or supplement thereto, comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act and (ii) covering such other financial matters (including
information as to the period ending not more than five business days
prior to the date of such letters) with respect to the registration in
respect of which such letter is being given as such underwriters or the
Holders holding a majority of the Registrable Securities included in
such registration, as the case may be, may reasonably request and as
would be customary in such a transaction;
(j) enter into customary agreements (including if the method of
distribution is by means of an underwriting, an underwriting agreement
in customary form, including, without limitation, customary
indemnification provisions consistent with Section 6.11) and take such
other actions as are reasonably required in order to expedite or
facilitate the disposition of the Registrable Securities to be so
included in the registration statement;
(k) use its best efforts to obtain the consent or approval of each
governmental agency or authority, whether federal, state or local, which
may be required to effect registration or the offering or sale in
connection therewith or to enable the selling Holder or Holders to
offer, or to consummate the disposition of, their Registrable
Securities;
(l) cooperate with the Holders of the Registrable Securities and
the managing underwriters, if any, to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be
sold, which certificates shall be printed, lithographed or engraved, or
produced by any combination of such methods, steel engraved borders, if
required, and which shall not bear any restrictive legends; and, in the
case of an underwritten offering, enable such Registrable Securities to
be in such denominations and registered in such names as the managing
underwriters may request at least two business days prior to any sale of
the Registrable Securities;
(m) otherwise comply with all applicable rules and regulations of
the SEC, and make available to its security holders, as soon as
reasonably practicable (but not later than eighteen months) after the
effective date of the registration statement, an earnings statement
covering the period of at least twelve months beginning with the first
full month after the effective date of such registration statement,
which earnings statement shall satisfy the provisions of Section 11(a)
of the Securities Act;
(n) use its best efforts to cause all such Registrable Securities
to be listed on any securities exchange on which the Common Stock is
then listed, if such Registrable Securities are not already so listed
and if such listing is then permitted under the rules of such exchange,
and to provide a transfer agent and registrar for such Registrable
Securities covered by such registration statement no later than the
effective date of such registration statement;
(o) make available for inspection by one counsel on behalf of all
the Holders of the Registrable Securities covered by such registration
statement, by any underwriter participating in any disposition to be
effected pursuant to such registration statement and by any attorney,
accountant or other agent retained by such Holders or any such
underwriter, all pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause all of the
Company's officers, directors and employees to supply all information
reasonably requested by any such counsel, underwriter, attorney,
accountant or agent in connection with such registration statement; and
(p) use its best efforts to make available the executive officers
of the Company to participate with the Holders of Registrable Securities
and any underwriters in any "road shows" or other selling efforts that
may be reasonably requested by the Holders in connection with the
methods of distribution for the Registrable Securities.
For purposes of Sections 6.4(a) and 6.4(b), and with respect to (i)
registration required pursuant to Section 6.1, (A) the period of distribution
of Registrable Securities in a firm commitment underwritten public offering
shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it and (B) the period of
distribution of Registrable Securities in any other registration shall be
deemed to extend until the earlier of the sale of all Registrable Securities
covered thereby and 180 days after the effective date thereof and (ii)
registrations required pursuant to Section 6.3, the period of distribution of
Registrable Securities in any registration (firm commitment underwritten or
otherwise) shall be deemed to extend until the earlier of the sale of all
Registrable Securities covered thereby and two years after the effective date
thereof.
Each Holder of Registrable Securities agrees that, upon receipt of
any notice from the Company of the happening of any event of the kind
described in Section 6.4(h), such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such Holder's receipt of the
copies of the supplemented or amended prospectus contemplated by Section
6.4(h), and, if so directed by the Company, such Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file
copies then in such Holder's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice;
provided, however, that any period of time during which a Holder must
discontinue disposition of Registrable Securities shall not be included in
the determination of a period of distribution for purposes of Sections 6.4(a)
and 6.4(b).
SECTION 6.5. Furnish Information. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to
this Agreement that the Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them, and the
intended method of disposition of such securities as the Company may from
time to time reasonably request in writing and as shall be required in
connection with the action to be taken by the Company.
SECTION 6.6. Expenses of Registration. All Registration Expenses
in connection with (i) each registration or attempted registration pursuant
to Section 6.2, (ii) the first five registrations effected pursuant to
Section 6.1 or 6.3 and (iii) any attempted registration (or partial
registration deemed not to have been effected pursuant to Section 6.1 or 6.3
by operation of Sections 6.1(c) or (e)) occurring prior to the fifth
registration effected pursuant to Section 6.1 or 6.3 of this Agreement,
excluding underwriters' discounts and commissions, shall be paid by the
Company; provided, however, that the Company shall not be required to pay for
any Registration Expenses of any registration proceeding begun pursuant to
Section 6.1 or 6.3 if the registration request is subsequently withdrawn at
the request of the Holders of a majority of the Registrable Securities to be
registered (in which case all participating Holders shall bear such
expenses), unless the Holders of a majority of the Registrable Securities
agree to forfeit their right to one demand registration pursuant to Section
6.1; provided further, however, that if at the time of such withdrawal, the
Holders have learned of a material adverse change in the condition, business
or prospects of the Company not actually known by the Holders at the time of
their request for registration, then the Holders shall not be required to pay
any of such expenses and shall retain in full their rights pursuant to
Sections 6.1 and 6.3. The foregoing provisions with respect to expenses
shall in no way limit the rights of the Holders to request registration
pursuant to Sections 6.1 and 6.3 or the number of registrations which may be
requested thereunder.
SECTION 6.7. Underwriting Requirements. In connection with any
underwritten offering, the Company shall not be required under Section 6.2 to
include Registrable Securities in such underwritten offering unless the
Holders of such Registrable Securities accept the terms of the underwriting
of such offering that have been reasonably agreed upon between the Company
and the underwriters selected by the Company; provided, that the Company
shall not agree to lock-up periods in excess of 120 days in connection with
any such offerings.
SECTION 6.8. Rule 144 and Rule 144A Information. With a view to
making available the benefits of certain rules and regulations of the SEC
which may at any time permit the sale of the Registrable Securities to the
public without registration, at all times, the Company agrees to:
(i) make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities
Act;
(ii) use its best efforts to file with the SEC in a timely
manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act; and
(iii) furnish to each Holder of Registrable Securities
forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of such Rule 144 and of
the Securities Act and the Exchange Act, a copy of the most recent
annual or quarterly report of the Company, and such other reports
and documents so filed by the Company as such Holder may reasonably
request in availing itself of any rule or regulation of the SEC
allowing such Holder to sell any Registrable Securities without
registration.
SECTION 6.9. Delay of Registration. No Holder, other than
Rakepoll, shall have any right to obtain or seek an injunction restraining or
otherwise delaying any such registration as the result of any controversy
that might arise with respect to the interpretation or implementation of this
Article VI.
SECTION 6.10. Indemnification. In the event any Registrable
Securities are included in a registration statement under this Agreement:
(a) The Company shall indemnify and hold harmless each Holder,
such Holder's directors and officers, and each person, if any, who
controls such Holder or participating person within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any
such action or claim) to which they may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or proceedings in respect thereof) arise out of or are
based on any untrue or alleged untrue statement of a material fact
contained in such registration statement, preliminary prospectus, final
prospectus or amendments or supplements thereto or arise out of or are
based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the indemnity agreement
contained in this Section 6.10(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); provided further that the Company
shall not be liable to any Holder, such Holder's directors and officers
or controlling person in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in connection with such registration statement,
preliminary prospectus, final prospectus or amendments or supplements
thereto, in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by any
such Holder, such Holder's directors and officers or controlling person;
provided, further, that as to any preliminary prospectus or any final
prospectus this indemnity agreement shall not inure to the benefit of
any Holder, such Holder's directors and officers or controlling persons
on account of any losses, claims, damages or liability arising from the
sale of Common Stock to any person by such Holder if such Holder or its
representatives failed to send or give a copy of the final prospectus or
a prospectus supplement, as the case may be (excluding documents
incorporated by reference therein), as the same may be amended or
supplemented, to that person within the time required by the Securities
Act, and the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact in such
preliminary prospectus or final prospectus was corrected in the final
prospectus or such prospectus supplement, as the case may be (excluding
documents incorporated by reference therein), unless such failure
resulted from non-compliance by the Company with Section 6.4(c). Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any such Holder, such Holder's
directors and officers, participating person or controlling person, and
shall survive the transfer of such securities by such Holder.
(b) Each Holder requesting or joining in a registration severally
and not jointly shall indemnify and hold harmless the Company, each of
its directors and officers and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to the Holders but only with reference to
written information relating to such Holder furnished to the Company
expressly for use in connection with such registration; provided,
however, that the indemnity agreement contained in this Section 6.10(b)
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 such Holder (which consent shall not be unreasonably
withheld); and provided further that the liability of each Holder
hereunder shall be limited to the proportion of any such loss, claim,
damage, liability or expense that is equal to the proportion that the
net proceeds from the sale of the shares sold by such Holder under such
registration statement bears to the total net proceeds from the sale of
all securities sold thereunder, but not in any event to exceed the net
proceeds received by such Holder from the sale of Registrable Securities
covered by such registration statement.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to either of the two preceding
paragraphs, such person (the "indemnified party") shall promptly notify
the person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly notified, to assume
the defense thereof with counsel mutually satisfactory to the parties.
The indemnifying party shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection
with any proceeding or related proceedings in the same jurisdiction, be
liable for the fees and expenses of more than one separate firm (in
addition to any local counsel) for all such indemnified parties and that
all such fees and expenses shall be reimbursed as they are incurred.
Such firm shall be designated in writing by the Holders, in the case of
parties indemnified pursuant to the second preceding paragraph, and by
the Company, in the case of parties indemnified pursuant to the first
preceding paragraph. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such
settlement is entered into more than thirty days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with
such request prior to the date of such settlement. No indemnifying
party shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such proceeding. The failure to deliver written notice to the
indemnifying party promptly following of the commencement of any such
action shall not relieve the indemnifying party of its obligations under
this Section 6.10, except to the extent that the failure so to deliver
the notice is prejudicial to the indemnifying party's ability to defend
such action.
(d) If the indemnification provided for in Section 6.10(a) and/or
(b) is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect
the relative fault of the indemnifying party and indemnified party in
connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party
and indemnified party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged
untrue statement of material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or
payable by a party as a result of the losses, claims, damages or
liabilities referred to above shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in connection
with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.10(d) were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section
6.10, no Holder shall be required to contribute any amount in excess of
the amount of net proceeds received by such Holder from the sale of
Registrable Securities covered by such registration statement. 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.
The remedies provided for in this Section 6.10 are not exclusive and
shall not limit any right or remedies that may otherwise be available to
any indemnified party at law or in equity.
SECTION 6.11. Lock-up in connection with a Registration of
Securities. Each Holder shall, in connection with any registration of the
Company's securities, upon the request of the Company or the underwriters
managing any underwritten offering of such securities, agree in writing not
to effect any sale, disposition or distribution of any Registrable Securities
(other than that included in the registration) without the prior written
consent of the managing underwriter for such reasonable and customary period
of time (not to exceed 120 days) from the effective date of such registration
as the Company or the underwriters may specify; provided, however, that all
executive officers and directors of the Company (other than executive
officers and directors owning an aggregate of less than 1% of the outstanding
Common Stock as of the effective date of such registration statement) shall
also have agreed not to effect any sale, disposition or distribution of any
Registrable Securities under the circumstances and pursuant to the terms set
forth in this Section 6.11.
In order to enforce the foregoing covenant in this Section 6.11,
the Company may impose stop-transfer instructions with respect to the
Registrable Securities of each Holder (and the shares or securities of every
other person subject to the foregoing restriction), which stop-transfer
instructions shall only be effective until the end of such reasonable and
customary period.
SECTION 6.12. Transfer of Registration Rights. The registration
rights of any Holder under this Agreement with respect to the Registrable
Securities may be transferred to any transferee of such Registrable
Securities who acquires any Registrable Securities of any Holder; provided
that such registration rights may not be transferred to a holder of less than
2.5% of the outstanding Common Stock unless such transferee is a Rakepoll
Affiliate (or a partner of a Rakepoll Affiliate); provided, further, that
(i) the transferring Holder shall give the Company written notice at or prior
to the time of such transfer stating the name and address of the transferee
and identifying the securities with respect to which the rights under this
Agreement are being transferred, (ii) such transferee shall agree in writing,
in form and substance reasonably satisfactory to the Company, to be bound as
a Holder by the provisions of this Article VI, and (iii) immediately
following such transfer the further disposition of such securities by such
transferee is restricted under the Securities Act.
SECTION 6.13. Selection of Counsel. In connection with any
registration of Registrable Securities pursuant to Sections 6.1, 6.2 and 6.3
hereof, the Holders of a majority of the Registrable Securities covered by
any such registration may select one counsel to represent all Holders of
Registrable Securities covered by such registration; provided, however, that
in the event that the counsel selected as provided above is also acting as
counsel to the Company in connection with such registration, the remaining
Holders shall be entitled to select one additional counsel to represent all
such remaining Holders.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations of the Company. As of the date
hereof and as of the Closing Date the Company represents and warrants as
follows:
(a) Authority Relative to This Agreement. The Company has all
necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby (the "Transactions"). The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
Transactions have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
Transactions. This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due authorization, execution
and delivery by Rakepoll, constitutes legal, valid and binding
obligations of the Company.
(b) No Conflict. The execution and delivery by the Company of
this Agreement do not, and the performance of this Agreement by the
Company will not, (i) conflict with or violate the Certificate of
Incorporation or By-Laws of the Company or any of its Subsidiaries, (ii)
conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to the Company or any of its Subsidiaries or by which
any property or asset of the Company or any of its Subsidiaries is bound
or affected, or (iii) result in any breach of or constitute a default
(or an event which with notice or lapse of time or both would become a
default) under, or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
other encumbrance on any property or asset of the Company or any of its
Subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of its Subsidiaries is a party or
by which the Company or any of its Subsidiaries or any property or asset
of the Company or any of its Subsidiaries is bound or affected, except
for any such breaches, defaults or other occurrences which would not,
individually or in the aggregate, have a material adverse effect on the
results of operations, financial condition or business of the Company
and its Subsidiaries, taken as a whole.
(c) Required Filings and Consents. The execution and delivery by
the Company of this Agreement do not, and the performance of this
Agreement by the Company will not, require any consent, approval,
authorization or permit of, or filing by the Company with or
notification to, any governmental or regulatory authority, domestic or
foreign, except (i) for applicable requirements, if any, of the
Securities Act, the Exchange Act, state blue sky and takeover laws, (ii)
the HSR Act, (iii) Exon-Xxxxxx, and (iv) where failure to obtain such
consents, approvals, authorizations or permits, or to make such filings
or notifications, would not prevent or delay the Company from performing
its obligations under this Agreement and would not, individually or in
the aggregate, have a material adverse effect on the results of
operations, financial condition or business of the Company and its
Subsidiaries, taken as a whole.
SECTION 7.2. Representations of Rakepoll. As of the date hereof
and as of the Closing Date Rakepoll represents and warrants as follows:
(a) Authority Relative to This Agreement. Rakepoll has all
necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the Transactions.
The execution and delivery of this Agreement by Rakepoll and the
consummation by Rakepoll of the Transactions have been duly and validly
authorized by all necessary corporate action and no other corporate
proceedings on the part of Rakepoll are necessary to authorize this
Agreement or to consummate the Transactions. This Agreement has been
duly and validly executed and delivered by Rakepoll and, assuming the
due authorization, execution and delivery by the Company constitutes
legal, valid and binding obligations of Rakepoll.
(b) No Conflict. The execution and delivery by Rakepoll of this
Agreement do not, and the performance of this Agreement by Rakepoll will
not, (i) conflict with or violate the Certificate of Incorporation or
By-Laws of Rakepoll or any of its Subsidiaries, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable
to Rakepoll or any of its Subsidiaries or by which any property or asset
of Rakepoll or any of its Subsidiaries is bound or affected, or (iii)
result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give
to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of Rakepoll or any of its
Subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which Rakepoll or any of its Subsidiaries is a party or by
which Rakepoll or any of its Subsidiaries or any property or asset of
Rakepoll or any of its Subsidiaries is bound or affected, except for any
such breaches, defaults or other occurrences which would not,
individually or in the aggregate, have a material adverse effect on the
results of operations, financial condition or business of Rakepoll,
taken as a whole.
(c) Required Filings and Consents. The execution and delivery by
Rakepoll of this Agreement do not, and the performance of this Agreement
by Rakepoll will not, require any consent, approval, authorization or
permit of, or filing by Rakepoll with or notification to, any
governmental or regulatory authority, domestic or foreign, except for
(i) applicable requirements, if any, of the Securities Act, the Exchange
Act, state blue sky and takeover laws, (ii) the HSR Act, (iii) Exon-
Xxxxxx, and (iv) where failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications,
would not prevent or delay Rakepoll from performing its obligations
under this Agreement and would not, individually or in the aggregate,
have a material adverse effect on the results of operations, financial
condition or business of Rakepoll, taken as a whole.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly received if so given) by hand delivery, by
mail (registered or certified mail, postage prepaid, return receipt
requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses, or to such other address as
any party hereto may hereafter notify to the other parties hereto:
if to Rakepoll, to:
Xxxxxxxx Xxxxxxx X.X.
00 XX Xxxxxxxxxx
Xxxxxxx, Xxxxxxxxxxx Antilles
Attention: Xxxxx Xxxxx
with a copy to:
Xxxxx Xxxxx
Xxx Xxx Xxxxxxxxx, 0
Xx 0000 Xxxxxx
Xxxxxxxxxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
21st Floor
99 Xxxxxxxxxxx
Xxxxxx, XX0X 0XX
Attention: Xxxx X. Xxxxx
if to the Company, to:
Gensia, Inc.
0000 Xxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention:
with a copy to:
Pillsbury Madison & Sutro LLP
000 Xxxxxxxxxx Xxxxxx,
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
If to a Transferee of Registrable Securities:
At the address set forth in the notice required to be
delivered pursuant to Section 6.11 hereof.
SECTION 8.2. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver
is in writing and signed, in the case of an amendment, by Rakepoll and the
Company, or in the case of a waiver, by the party against whom the waiver is
to be effective; provided that following the Closing Date no such amendment
or waiver by the Company shall be effective without the approval of a
majority of the Independent Directors.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 8.3. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the Transactions is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner
in order that the Transactions be consummated as originally contemplated to
the fullest extent possible.
SECTION 8.4. Entire Agreement; Assignment. This Agreement and the
Stock Exchange Agreement and the agreements contemplated hereby and thereby
constitute the entire agreement among the parties with respect to the subject
matter hereof and thereof and supersede, except as set forth in the Stock
Exchange Agreement, all prior agreements and undertakings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof. This Agreement shall not be assigned by operation of law or
otherwise, except that Rakepoll, other than with respect to Article IV
hereof, may assign all or any of its rights and obligations hereunder to any
of its Affiliates in connection with a transfer of Common Stock; provided
that (a) no such assignment shall relieve Rakepoll of its obligations
hereunder and (b) Rakepoll may assign its rights to the extent and as
provided in Section 6.12.
SECTION 8.5. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in
this Agreement, express or implied, is intended to or shall confer upon any
other person any right, benefit or remedy of any nature whatsoever under or
by reason of this Agreement.
SECTION 8.6. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or equity.
SECTION 8.7. Governing Law; Consent to Jurisdiction. (a) This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York applicable to contracts executed in and to be performed
in the State of New York. All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined in any New York
state or federal court thereof.
(b) The parties hereto unconditionally and irrevocably agree and
consent to the exclusive jurisdiction of, and service of process and value
in, the United States District Court for the Southern District of New York
and the courts of the State of New York located in the City of New York, and
waive any objection with respect thereto, for the purpose of any action, suit
or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby and further agree not to commence any such
action, suit or proceeding except in any such court. Each party irrevocably
waives any objections or immunities to jurisdiction to which it may otherwise
be entitled or become entitled (including immunity to pre-judgment
attachment, post-judgment attachment and execution) in any legal suit, action
or proceeding against it arising out of or relating to this Agreement or the
transactions contemplated hereby which is instituted in any such court.
Rakepoll hereby appoints CT Corporation System, located at 0000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, as its authorized agent (the "Rakepoll Authorized
Agent") upon whom process may be served in any such action arising out of or
relating to this agreement or the transactions contemplated hereby which may
be instituted in the United States District Court for the Southern District
of New York or the courts of the State of New York located in the City of New
York by any other party hereto. Such appointment shall be irrevocable.
Rakepoll agrees to take any and all action, that may be necessary to continue
such appointment in full force and effect as aforesaid. Service of process
upon the Authorized Agent and written notice of such service to Olive shall
be deemed, in every respect, effective service of process upon Rakepoll.
SECTION 8.8. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.
SECTION 8.9. Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which
when executed and delivered shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement.
SECTION 8.10. Effectiveness; Termination. This Agreement shall
become effective as of the Closing Date and shall terminate at such time as
Rakepoll and its Affiliates no longer own any such shares. Article IV hereof
shall terminate and have no further effect at such time as Rakepoll ceases to
be entitled to designate any Investor Directors in accordance with Section
4.1.
SECTION 8.11. Waiver of Jury Trial. Rakepoll and the Company each
hereby irrevocably waive all right to trial by jury in any action, proceeding
or counterclaim (whether based on contract, tort or otherwise) arising out of
or relating to this Agreement or the actions of Rakepoll or the Company in
the negotiation, administration, performance and enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
GENSIA, INC.
By: /s/ Xxxxx X. Xxxx
-----------------------------
Name: Xxxxx X. Xxxx
Title: Chairman of the Board
RAKEPOLL FINANCE N.V.
By: /s/ Xxxxx Xxxxx
-----------------------------
Name: Xxxxx Xxxxx
Title: Chairman of the Board
AMENDMENT NO. 1 TO SHAREHOLDER'S AGREEMENT
------------------------------------------
AMENDMENT NO. 1 (the "Amendment"), dated as of December 20, 1996,
to the Shareholder's Agreement, dated as of November 12, 1996 (the
"Agreement"), between Gensia, Inc., a corporation organized under the laws of
Delaware (the "Company"), and Rakepoll Finance N.V., a corporation organized
under the laws of the Netherlands Antilles ("Rakepoll Finance").
W I T N E S S E T H :
WHEREAS, the Company and Rakepoll Finance are parties to the
Agreement; and
WHEREAS, the Company and Rakepoll Finance wish to revise the
definition of "competitor" set forth in Section 4.1 of the Agreement; and
WHEREAS, Section 8.2(a) of the Agreement provides that the
Agreement may be amended in a writing signed by the Company and Rakepoll
Finance;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions; References. Capitalized terms used in this
Amendment but not defined herein shall have the meanings ascribed to them in
the Agreement.
2. Amendment of Section 4.1. Section 4.1 of the Agreement is
hereby amended by deleting in its entirety the last paragraph of Section 4.1
and substituting in lieu thereof the following:
"For purposes hereof, an entity shall be deemed to be a
"competitor" of the Company if such entity (i) is engaged in the
production of active ingredients or finished dosage forms either in
the oncological field or for parenteral use, not currently produced
by the Company or any subsidiary of Rakepoll Holding B.V., or (ii)
actually manufactures any product which is substantially similar in
use or purpose to any product manufactured by the Company, in
development by the Company, or in the funding plan agreed to by the
parties hereto (the ("Funding Plan") for development by the Company
or (iii) is engaged in a business such that the reasonable
inference is that such entity is engaged in substantially the same
business as the Company. For purposes of this paragraph, the term
"Company" shall refer to the Company as constituted in accordance
with the Stock Exchange Agreement and this Agreement."
3. Full Force and Effect. Except as modified, amended or
supplemented above, all rights, terms and conditions of the Agreement shall
remain in full force and effect.
4. Governing Law. This Amendment shall be governed by and
construed under the laws of the State of New York (irrespective of its choice
of law principles).
5. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment to the
Agreement as of the date first written above.
GENSIA, INC.
By: /s/ Xxxxx X. Xxxx
-------------------------
Name: Xxxxx X. Xxxx
Title: Chairman of the Board
RAKEPOLL FINANCE N.V.
By: /s/ Xxxxx Xxxxx
-------------------------
Name: Xxxxx Xxxxx
Title: Chairman of the Board
AMENDMENT NO. 2 TO SHAREHOLDER'S AGREEMENT
------------------------------------------
AMENDMENT NO. 2 (the "Amendment"), dated as of February 28, 1997,
to the Shareholder's Agreement, dated as of November 12, 1996, as amended by
Amendment No. 1 dated as of December 16, 1996 (the "Agreement"), between
Gensia, Inc., a corporation organized under the laws of Delaware (the
"Company"), and Rakepoll Finance N.V., a corporation organized under the laws
of the Netherlands Antilles ("Rakepoll Finance").
W I T N E S S E T H :
WHEREAS, the Company and Rakepoll Finance are parties to the
Agreement; and
WHEREAS, the Company and Rakepoll Finance wish to amend Exhibits A
and D to the Agreement; and
WHEREAS, Section 8.2(a) of the Agreement provides that the
Agreement may be amended in a writing signed by the Company and Rakepoll
Finance;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions; References. Capitalized terms used in this
Amendment but not defined herein shall have the meanings ascribed to them in
the Agreement.
2. Amendment of Exhibit A. Part 1 of Exhibit A to the Agreement
is hereby amended by:
(a) deleting from Part 2 thereof (Initial Investor Directors) the name
Xxxxx Xxxxxx, and
(b) by adding to the end of Part 3 thereof (Initial Independent
Directors) the name "Xxxxxx Panoz".
3. Amendment of Exhibit D.
(a) Part 1 of Exhibit D to the Agreement is hereby amended by adding to
the end of Part 1.A thereof (Sicor S.p.A., Directors) the following name
"Xxxxx Xxxxx".
(b) Exhibit D is further hereby amended by adding to the end of Part 1
thereof a new Part 4.A which shall read in its entirety as follows:
"4. Rakepoll Holding B.V.
A. Directors:
Xxxxx Xxxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxx"
4. Amendment of Section 4.1. Section 4.1 of the Agreement is
hereby amended by deleting in its entirety the second sentence of paragraph
(b) thereof and substituting in lieu thereof the following sentence:
"Notwithstanding anything to the contrary contained herein, at the
Closing Date, the names of the members of the Board of Directors
shall be as set forth in Part 1 of Exhibit A hereto; provided,
however, that to preserve the provisions of this Agreement,
Rakepoll shall continue to have the right to designate for
nomination and approval three Investor Directors as provided for in
this Section 4.1; provided, further, that the Company shall cause
(i) at any time after the Closing Date, upon the request of Xxxxx
Xxxxx, the Board of Directors to take all action necessary to
promptly appoint to the Board of Directors an Investor Director
nominated by Rakepoll, and (ii) a current Independent Director
(other than Xxxxxx Panoz) to resign from the Board of Directors by
a date no later than March 10, 1997.
5. Full Force and Effect. Except as modified, amended or
supplemented above, all rights, terms and conditions of the Agreement shall
remain in full force and effect.
6. Governing Law. This Amendment shall be governed by and
construed under the laws of the State of New York (irrespective of its choice
of law principles).
7. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment to the
Agreement as of the date first written above.
GENSIA, INC.
By: /s/ Xxxxx X. Xxxx
------------------------------------------
Name: Xxxxx X. Xxxx
Title: Chairman of the Board
RAKEPOLL FINANCE N.V.
By: /s/ Xxxxx Xxxxx
------------------------------------------
Name: Xxxxx Xxxxx
Title: Chairman of the Board
