EXECUTION COPY
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
NAPRO BIOTHERAPEUTICS, INC.
AND
XXXXXX LABORATORIES
JULY 23, 1999
EXECUTION COPY
TABLE OF CONTENTS
Page
RECITALS..................................................................................................1
TERMS AND CONDITIONS......................................................................................1
1. Definitions..............................................................................1
2. Purchase and Sale........................................................................4
(a) Purchase and Sale of the Initial Shares..........................................4
(b) Purchase and Sale of the Additional Shares.......................................4
(c) Conditions to Obligations of Abbott to Purchase Additional Shares................5
(d) Conditions to Obligations of NaPro for the Additional Shares.....................7
(e) Certain Adjustments..............................................................7
3. Representations and Warranties of NaPro..................................................8
(a) Authority of NaPro...............................................................8
(b) Validity.........................................................................9
(c) Capitalization...................................................................10
(d) SEC Filings......................................................................11
(e) Absence of Certain Changes.......................................................13
(f) ERISA............................................................................13
(g) Proprietary Rights...............................................................13
(h) Litigation.......................................................................13
(i) Investment Company...............................................................14
4. Representations and Warranties of Abbott.................................................14
(a) Authority of Abbott..............................................................14
(b) Validity.........................................................................14
(c) Resale...........................................................................15
(d) Receipt of Information...........................................................15
5. Registration Rights......................................................................15
(a) Demand Registration Rights.......................................................16
(b) Conditions to Demand Registration................................................16
(c) Piggyback Registration...........................................................17
(d) Expenses.........................................................................19
(e) Indemnification..................................................................19
(f) Provisions Applicable to all Registrations.......................................21
6. Certain Limitations......................................................................28
7. Holdback.................................................................................29
8. SEC Filings; Public Information..........................................................30
9. [Reserved]...............................................................................30
10. Listing of Shares........................................................................30
11. Press Releases...........................................................................31
12. Alternative Dispute Resolution...........................................................31
(a) Contract Breach/Cure.............................................................31
(b) Disputes, etc....................................................................32
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(c) Exclusive Remedy.................................................................32
(d) Judicial Review..................................................................32
13. Miscellaneous............................................................................32
(a) Survival.........................................................................32
(b) Parties and Interest.............................................................33
(c) Entire Transaction...............................................................33
(d) Assignment.......................................................................33
(e) Counterparts.....................................................................33
(f) Headings.........................................................................33
(g) Notices..........................................................................33
(h) Governing Law....................................................................35
(i) Amendments and Waivers...........................................................35
(j) Severability.....................................................................35
(k) Expenses.........................................................................35
(l) Construction.....................................................................36
(m) Restrictions on Transfer.........................................................36
(n) Legends..........................................................................37
(o) Specific Performance.............................................................38
(p) Incorporation of Schedules.......................................................38
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into as of
July 23, 1999, by and between NaPro BioTherapeutics, Inc., a Delaware
corporation ("NaPro"), and Xxxxxx Laboratories, an Illinois corporation
("Abbott"). Each of NaPro and Abbott are referred to in this Agreement as a
"Party" and collectively, the "Parties."
RECITALS
WHEREAS, NaPro and Abbott are simultaneously with this Agreement
entering into a Development, License and Supply Agreement dated as of July 23,
1999 (the "Development Agreement") pursuant to which, among other things, (i)
Abbott will purchase bulk Paclitaxel from NaPro, (ii) Abbott and NaPro shall
work together to develop and obtain necessary regulatory approvals for one or
more formulations of Paclitaxel, (iii) Abbott will obtain a license to certain
technology owned by NaPro covering formulation or use of Paclitaxel, and (iv)
Abbott may manufacture and will sell finished Paclitaxel products(s);
WHEREAS, NaPro and Abbott are simultaneously with this Agreement
entering into a Loan and Security Agreement dated as of July 23, 1999 (the "Loan
Agreement") in part to finance the process of developing formulations of
Paclitaxel;
WHEREAS, Abbott wishes to subscribe for and purchase, and NaPro wishes
to issue and sell, certain shares of the voting Common Stock, par value $.0075
per share (the "Common Stock"), of NaPro identified in Section 2, on the terms
and subject to the conditions of this Agreement.
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NOW, THEREFORE, in consideration of the premises and the respective
promises made in this Agreement, and in consideration of the representations,
warranties, and covenants contained in this Agreement, the Parties agree as
follows:
TERMS AND CONDITIONS
1. Definitions.
"Abbott" shall have the meaning set forth in the preamble to this
Agreement.
"Affiliate" shall mean with respect to a Person, any other person
Controlling, Controlled by or under common Control with such Person. With
respect to Abbott, the term "Affiliate" shall specifically exclude TAP Holdings
Inc., TAP Finance Inc. and TAP Pharmaceuticals Inc.
"Additional Closing Dates" shall mean each of the First Additional
Closing Date and the Second Additional Closing Date.
"Additional Shares" shall mean each of the First Additional Shares and
the Second Additional Shares.
"Application for Regulatory Approval" shall have the meaning given it
in the Development Agreement.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of Chicago are authorized by law to close.
"Change in Control" shall mean a merger of NaPro with or into, or the
sale of all or substantially all of the assets of NaPro to, any company the
equity market capitalization of which is at least fifteen billion dollars
($15,000,000,000) and that is engaged primarily in the manufacture, distribution
or sale of pharmaceutical or health care products.
"Common Stock" shall have the meaning set forth in the Recitals to this
Agreement.
"Control" and the correlative terms "Controlling" and "Controlled"
shall mean the power, whether or not exercised, directly or indirectly to direct
the management and policies of a Person whether by contract, through the
ownership of voting securities or otherwise.
"Development Agreement" shall have the meaning set forth in the
Recitals to this Agreement.
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"Development Committee' shall have the meaning given it in the
Development Agreement.
"Development Program" shall have the meaning given it in the
Development Agreement.
"FDA" shall have the meaning given it in the Development Agreement.
"Finished Product" shall have the meaning given it in the Development
Agreement.
"First Additional Closing Date" shall have the meaning given in Section
2(b)(iii).
"First Additional Shares" shall have the meaning set forth in Section
2(b)(i).
"Initial Shares" shall have the meaning set forth in Section 2(a)(i).
"Knowledge" means actual knowledge after reasonable inquiry and
investigation.
"NaPro" shall have the meaning set forth in the preamble to this
Agreement.
"NDA" shall have the meaning given it in the Development Agreement.
"Paclitaxel" shall have the meaning given it in the Development
Agreement.
"Person" means an individual, partnership, trust, corporation, joint
venture, limited liability company, association, government bureau or agency or
other entity of whatever kind or nature.
"Primary Offering" shall have the meaning given it in Section 5(b).
"Registrable Securities" means shares of Common Stock, other than the
Registrable Shares, that are subject to registration rights under written
agreements with NaPro.
"Registrable Shares" means (i) such of the Shares as have been issued
at any time, (ii) any other securities received on account of such of the Shares
as have been issued at any time in any stock split, stock dividend,
recapitalization, merger, consolidation or similar event, and (iii) any other
shares of Common Stock acquired pursuant to the terms of this Agreement and any
other securities received on account of such shares in any stock split, stock
dividend, recapitalization, merger, consolidation or similar event; provided,
however, that such securities will cease to be Registrable Shares when they (i)
have been distributed to the public pursuant to an offering registered under the
Securities Act, (ii) have been sold in compliance with an exemption under the
Securities Act, (iii) may, in the opinion of counsel to NaPro addressed to
Abbott and NaPro, reasonably satisfactory to Abbott and its counsel, be offered
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and sold by Abbott without registration under the Securities Act pursuant to
Rule 144(k) and that following such offer and sale, such Registrable Shares
shall not be "restricted securities" within the meaning of Rule 144, or (iv)
shall have ceased to be outstanding.
"SEC" shall have the meaning given it in Section 4(d).
"Second Additional Closing Date" shall have the meaning set forth in
Section 2(b)(iii).
"Second Additional Shares" shall have the meaning set forth in Section
2(b)(ii).
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Shares" means all of the Initial Shares, the First Additional Shares
and the Second Additional Shares outstanding at any time.
References to Sections and Schedules are references to the Sections and
Schedules of this Agreement unless otherwise stated.
2. Purchase and Sale.
(a) Purchase and Sale of the Initial Shares.
(i) Against delivery of the purchase price therefor,
NaPro hereby sells and issues to Abbott, and Abbott hereby subscribes for and
purchases, 400,000 shares of Common Stock (the "Initial Shares"). The purchase
price for the Initial Shares shall be $5.00 per share of Common Stock or
$2,000,000 in the aggregate.
(ii) Abbott hereby delivers to NaPro the payment
described in Section 2(a)(i) by wire transfer of immediately available funds,
and (ii) NaPro hereby delivers to Abbott the duly executed and authenticated
stock certificates, representing all of the Initial Shares to be purchased by
Abbott pursuant to Section 2(a)(i). The certificates representing the Initial
Shares shall bear the legend set forth in Section 13(n).
(b) Purchase and Sale of the Additional Shares.
(i) [THIS PORTION HAS BEEN REDACTED] NaPro shall
sell to Abbott, and Abbott shall purchase from NaPro, 400,000 shares of Common
Stock (the "First
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Additional Shares") at a purchase price of $5.00 per share of Common
Stock or $2,000,000 in the aggregate.
(ii) [THIS PORTION HAS BEEN REDACTED] NaPro
shall sell to
Abbott, and Abbott shall purchase from NaPro, 1,200,000 Shares (the
"Second Additional Shares") at a purchase price of $5.00 per share of
Common Stock or $6,000,000 in the aggregate.
(iii) Abbott and NaPro shall agree on a mutually
acceptable Business Day within the times specified in Section 2(b)(i)
and 2(b)(ii) on which thc sale and purchase of the First Additional
Shares (the "First Additional Closing Date") and the sale and purchase
of the Second Additional Shares (the "Second Additional Closing Date")
shall take place. At least forty eight (48) hours prior to each
Additional Closing Date, NaPro shall deliver to Abbott written wire
transfer instructions for the payment of the purchase price for the
Additional Shares to be sold and purchased pursuant to the terms of
this Section 2(b), which instructions shall include NaPro's bank name
and address, ABA routing number and NaPro's account number.
(c) Conditions to Obligations of Abbott to Purchase Additional
Shares. The obligations of Abbott to purchase each of the Additional Shares are
subject to the satisfaction on or prior to each Additional Closing Date of all
of the following conditions, unless waived by Abbott:
(i) Representations and Warranties. The
representations and warranties of NaPro set forth in this Agreement shall be
true and correct as of the date of this Agreement and as if made at and as of
each Additional Closing Date, except for such changes as are disclosed in
NaPro's filings with the SEC after the date of this Agreement, and Abbott shall
have received a certificate or certificates signed by a responsible officer of
NaPro to such effect.
(ii) Performance of Obligations. NaPro shall have
performed all obligations required to be performed by it under this Agreement
prior to each Additional Closing Date, and Abbott shall have received a
certificate signed by a responsible officer of NaPro to such effect.
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(iii) Other Documents. NaPro shall have delivered to
Abbott (i) a copy of the Certificate of Incorporation of NaPro, as in effect on
the each Additional Closing Date, certified by the Secretary of State of the
State of Delaware, if amended since the date of this Agreement, (ii) a
certificate of the Secretary of State of the State of Delaware, as of the most
recent practicable date, as to the good standing of NaPro, and (iii) a
certificate of the Secretary of NaPro dated as of the applicable Additional
Closing Date, certifying as to the Board Resolutions authorizing the execution
and delivery of this Agreement and the other transactions contemplated hereby,
and that such resolutions have not been amended or repealed and are in full
force and effect as of such Additional Closing Date.
(iv) Development Agreement. The Development
Agreement shall be in full force and effect, and no notice of termination shall
have been given thereunder.
(v) Regulatory Approvals, etc. Any required
regulatory approvals and/or associated waiting periods applicable to the sale
and purchase of the Additional Shares shall have been obtained and/or expired.
(vi) Certificates for the Additional Shares. NaPro
shall have delivered to Abbott valid certificates for the First Additional
Shares or the Second Additional Shares, as the case may be, registered in
Xxxxxx'x name.
(vii) Change in Control. There shall not have
occurred or be pending any Change in Control other than a Change in Control to
which Abbott has consented in writing. A Change in Control shall be considered
"pending" for purposes of this Section 2(c)(vii) upon the execution of a
definitive agreement to consummate a Change in Control transaction conditioned
only on stockholder approval.
(d) Conditions to Obligations of NaPro for the Additional
Shares. The obligations of NaPro to consummate the transactions contemplated
hereby in connection with each of the Additional Shares are subject to the
satisfaction on or prior to each Additional Closing Date of all of the following
conditions, unless waived by NaPro:
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(i) Representations and Warranties. The
representations and warranties of Abbott set forth in this Agreement shall be
true and correct in all material respects as of the date of this Agreement and
as if made at and as of each Additional Closing Date and NaPro shall have
received a certificate or certificates signed by a responsible officer of Abbott
to such effect.
(ii) Performance of Obligations of Abbott. Abbott
shall have performed in all material respects all obligations required to be
performed by it under this Agreement prior to each Additional Closing Date and
NaPro shall have received a certificate or certificates signed by a responsible
officer of Abbott to such effect.
(iii) Regulatory Approvals, etc. Any required
regulatory approvals and/or associated waiting periods applicable to the sale
and purchase of the Additional Shares shall have been obtained and/or expired.
(iv) Payment. Abbott shall have delivered to NaPro
the applicable purchase price for the First Additional Shares or the Second
Additional Shares, as the case may be.
(e) Certain Adjustments. If NaPro at any time effects a
subdivision or combination of the outstanding Common Stock, the purchase price
for the Additional Shares shall be decreased, in the case of a subdivision, or
increased, in the case of a combination, in the same proportions as the Common
Stock is subdivided or combined, in each case effective automatically upon, and
simultaneously with, the effectiveness of the subdivision or combination which
gives rise to the adjustment. If NaPro at any time pays a dividend, or makes any
other distribution, to holders of Common Stock payable in shares of Common
Stock, or fixes a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in shares of Common
Stock, the purchase price for the Additional Shares shall be adjusted by
multiplying it by a fraction:
(i) the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to such
dividend or distribution; and
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(ii) the denominator of which shall be the total
number of shares of Common Stock outstanding immediately after such dividend or
distribution (plus, if NaPro paid cash instead of fractional shares otherwise
issuable in such dividend or distribution, the number of additional shares which
would have been outstanding had NaPro issued fractional shares instead of cash);
in each case effective automatically as of the date NaPro shall take a record of
the holders of its Common Stock for the purpose of receiving such dividend or
distribution (or if no such record is taken, as of the effectiveness of such
dividend or distribution). Whenever the purchase price for the Additional Shares
shall be adjusted, NaPro shall make a certificate signed by a corporate officer
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated,
and the purchase price for the Additional Shares after giving effect to such
adjustment, and shall cause a copy of such certificate to be mailed (by first
class mail postage prepaid) to Abbott promptly after each adjustment.
3. Representations and Warranties of NaPro. NaPro represents and
warrants to Abbott that, as of the date of this Agreement:
(a) Authority of NaPro. NaPro is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware,
and each of NaPro's subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its state or county of
incorporation. NaPro and each of its subsidiaries has all requisite power and
authority to own and operate its properties and to carry on its business as now
conducted and as presently proposed to be conducted, and is duly licensed or
qualified and is in good standing as a foreign corporation in each jurisdiction
wherein the nature of the business transacted by it or the nature of the
property owned or leased by it makes such licensing or qualification necessary
or advisable, except where the failure to be so licensed or qualified would not
have a material adverse effect on NaPro and its subsidiaries taken as a whole.
NaPro has the corporate power and authority to execute and deliver this
Agreement, and to perform its obligations under this Agreement, including the
issuance, sale and delivery of the Shares. All
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corporate action required to be taken by NaPro to authorize the execution,
delivery and performance of this Agreement, including (i) the issuance, sale and
delivery of the Shares and (ii) the approval of any transaction or series of
transactions authorized or permitted under Section 2 of this Agreement in which
Abbott may become an "interested stockholder" (as defined in Section 203 of the
Delaware General Corporation Law) which transaction or series of transactions do
not violate the terms of this Agreement, has been duly taken.
(b) Validity. This Agreement has been duly executed and
delivered by NaPro and constitutes the valid and legally binding obligation of
NaPro, enforceable against NaPro in accordance with its terms and conditions.
The execution and delivery of this Agreement and consummation of the
transactions contemplated by this Agreement by NaPro is not prohibited by, does
not violate, conflict with, or require consent under any provision of, and does
not result in a default under, and does not and will not permit the acceleration
of any obligation under (in each case, with or without the giving of notice or
the passage of time, or both): (i) the charter or bylaws of NaPro; (ii) any
material contract, agreement, mortgage, indenture, lease, license or other
instrument, permit or franchise to which NaPro or its subsidiaries is a party or
by which NaPro is bound or applicable to NaPro or its properties; (iii) any
order, writ, injunction, decree or judgment of any court or governmental agency
applicable to NaPro or its subsidiaries or their properties; or (iv) any law,
rule or regulation applicable to NaPro or its subsidiaries, except in the case
of clauses (ii), (iii) and (iv) for such violations, conflicts, consents,
defaults or accelerations that would not affect the enforceability of this
Agreement in accordance with its terms or otherwise have a material adverse
effect on the purchase or sale of the Shares. Assuming the truth of the
representations and warranties set forth in Section 4 of this Agreement, no
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with any court, administrative agency or
commission or other governmental authority or other Person is or will be
required by, or with respect to, NaPro in connection with the execution and
delivery of this Agreement, the issuance, offer and sale of the Shares or the
consummation by NaPro of the transactions
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contemplated by this Agreement, except for the filing of notices as may be
required under applicable federal and state securities laws and the laws of any
foreign country which notices have been or will be timely filed by NaPro.
(c) Capitalization.
(i) As of the close of business on July 22, 1999, the
authorized capital stock of NaPro consists of (A) 30,000,000 shares of
voting Common Stock, par value $.0075 per share, of which 21,458,681
shares are issued and outstanding and 539,867 shares are held in
treasury, (B) 1,000,000 shares of non-voting Common Stock, par value
$.0075 per share (each share of which is convertible on disposition
into voting Common Stock), of which 395,000 shares are issued and
outstanding, and (C) 2,000,000 shares of preferred stock, par value
$.001 per share, of which 2,807 shares are issued and outstanding.
(ii) All of the issued and outstanding shares of
capital stock of NaPro have been duly authorized and validly issued,
are fully paid and nonassessable, and were issued either pursuant to an
effective registration statement under applicable state and federal
securities laws or an applicable exemption from such registration
requirements.
(iii) The sale of the Shares is not subject to any
preemptive rights or rights of first refusal that have not been waived
and, when issued, sold and delivered as contemplated by this Agreement,
the Shares will be validly issued, fully paid and non-assessable
provided, however, that the Shares may be subject to restrictions on
transfer under state and/or federal securities laws as set forth in
this Agreement or as otherwise required by such laws at the time a
transfer is proposed.
(iv) Except as set forth on Schedule 3(c): (A) there
are no outstanding or authorized convertible or exchangeable securities
of NaPro, options, warrants, rights, contracts, calls, puts, rights to
subscribe, conversion rights, or agreements or commitments pursuant to
which any Person has any rights to acquire from NaPro, and NaPro does
not have any obligations, contingent or otherwise, to repurchase,
redeem or otherwise acquire, any shares of
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capital stock or voting securities of NaPro; (B) there are no
outstanding or authorized stock appreciation, phantom stock or similar
rights of NaPro; (C) there are no existing rights to require NaPro to
register any of its securities under the Securities Act; and (D) there
are no voting trusts, proxies or any other agreements or understandings
to which NaPro is a party or of which it has Knowledge with respect to
the voting of the capital stock or voting securities of NaPro.
(v) Except as set forth on Schedule 3(c), all of the
issued and outstanding shares of capital stock of each subsidiary of
NaPro have been duly authorized and validly issued, are fully paid and
non-assessable, and are owned by NaPro free and clear of any lien or
encumbrance. None of the capital stock of any such subsidiary was
issued in violation of the preemptive or similar rights of any other
Person. Except as set forth in Schedule 3(c), there are no outstanding
options, warrants or similar rights to acquire capital stock of any
subsidiary of NaPro.
(d) SEC Filings.
(i) NaPro has timely filed all forms, reports and
documents required to be filed by it with the Securities and Exchange
Commission ("SEC") since January 1, 1995, and NaPro has heretofore made
available to Abbott, in the form filed with the SEC (including any
exhibits thereto): (A) the Annual Reports on Form 10-K of NaPro for the
fiscal years ended December 31, 1995, December 31, 1996, and December
31, 1997, and December 31, 1998 (the "1998 Annual Report"); (B) all
proxy and information statements relating to meetings of stockholders
of NaPro (whether annual or special) held since January 1, 1995; and
(C) all other reports and registration statements (including all
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed
by NaPro with the SEC since January 1, 1995 (including all amendments
to each of the foregoing, the forms, reports and other documents
referred to in clauses (A) through (C) being referred to in this
Agreement, collectively, as the "NaPro Disclosure Documents"). The
NaPro Disclosure Documents: (x) were prepared in accordance
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with the Securities Act or the Securities Exchange Act, as the case may
be, and the rules and regulations thereunder; and (y) did not at the
time they were filed with the SEC contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not
misleading.
(ii) Each of the consolidated financial statements
(including any notes thereto) contained in the Annual Reports on Form
10-K of NaPro for the fiscal years ended December 31, 1995, December
31, 1996, December 31, 1997, and December 31, 1998, was prepared in
accordance with U.S. generally accepted accounting principles and all
applicable rules of the SEC and fairly presents in all material
respects the consolidated financial position, results of operations and
cash flows of each of NaPro and its consolidated subsidiaries as at the
respective dates thereof and for the respective periods indicated
therein, subject, in the case of unaudited statements, to normal
year-end adjustments. As of March 31, 1999, except as (A) set forth in
the 1998 Annual Report or the Quarterly Report on Form 10-Q of NaPro
for the quarter ended March 31,1999 (the "March 1999 Quarterly
Report"); or (B) disclosed in Schedule 3(e), neither NaPro nor any of
its consolidated subsidiaries had any material liabilities or
obligations, secured or unsecured (whether accrued, absolute,
contingent or otherwise). For purposes of the preceding sentence, a
"material liability or obligation" is one that exceeds 5% of NaPro's
consolidated assets as of December 31, 1998.
(e) Absence of Certain Changes. Since March 31, 1999, and
except as: (i) set forth in the 1998 Annual Report or the March 1999 Quarterly
Report; (ii) disclosed in Schedule 3(e); or (iii) as otherwise contemplated by
the Loan Agreement, there has not been to NaPro's Knowledge, any event,
occurrence or development of a state of circumstances or facts which has had or
reasonably would be expected to have a material adverse effect on the business,
assets, operations, prospects or condition (financial or otherwise) of NaPro and
its subsidiaries, taken as a whole.
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(f) ERISA. Except as disclosed in the NaPro Disclosure
Documents or in Schedule 3(f), NaPro does not have any: (i) employee benefit
plans, multi-employer plans and employee benefit plans subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") (as defined in
section 3(2) or section 3(3) of ERISA); (ii) bonus, deferred compensation,
incentive, restricted stock, stock purchase, stock option, stock appreciation
right, phantom stock, debenture, supplemental pension, profit-sharing, royalty
pool, commission or similar plans or arrangements; or (iii) employment,
consulting, termination or severance agreements.
(g) Proprietary Rights. Except as disclosed in the NaPro
Disclosure Documents or in Schedule 3(g), to NaPro's Knowledge it owns, or
possesses adequate rights to use, all material patents, patent rights,
inventions, trade secrets, know-how, proprietary techniques, including processes
and substances, trademarks or service marks, trade names and copyrights either
described or referred to in the NaPro Disclosure Documents as being owned or
used by NaPro or which are necessary for the conduct of its business as
presently conducted, and NaPro has not been notified in writing of any claim by
any Person to the contrary or any challenge by any Person to the rights of NaPro
or any of its subsidiaries with respect to the foregoing.
(h) Litigation. Except as described in the NaPro Disclosure
Documents or in Schedule 3(h): (i) there is no material claim, dispute, action,
proceeding, notice, order, suit, appeal or investigation, at law or in equity,
pending against NaPro or any of subsidiaries, or involving their respective
assets or properties, before any court, agency, authority, arbitration panel or
other tribunal (other than those, if any, with respect to which service of
process or similar notice has not yet been made on NaPro); (ii) NaPro has no
Knowledge of facts which, if known to its stockholders, customers, governmental
authorities or competitors, NaPro believes would result in any such claim,
dispute, action, proceeding, notice, order, suit, appeal or investigation that
would have a material adverse effect on the assets, financial condition, cash
flow or results of operations of NaPro and subsidiaries taken as a whole; and
(iii) NaPro is not subject to any material order, writ, injunction or decree or
any court, agency,
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authority, arbitration panel or other tribunal, not is it in default with
respect to any such order writ, injunction or decree.
(i) Investment Company. NaPro is not, and upon completion of
the transactions contemplated by this Agreement and the Loan Agreement will not
be, an "investment company" or a company controlled by an investment company
within the meaning or the Investment Company Act of 1940.
4. Representations and Warranties of Xxxxxx. Xxxxxx represents and
warrants to NaPro that, as of the date of this Agreement:
(a) Authority of Xxxxxx. Xxxxxx is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Illinois. Xxxxxx has the corporate power and authority to execute and deliver
this Agreement, and to perform its obligations under this Agreement. All
corporate action required to be taken by Xxxxxx to authorize the execution,
delivery and performance of this Agreement has been duly taken.
(b) Validity. This Agreement constitutes the valid and legally
binding obligation of Xxxxxx, enforceable against Xxxxxx in accordance its terms
and conditions. The execution and delivery of this Agreement and consummation of
the transactions contemplated by this Agreement by Xxxxxx is not prohibited by,
does not violate, conflict with, or require consent under any provision of, and
does not result in a default under (i) the charter or bylaws of Xxxxxx; (ii) any
material contract, agreement or other instrument to which Xxxxxx is a party or
by which Xxxxxx is bound; (iii) any order, writ, injunction, decree or judgment
of any court or governmental agency applicable to Xxxxxx; or (iv) any law, rule
or regulation applicable to Xxxxxx.
(c) Resale. Xxxxxx is acquiring the Shares under this
Agreement for its own account solely for the purpose of investment and not with
a view to, or for offer or sale in connection with, any distribution thereof in
violation of the Securities Act. Xxxxxx has such knowledge and experience in
financial and business matters as to be capable of evaluating the risks and
merits of an investment in the Shares and is able to bear the economic risk of
such investment. Xxxxxx acknowledges and agrees that
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none of the Shares has been registered under the Securities Act and that such
Shares may be sold or disposed of in the absence of such registration only
pursuant to an exemption from such registration and in accordance with the terms
of this Agreement and the Securities Act and that NaPro's transfer agent is
authorized to place stop transfer instructions on the NaPro's stock transfer
records and may refuse to transfer any Shares not transferred in compliance with
this Agreement or the Securities Act or in compliance with the restrictions on
transfer set forth in Section 13(m) and 13(n).
(d) Receipt of Information. Xxxxxx has experience in
evaluating and investing in companies in the same industry as NaPro and is able
to assess the relative merits and risks of an investment in NaPro and to sustain
a total loss on such investment. Xxxxxx further represents that it has had an
opportunity to ask questions and receive answers from NaPro regarding the terms
and conditions of the offering of the Shares and the business, properties,
prospects and financial condition of NaPro and its subsidiaries and to obtain
additional information it considers necessary or appropriate for deciding
whether to purchase the Shares. The foregoing, however, does not limit or modify
the representations and warranties of NaPro in Section 3 of this Agreement or
the right of Xxxxxx to rely thereon.
5. Registration Rights.
(a) Demand Registration Rights. Upon the earlier of: (i) the
date of the filing by NaPro of an NDA for a Finished Product with the FDA; and
(ii) two (2) years after the date of this Agreement, upon the written request of
Xxxxxx, NaPro, to the extent permitted by law and subject to the terms of this
Agreement, shall register any Registrable Shares held by Xxxxxx that Xxxxxx
requests to be registered pursuant to an effective registration statement under
the Securities Act (a "Registration"); provided, however, that any such request
shall be for at least 50% of the Registrable Shares held by Xxxxxx (a
Registration pursuant to this Section 5(a) is referred to in this Agreement as a
"Demand Registration"). Xxxxxx'x request for a Demand Registration shall specify
the number of Registrable Shares requested to be registered and whether such
Shares are Initial Shares, First Additional Shares or Second Additional Shares
or a combination thereof. Within ten (10) Business Days after receipt of any
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such request, NaPro will give written notice of such requested Registration to
holders of Registrable Securities and will include in such Registration all
Registrable Securities with respect to which NaPro has received written requests
for inclusion therein within ten (10) Business Days after the receipt of NaPro's
notice; provided, however, that if the Demand Registration relates to an
underwritten offering and the managing underwriter shall advise NaPro or Xxxxxx
that, in its judgment, the number of shares proposed to be included in such
offering should be limited, then NaPro shall promptly so advise each holder of
Registrable Securities, and such Registrable Securities shall be excluded from
the Demand Registration and offering prior to excluding any Registrable Shares
held by Xxxxxx. If the offering to be covered by the Demand Registration is an
underwritten offering, Xxxxxx shall have the right to select one legal counsel
and an investment banker or bankers and manager or managers to administer the
offering, which counsel, investment banker or bankers or manager or managers
shall be reasonably satisfactory to NaPro.
(b) Conditions to Demand Registration. NaPro may delay any
Demand Registration requested pursuant to Section 5(a): (i) for a single period
of time not exceeding ninety (90) days (which cannot be extended), if NaPro's
Board of Directors shall determine in good faith that any such Registration
would adversely affect a material financing, acquisition, disposition of assets
or stock, merger or other comparable transaction or would require NaPro to make
public disclosure of information the public disclosure of which would have a
material adverse effect on NaPro, and a certificate to that effect shall be
signed on behalf of NaPro's Board of Directors and delivered to Xxxxxx; or (ii)
if NaPro determines to initiate a registered primary public offering of its
securities in a registered public offering (a "Primary Offering"), in which case
NaPro shall so notify Xxxxxx within ten (10) Business Days of receiving Xxxxxx'x
request for a Demand Registration and the delay of the Demand Registration may
not exceed ninety (90) days from the date notice of NaPro's determination to
initiate the Primary Offering is given to Xxxxxx; provided, however, that in the
event the Primary Offering is declared effective by the SEC within such ninety
(90)-day period, the permitted delay may be extended, but in no event shall the
delay exceed one hundred twenty (120) days from the date the Primary Offering is
declared effective.
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NaPro may exercise its right to delay a Demand Registration pursuant to clause
(ii) of this Section 5(b) only once. If a Demand Registration is delayed
pursuant to clause (ii) of this Section 5(b), then pursuant to Section 5(c)
Xxxxxx may request inclusion in the Primary Offering of all the Registrable
Shares that were included in its request for the Demand Registration. If: (i)
Xxxxxx requests that such Registrable Shares be so included in the Primary
Offering; and (ii) the number of Registrable Shares sold by Xxxxxx in connection
with the Primary Offering is 75% or more of the number of Registrable Shares
sought by Xxxxxx to be included, then Xxxxxx shall be deemed to have used a
Demand Registration. For the avoidance of doubt, however, if the number of
Registrable Shares sold by Xxxxxx in connection with the Primary Offering is
less than 75% of the number of Registrable Shares sought by Xxxxxx to be
included, then Xxxxxx shall not be deemed to have used a Demand Registration.
(c) Piggyback Registration. If at any time, and from time to
time, NaPro proposes to register any of its Common Stock or other securities
under the Securities Act (other than pursuant to Section 5(a)), NaPro shall
promptly give notice to Xxxxxx of its intention to do so. Upon the written
request of Xxxxxx, given within fifteen (15) Business Days after receipt of any
such notice from NaPro, NaPro shall in each instance use its best efforts to
cause the number of Shares requested by Xxxxxx to be registered under the
Securities Act and registered or qualified under any state securities law
provided, however, that the obligation to give such notice and to use such best
efforts shall not apply to any registration (a) on: Form S-8 (or any successor
form); (b) in connection with dividend reinvestment plans or rights offering, or
(c) for the purpose of offering registered securities to another business entity
or the shareholders of such entity in connection with the acquisition of assets
or capital stock of such entity or in connection with a merger, consolidation,
combination or similar transaction with such entity (the Registration pursuant
to this Section 5(c) is referred to in this Agreement as a "Piggyback
Registration"). In the event the managing underwriter of an underwritten
offering or, in the case of any offering that is not underwritten, a recognized
investment banking firm shall advise NaPro in writing (and NaPro shall in each
case so advise Xxxxxx and each holder of Registrable Securities requesting
registration of such
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advice in writing) that, market factors (including, without limitation, the
aggregate number of shares requested to be registered, the general condition of
the market, and the status of the persons proposing to sell securities pursuant
to the registration) require a limitation of the number of shares to be
underwritten, then NaPro will include in such registration, to the extent of the
number and type of securities which NaPro is so advised can be sold in (or
during the time of) such offering first, all securities of NaPro proposed by
NaPro to be sold for its own account, or, in the case of a secondary offering
made pursuant to demand registration rights granted to any Person other than
Xxxxxx, all securities of NaPro that such Person proposes to sell; second, all
Registrable Securities that are entitled to piggyback registration rights under
agreements with NaPro in existence on the date of this Agreement, which
agreements provide, as of the date hereof, that such piggyback registration
rights shall have priority over the piggyback registration rights granted to
Xxxxxx under this Agreement third, such Registrable Shares requested to be
included in such registration pursuant to this Agreement and Registrable
Securities that are entitled to piggyback registration rights under agreements
with NaPro in existence on the date of this Agreement, which agreements provide,
as of the date of this Agreement, that such piggyback registration rights shall
rank equally with the registration rights granted to Xxxxxx under this
Agreement, allocated pro rata based on the number of shares of Common Stock
owned by such holders; and fourth, all other securities of NaPro that are not
covered by one of the foregoing clauses.
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(d) Expenses. NaPro shall pay all expenses in connection with
the first Demand Registration and each Piggyback Registration and Primary
Offering (which, for purposes of this Section 5(d) and Section 5(e) shall
include any qualifications, notifications and exemptions) other than
underwriting discounts and commissions attributable to the Registrable Shares
and the fees and expenses of Xxxxxx'x counsel, and Xxxxxx shall pay all expenses
in connection with all other Demand Registrations (which, for purposes of this
Section 5(d) and Section 5(e) shall include any qualifications, notifications
and exemptions). Notwithstanding the preceding sentence, if: (i) Xxxxxx had
requested a Demand Registration; (ii) that Demand Registration was delayed
pursuant to Section 5(b)(ii); (iii) Xxxxxx exercised its rights under Section
5(c) to have the Registrable Shares covered by the delayed Demand Registration
in the Primary Offering; (iv) as a result of the number of Registrable Shares
sold in connection with the Primary Offering Xxxxxx was deemed not to have used
a Demand Registration; and (v) the number of Registrable Shares sold by Xxxxxx
in connection with the Primary Offering was more than 50% of the Registrable
Shares sought by Xxxxxx to have included, then NaPro shall no longer be
obligated to pay expenses in connection with a subsequent Demand Registration.
(e) Indemnification. In connection with any Registration under
Sections 5(a) or 5(c), NaPro shall indemnify Xxxxxx, its directors, officers,
employees and agents, and each Person, if any, who controls Xxxxxx within the
meaning of the Securities Act or the Securities Exchange Act, against all
losses, claims, damages, liabilities and expenses (including reasonable fees and
disbursements of counsel, and costs of investigation) arising out of: (i) any
untrue, or alleged untrue, statement of a material fact contained in any
registration statement or prospectus or notification or offering circular (and
as amended or supplemented if NaPro shall have furnished any amendments or
supplements) or any preliminary prospectus; (ii) any omission, or alleged
omission, to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading; or (iii) any violation or alleged violation
by NaPro of the Securities Act, the Securities Exchange Act, any state blue sky
or securities laws or any rule or regulation thereunder;
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except insofar as such losses, claims, damages, liabilities or expenses arise
out of any untrue statement or alleged untrue statement or omissions based upon
information furnished in writing to NaPro by Xxxxxx or, in the case of an
underwritten offering by the underwriter for Xxxxxx, expressly for use in such
registration statement or prospectus, and NaPro and each officer, director and
controlling person of NaPro shall be indemnified by Xxxxxx for all such losses,
claims, damages, liabilities and expenses arising out of any untrue, or alleged
untrue, statement or omission, or alleged omission, to the extent (and only to
the extent) such untrue or alleged untrue statement or omission, or alleged
omission, is included by NaPro in such registration statement or prospectus in
reliance upon and in conformity with information furnished in writing to NaPro
by Xxxxxx expressly for any such use provided that Xxxxxx'x indemnification
obligations shall be several and not joint and several with any other Person.
Promptly upon receipt by an indemnified party of notice of the
commencement of any action against such indemnified party in respect of which
indemnity or reimbursement may be sought against any indemnifying party under
this Section 5(e), the indemnified party shall notify the indemnifying party in
writing of the commencement of such action, but the failure so to notify the
indemnifying party shall not relieve it of any liability which it may have to
any indemnified party otherwise than under this Section 5(e). In case notice of
commencement of any such action shall be given to the indemnifying party as
above provided, the indemnifying party shall be entitled to participate in and,
to the extent it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense of such action at its own expense, with counsel
chosen by it and satisfactory to such indemnified party. The indemnified party
shall have the right to employ separate counsel in any such action and
participate in the defense of such action, but the fees and expenses of such
counsel (other than reasonable costs of investigation) shall be paid by the
indemnified party unless the indemnifying party either agrees to pay the same or
fails to assume the defense of such action with counsel satisfactory to the
indemnified party or unless, in the reasonable judgement of such indemnified
party, a conflict of interest may exist between such indemnified party and
indemnifying party. No indemnifying party who has assumed the defense of an
action pursuant to this Section 5(e) shall be liable for any settlement entered
into without
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its consent, which consent shall not be unreasonably withheld. If the
indemnification provided for in this Section 5(e) is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, liability, claim, damage or expense referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other hand in connection with the
statements or omissions which resulted in such loss, liability, claim, damage or
expense as well as any other relevant equitable considerations. The relevant
fault of the indemnifying party and the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The provisions hereof shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any director, officer, employee, agent or
controlling person thereof, and shall survive the transfer of securities and the
termination of this Agreement.
(f) Provisions Applicable to all Registrations.
(i) NaPro shall prepare and file a registration
statement under the Securities Act and use its best efforts to cause
such registration statement to become effective as soon as practicable
following receipt of Xxxxxx'x request for a Demand Registration.
Notwithstanding the foregoing, if NaPro shall fail to cause such
registration statement to become effective within one hundred twenty
(120) calendar days following the initial filing of the registration
statement with the SEC, NaPro's failure shall not be deemed a breach of
this Section 5(f), provided that NaPro used its best efforts during
such one hundred twenty-day (120) period.
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(ii) NaPro shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
registration statement and the prospectus used in connection with the
registration statement as may be necessary to keep the registration
statement effective at all times until the earlier of nine (9) months
after the initial effective date of the registration statement or until
Xxxxxx shall have given written notice that it has completed the
distribution of the Registrable Shares thereunder (the "Registration
Period"), and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by the registration statement until such time as all
of such securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as set
forth in the registration statement. Notwithstanding the foregoing, if
for any reason NaPro advises Xxxxxx that Xxxxxx'x use of the Demand
Registration to sell Shares should be suspended and Xxxxxx complies
with such advice, then the Registration Period shall be extended by the
aggregate number of days of such suspension.
(iii) NaPro shall furnish to Xxxxxx (and Xxxxxx'x
legal counsel designated pursuant to Section 5(f)(vii)): (A) promptly
after the registration statement is prepared and publicly distributed
and filed with the SEC, one copy of the registration statement and any
amendment thereto, each preliminary prospectus and prospectus and each
amendment and supplement thereto; and (B) such number of copies of a
prospectus (including a preliminary prospectus) and all amendments and
supplements thereto and such other documents as Xxxxxx may reasonably
request in order to facilitate the disposition of the Registrable
Shares covered by the registration statement and owned by such Xxxxxx.
NaPro shall immediately notify Xxxxxx by facsimile of the effectiveness
of the registration statement or any post-effective amendment.
(iv) NaPro shall use its best efforts to: (A)
register and qualify the Registrable Shares covered by the registration
statement under such other securities or "blue sky" laws of such
jurisdictions in the United States as Xxxxxx reasonably requests; (B)
prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements
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to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period; (C)
take such other actions as may be reasonably necessary to maintain such
registrations and qualifications in effect at all times during the
Registration Period; and (D) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale
in such jurisdictions provided, however, that NaPro shall not be
required in connection therewith or as a condition thereto to: (x)
qualify to do business in any jurisdiction where it would not otherwise
be required to qualify but for this Section 5(f)(iv); (y) subject
itself to general taxation in any such jurisdiction; or (z) file a
general consent to service of process in any such jurisdiction or
otherwise take any action that would subject it to the general
jurisdiction of the courts of any jurisdiction in which it would not
otherwise be so subject.
(v) As promptly as practicable after becoming aware
of such event, NaPro shall notify Xxxxxx of the happening of any event
of which NaPro has Knowledge as a result of which the prospectus
included in the registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and, at NaPro's expense, NaPro shall promptly prepare a
supplement to the prospectus or amendment to the registration statement
to correct such untrue statement or omission and use its best efforts
to cause any such amendment to become effective under the Securities
Act, and deliver such number of copies of such supplement or amendment
to Xxxxxx as such Xxxxxx may reasonably request.
(vi) NaPro shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of the
registration statement and any similar order of suspension by any state
securities commission or similar Person, and, if such an order is
issued or suspension imposed, to obtain the withdrawal of such order or
suspension at the earliest
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possible moment and to notify Xxxxxx (or, in the event of an
underwritten offering, the managing underwriters) of the issuance of
such order or suspension and the resolution thereof.
(vii) NaPro shall permit a single firm of legal
counsel designated by Xxxxxx to review the registration statement and
all amendments and supplements thereto (as well as all requests for
acceleration of effectiveness thereof) a reasonable period of time
prior to their filing with the SEC, and shall not file any document in
a form to which such counsel reasonably objects and will not request
acceleration of the registration statement without prior notice to such
counsel. The sections of the registration statement covering
information with respect to Xxxxxx, Xxxxxx'x beneficial ownership of
securities of NaPro or Xxxxxx'x intended method of disposition of
Registrable Securities shall conform to the information provided to
NaPro by Xxxxxx.
(viii) NaPro shall otherwise use its best efforts to
comply with all applicable rules and regulations of the SEC, and make
generally available to its security holders as soon as reasonably
practical, an earnings statement (in form complying with the provisions
of Section 11(a) of the Securities Act and Rule 158 under the
Securities Act) covering a period of at least twelve (12) months
beginning with the first day of NaPro's first full calendar quarter
following the date the registration statement is declared effective by
the SEC (the "Effective Date").
(ix) NaPro shall make available for inspection, at
the offices where normally kept and during reasonable business hours,
by: (A) Xxxxxx; (B) any underwriter participating in any disposition
pursuant to the registration statement; (C) any firm of legal counsel
and any firm of accountants or other agents retained by Xxxxxx; and (D)
one firm of legal counsel retained by all such underwriters
(collectively, the "Inspectors"), all pertinent financial and other
records, corporate documents and properties of NaPro (collectively, the
"Records"), as shall be reasonably requested by such person as being
necessary in the reasonable opinion of such person to conduct a
reasonable investigation within the meaning of the Securities Act in
connection with such registration statement, and cause NaPro's
officers, directors and employees to supply all information which any
Inspector may reasonably request for purposes of such due diligence;
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provided, however, that each Inspector shall hold in confidence and
shall not make any disclosure (except to Xxxxxx (subject to the
limitations set forth in the last sentence of this subsection) or
agents of NaPro) of any Record designated by NaPro in writing as
confidential (the "Confidential Records"), unless: (x) the disclosure
of such Confidential Records is necessary in connection with the
Inspectors' or Xxxxxx' assertion of any claims or actions or with their
establishment of any defense in any pending administrative or judicial
action or proceeding; (y) the release of such Confidential Records is
ordered pursuant to a subpoena or other order from a court or
government body of competent jurisdiction; or (z) the information in
such Confidential Records has been made generally available to the
public other than by disclosure in violation of this or any other
agreement. Xxxxxx agrees that it shall, and shall cause each of its
Inspectors to, upon learning that disclosure of such Confidential
Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give notice of such request to
NaPro and allow NaPro, at NaPro's expense, to undertake appropriate
action to prevent disclosure of the Confidential Records.
Notwithstanding the foregoing, NaPro may designate any such Records as
being reviewable only by the Inspectors, and not disclosable to Xxxxxx
if NaPro reasonably believes that such Records are of a competitively
sensitive nature, and disclosure to Xxxxxx in accordance with this
provision would be materially harmful to NaPro's competitive position.
(x) NaPro shall hold in confidence and not make any
disclosure of information concerning Xxxxxx provided to NaPro pursuant
to this Section 5 unless: (A) disclosure of such information is
necessary in connection with NaPro's assertion of any claims or actions
or with its establishment of any defense in any pending administrative
or judicial action or proceeding; (B) disclosure of such information is
necessary to comply with federal or state securities laws; (C) the
disclosure of such information is necessary to avoid or correct a
misstatement or omission of material fact in the registration statement
that directly relates to
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Xxxxxx; (D) the release of such information is ordered pursuant to a
subpoena or other order from a court or governmental body of competent
jurisdiction; or (E) such information has been made generally available
to the public other than by disclosure in violation of this Agreement
or any other agreement. NaPro agrees that it shall, upon learning that
disclosure of such information concerning Xxxxxx is sought in or by a
court or governmental body of competent jurisdiction or through other
means, give notice of such request to Xxxxxx and allow Xxxxxx, at
Xxxxxx' expense, to undertake appropriate action to prevent disclosure
of the information deemed confidential.
(xi) NaPro shall: (A) cause all the Registrable
Shares covered by the registration statement to be listed on each
national securities exchange on which securities of the same class or
series issued by NaPro are then listed, if any; or (B) secure the
designation and quotation of all the Registrable Shares covered by the
registration statement on the Nasdaq National Market.
(xii) NaPro shall provide a transfer agent and
registrar, which may be a single entity, for the Registrable Shares not
later than the Effective Date.
(xiii) NaPro shall enter into such customary
agreements (including, in the case of an underwritten offering,
underwriting agreements in customary form as are reasonably
satisfactory to NaPro with customary representations, warranties and
covenants and indemnification and contribution obligations) and take
all such other appropriate actions as Xxxxxx or the underwriters, if
any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Shares. Xxxxxx shall be a party to such
underwriting agreement and may, at its option, require that NaPro make
to and for the benefit of Xxxxxx the representations, warranties and
covenants of NaPro and NaPro may, at its option, require that Xxxxxx
make to and for the benefit of NaPro, the representations, warranties
and covenants of Xxxxxx, in each case, which are being made to and for
the benefit of such underwriters.
(xiv) NaPro shall use its best efforts to obtain an
opinion from NaPro's counsel and a "cold comfort" letter from NaPro's
independent public accountants in customary
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form and covering such matters as are customarily covered by such
opinions and "cold comfort" letters delivered to underwriters in
underwritten public offerings, which opinion and letter shall be
reasonably satisfactory to the underwriter, if any, and to Xxxxxx, and
furnish to Xxxxxx and to each underwriter, if any, a copy of such
opinion and letter addressed to Xxxxxx and each underwriter.
(xv) NaPro shall cooperate with Xxxxxx and the
managing underwriter, if any, to facilitate the timely preparation and
delivery of certificates not bearing any restrictive legends
representing the Registrable Shares to be sold, and cause such
Registrable Shares to be issued in such denominations and registered in
such names in accordance with the underwriting agreement prior to any
sale of Registrable Shares to the underwriters or, if not an
underwritten offering, in accordance with the instructions of Xxxxxx at
least three business days prior to any sale of Registrable Shares and
instruct any transfer agent and registrar of Registrable Shares to
release any stop transfer orders in respect thereof.
(xvi) NaPro shall take all other reasonable actions
necessary to expedite and facilitate disposition by Xxxxxx of
Registrable Shares pursuant to the registration statement.
(xvii) If any such registration statement or
comparable statement under "blue sky" laws refers to Xxxxxx by name or
otherwise as the holder of any securities of NaPro, then Xxxxxx shall
have the right to require: (i) the insertion therein of language, in
form and substance satisfactory to Xxxxxx and NaPro, to the effect that
the holding by Xxxxxx of such securities is not to be construed as a
recommendation by Xxxxxx of the investment quality of NaPro's
securities covered thereby and that such holding does not imply that
Xxxxxx will assist in meeting any future financial requirements of
NaPro; or (ii) in the event that such reference to Xxxxxx by name or
otherwise is not in the judgment of NaPro, as advised by counsel,
required by the Securities Act or any similar federal statute or any
state "blue sky" or securities law then in force, the deletion of the
reference to Xxxxxx.
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6. Certain Limitations. NaPro shall be obligated to effect Demand
Registrations as follows:
(i) no more than two (2) Demand
Registrations with respect to the Initial Shares, any of which
two (2) Demand Registrations that has not been exercised shall
lapse as of the First Additional Closing Date; and
(ii) no more than two (2) Demand
Registrations with respect to the aggregate of the Initial
Shares and the First Additional Shares after the First
Additional Closing Date, any of which two (2) Demand
Registrations that has not been exercised shall lapse as of
the Second Closing Date; and
(iii) no more than two (2) Demand
Registrations with respect to the Shares as of the Second
Additional Closing Date. NaPro shall be obligated to effect no
more than three (3) Piggyback Registrations with
respect to all of the Shares. A Registration will not count as one of
the permitted Registrations under this paragraph 6 until it has become
effective. If a Registration has remained effective for the
Registration Period, such Registration shall be deemed to have been
effected regardless of whether any of the Shares are ultimately sold
pursuant to the Registration. A Registration that does not become
effective after NaPro has filed a registration statement with respect
thereto solely by reason of Xxxxxx'x refusal to proceed (other than any
refusal to proceed based upon: (i) the advice of its counsel that the
registration statement, or the prospectus contained therein, or other
documents incorporated by reference therein, contain or contains an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
or (ii) a material adverse change in the condition (financial or other)
of NaPro after such registration statement has been filed) shall be
deemed to have been effected by NaPro. The Demand Registration and
Piggyback Registration rights of Xxxxxx shall be assignable by Xxxxxx
only to wholly owned subsidiaries of Xxxxxx to which Xxxxxx has
transferred all of its Shares.
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7. Holdback. (a) If requested by the managing underwriter or
underwriters in an underwritten offering, or by the initial purchaser or
representative of the initial purchasers in an offering under Rule 144A under
the 1933 Act (a "Rule 144A Offering"), by NaPro of its equity securities (or
rights to acquire such equity securities or securities convertible into or
exchangeable for such equity securities), each holder of Registrable Shares
agrees not to effect any public sale or distribution of any Registrable Shares
of NaPro during the period commencing on the Effective Date of such underwritten
offering or, in the case of a Rule 144A Offering, the date of the definitive
offering memorandum for the Rule 144A Offering (or beginning up to ten (10)
Business Days prior to such date if requested by the managing underwriter or
underwriters in an underwritten offering or by the initial purchaser or
representative of the initial purchasers in a Rule 144A Offering) and continuing
until ninety (90) days following either: (i) the Effective Date of such
underwritten offering or, in the case of a Rule 144A Offering, the date of the
definitive offering memorandum for the Rule 144A Offering; or (ii) such earlier
date, if applicable, except for any Registrable Shares that are part of such
underwritten offering or Rule 144A Offering, as the case may be, or, unless
otherwise permitted by such managing underwriter or underwriters in the case of
an underwritten offering or by the initial purchaser or the representative of
the initial purchasers in a Rule 144A Offering.
(b) If requested by the managing underwriter or underwriters
in an underwritten offering of Registrable Shares, NaPro agrees: (i) not to
effect any public sale or distribution or its Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock during the
period commencing on the Effective Date of such underwritten offering (or
beginning up to ten (10) Business Days prior to such date if requested by the
managing underwriter or underwriters) and continuing until ninety (90) days
following either: (A) the Effective Date of such underwritten offering; or (B)
such earlier date, if applicable, except for: (x) securities that are part of
such underwritten offering; (y) securities to be registered on Form S-4 or Form
S-8 or any successor forms; and (z) as otherwise permitted by such managing
underwriter or underwriters; and (ii) to use commercially
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reasonable efforts to cause each future holder of its privately placed Common
Stock or securities convertible into or exchangeable or exercisable for Common
Stock issued by NaPro after the date of this Agreement to agree not to publicly
sell or distribute such securities during the period referred to in clause (i)
of this Section 7(b).
8. SEC Filings; Public Information. So long as necessary to permit
Xxxxxx to sell Shares in accordance with Rule 144 under the Securities Act,
NaPro shall use reasonable best efforts to file on a timely basis all reports
required to be filed pursuant to the Securities Exchange Act, and in the event
NaPro is not required to file such reports, NaPro shall make available public
information required pursuant to Rule 144(c) to facilitate any sale by Xxxxxx
pursuant to Rule 144.
9. [Reserved].
10. Listing of Shares.
(a) Not later than the first date that Xxxxxx is permitted to
publicly sell Shares under the terms of this Agreement, NaPro shall (i) prepare
and file with The Nasdaq Stock Market, Inc. (or, if applicable, any national
securities exchange on which the Common Stock is then listed) an application for
listing of the Shares; and (ii) to take all commercially reasonable steps
necessary to cause all such shares to be approved for listing on the Nasdaq
National Market (or, if applicable, any national securities exchange on which
the Common Stock is then listed) as soon as practicable thereafter.
(b) Except in the event of a deregistration or delisting that
may result from a transaction affecting NaPro outside of the ordinary course of
its business, NaPro shall use commercially reasonable efforts to keep effective
the registration of the Common Stock under the Securities Exchange Act and
maintain the listing of the Common Stock on the Nasdaq National Market (or, if
applicable, any national securities exchange on which the Common Stock may
become listed).
11. Press Releases. The Parties agree that, upon execution of this
Agreement, a press release approved by both parties will be issued. Except as
specifically set forth in this Section 11, neither Party (an "Originating
Party") shall: (a) originate any publicity, news release or other public
announcement, written or oral, whether to the public press, stockholders or
otherwise, relating to this Agreement, matters
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relevant to this Agreement, amendments hereto or performance by the Parties
hereunder; or (b) use the name of the other Party in any publicity, news release
or other public announcement, except (i) with the prior written consent, review
and approval of the other Party (a "Reviewing Party") in which case the
Originating Party shall forward the proposed public announcement to the
Receiving Party (which, in the case of Xxxxxx, shall be its Manager of Public
Affairs, Hospital Products Division, and in the case of NaPro, shall be its
General Counsel) not less than three (3) Business Days prior to its use or
publication; or (ii) as required by written state or federal securities law or
regulation in the written opinion of legal counsel to the Originating Party, in
which case the Originating Party will give to the Reviewing Party at least one
(1) full twenty-four (24) hour Business Day prior written notice of such
proposed legally required disclosure to review, comment and propose
modifications. In the event that the Reviewing Party fails to respond within the
three (3) Business Day or twenty-four (24) hour period, as the case may be, the
Originating Party shall be free to issue such release without comment from the
Reviewing Party.
12. Alternative Dispute Resolution.
(a) Contract Breach/Cure. Should either Party breach or be
alleged to have breached this Agreement, the other party may serve notice of
such breach, or alleged breach, in writing upon the breaching party. The Party
receiving such notice shall have ninety (90) days after receipt of the notice to
cure such breach or to demonstrate that no such breach or alleged breach exists.
In the event that any such breach or alleged breach remains unresolved after
such 90-day period, then the matter shall forthwith be referred to alternative
dispute resolution to be conducted in accordance with Exhibit G of the
Development Agreement.
(b) Disputes, etc. All disputes, other than a dispute arising
under paragraph (a) above, arising out of, relating to, or connected with this
Agreement, shall forthwith be referred to alternative dispute resolution to be
conducted in accordance with Exhibit G of the Development Agreement.
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(c) Exclusive Remedy. The alternative dispute resolution set
forth in Exhibit G of the Development Agreement shall be the exclusive means for
either Party to this Agreement to seek resolution of any dispute arising out of,
relating to, or connected with this Agreement, except that either Party may
bring an action before a competent court for the adoption of provisional or
protective measures or equitable relief. The pendency of matter referred to
alternative dispute resolution to be conducted in accordance with Exhibit G of
the Development Agreement shall not excuse any Party for performance under this
Agreement, it being understood that such performance is without prejudice to the
dispute resolution process.
(d) Judicial Review. Judgment on the arbitral award rendered
may be entered in any court having jurisdiction or application may be made to
such for a judicial acceptance of the award and an order of enforcement, as the
case may be.
13. Miscellaneous.
(a) Survival. The representations and warranties set forth in
this Agreement given in connection with the purchase and sale of the Initial
Shares shall survive the consummation of the purchase and sale of the Initial
Shares and terminate at the end of the twentieth (20th) month after the date of
this Agreement. The representations and warranties set forth in this Agreement
given in connection with the purchase and sale of the First Additional Shares
shall survive the consummation of the purchase and sale of the First Additional
Shares and terminate at the end of the twentieth (20th) month after the First
Additional Closing Date. The representations and warranties set forth in this
Agreement given in connection with the purchase and sale of the Second
Additional Shares shall survive the consummation of the purchase and sale of the
Second Additional Shares and terminate at the end of the twentieth (20th) month
after the Second Additional Closing Date. The covenants and agreements set forth
in this Agreement shall survive the consummation of this Agreement forever
unless terminated earlier in accordance with the terms of this Agreement.
(b) Parties and Interest. This Agreement shall bind and inure
to the benefit of the Parties named herein and their respective heirs,
successors and assigns.
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(c) Entire Transaction. This Agreement, the Development
Agreement and the Loan Agreement constitute the entire agreement between the
Parties with respect to the transactions contemplated by this Agreement and
supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, that may have related in any way to the
subject matter of this Agreements.
(d) Assignment. Neither Party may assign either this Agreement
or any of its rights, interests or obligations hereunder without the prior
written approval of the other Party, except as otherwise provided herein and
except that Xxxxxx may assign its rights, interests and obligations hereunder to
any of its wholly-owned subsidiaries.
(e) Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to NaPro:
NaPro BioTherapeutics, Inc.
0000 Xxxxx Xxxx, Xxxx X
Xxxxxxx, XX 00000
Attn: General Counsel
Telecopy: (000) 000-0000
With copy to:
Bartlit Xxxx Xxxxxx Xxxxxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx
Fax: (000) 000-0000
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If to Xxxxxx:
Xxxxxx Laboratories
Hospital Products Division
Xxxx. 000, Xxxx. XX00
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, XX 00000-0000
Attn: President
Telecopy: (000) 000-0000
With copy to:
Xxxxxx Laboratories
Domestic Xxxxx Xxxxxxxxxx
Xxxx. 000, Xxxx. XX0X
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, XX 00000
Attn: Divisional Vice President
Telecopy: (000) 000-0000
Either Party may give any notice, request, demand, claim, or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Either Party may
change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Party notice in
the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of Delaware.
(i) Amendments and Waivers. No amendment of any provisions of
this Agreement shall be valid unless the same shall be in a writing referring to
this Agreement signed by the Parties. Either Party may waive compliance by the
other Party with any provision of this Agreement, which waiver must be in
writing. No waiver by either Party of any default, misrepresentation, or breach
of warranty or covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or
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subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
(j) Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
(k) Expenses. Except as otherwise provided in this Agreement,
each of the Parties shall bear its own costs and expenses (including legal fees
and expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.
(l) Construction. The language used in this Agreement will be
deemed to be the language chosen by the Parties to express their mutual intent,
and no rule of strict construction shall be applied against either Party. Any
reference to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise. Any reference to the "transactions contemplated
hereby," the "transactions contemplated by this Agreement," the "transactions
contemplated under this Agreement" or the "transactions contemplated pursuant to
this Agreement" shall be deemed to also refer to any other document, agreement
or certificate to be executed or delivered in connection with the consummation
of the transaction in question contemplated by this Agreement. The Parties
intend that each representation,
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warranty, and covenant contained herein shall have independent significance. If
either Party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the Party has not breached shall not
detract from or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant.
(m) Restrictions on Transfer. Notwithstanding anything to the
contrary set forth in this Agreement and provided the Development Agreement has
not been terminated, Xxxxxx agrees that:
(i) Xxxxxx shall not sell or otherwise dispose of the
Shares issued to it for a period of one (1) year from the date of such
issuance (as to the Initial Shares, the First Additional Shares and the
Second Additional Shares, each a "Restricted Period"). From and after
the end of each Restricted Period, sales or other dispositions of the
Shares by Xxxxxx shall be limited to an amount not to exceed for each
365-day period one-half (1/2) of the Shares issued to Xxxxxx for the
relevant Restricted Period (subject to adjustment for any stock split,
stock dividend, subdivision or combination of the Common Stock or any
other change in corporate structure affecting the Common Stock);
provided, however, that any Shares permitted to be sold, but not sold
during the first such 365-day period, shall be added to the number of
Shares permitted to be sold during the second such 365-day period;
(ii) Nothing contained in this Section 13(m) shall
limit the right of Xxxxxx to transfer any of its Shares to a direct or
indirect wholly owned subsidiary of Xxxxxx.
(iii) At the request of NaPro, Xxxxxx shall supply
written representations to counsel to NaPro upon which such counsel
shall be entitled to rely in rendering the opinion referred to in
clause (iii) of the proviso contained in the definition of "Registrable
Shares." NaPro shall indemnify Xxxxxx, its directors, officers,
employees and agents, and each Person, if any, who controls Xxxxxx
within the meaning of the Securities Act or the Securities Exchange
Act, against all losses, claims, damages, liabilities and expenses
arising out of or relating to the offer and sale of Registrable Shares
in reliance on such opinion of counsel described in clause
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(iii) of the proviso contained in the definition of "Registrable
Shares," except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon the written representations by
Abbott to such counsel.
(n) Legends. Abbott agrees to the placement on certificates
representing the Shares purchased pursuant hereto, of a legend, substantially as
set forth below (except that such legend shall not be placed on any Shares that
have been registered under the Securities Act or if, in the opinion of counsel
(which opinion shall be in form and substance reasonably satisfactory to NaPro),
such legend is no longer required under the Securities Act):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION, AND MAY NOT BE OFFERED, SOLD, PLEDGED, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
ANY APPLICABLE SECURITIES LAWS OF SUCH OTHER STATE OR JURISDICTION.
THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES
THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS. THE TRANSFER OF
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE RESTRICTED BY
THE TERMS OF THAT CERTAIN STOCK PURCHASE AGREEMENT DATED AS OF JULY
23, 1999 BETWEEN NAPRO BIOTHERAPEUTICS AND XXXXXX LABORATORIES, THE
TERMS OF WHICH ARE AVAILABLE FROM NAPRO BIOTHERAPEUTICS, INC. UPON
REQUEST."
(o) Specific Performance. Each Party acknowledges and agrees
that the other Party may be damaged irreparably in the event of any of the
provisions of this Agreement are not performed in
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accordance with their specific terms or are otherwise breached. Accordingly,
each Party agrees that the other Party shall be entitled to seek an injunction
or injunctions to prevent breaches of the provisions of the Agreement and to
enforce specifically this Agreement and the terms and Agreement and the terms
and provisions hereof in any action instituted in any court of the United States
or any state thereof having jurisdiction over the Parties and the matter, in
addition to any other remedy to which they may be entitled, at law or in equity.
(p) Incorporation of Schedules. The Schedules identified in
this Agreement are incorporated herein by reference in their entirety and made a
part hereof.
[ALL SCHEDULES HAVE BEEN INTENTIONALLY OMITTED. NAPRO
BIOTHERAPEUTICS, INC. WILL FURNISH SUPPLEMENTALLY A COPY OF ANY
OMITTED SCHEDULE TO THE COMMISSION UPON REQUEST]
[Signature Page Follows.]
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IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date first above written.
XXXXXX LABORATORIES NAPRO BIOTHERAPEUTICS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxxx
Print Name: Xxxxxxx X. Xxxxxxxx Print Name: Xxxxxxxx X. Xxxxxxxxx
Title: President Title: President/CEO
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