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EXHIBIT 10.7
CHEMGENICS PHARMACEUTICALS INC.
STANDSTILL AGREEMENT
THIS AGREEMENT, dated as of November 27, 1996, is between American Home
Products Corporation ("AHPC"), a Delaware Corporation, acting through its
Wyeth-Ayerst Laboratories Division, ("Wyeth-Ayerst"), and ChemGenics
Pharmaceuticals Inc., a Delaware corporation (the "Company").
WITNESSETH:
WHEREAS on the date hereof, AHPC is acquiring 833,334 shares of Series
E Convertible Preferred Stock, par value $0.01 per share, of the Company (the
"Series E Preferred Stock") for investment purposes pursuant to the terms of a
Series E Preferred Stock Purchase Agreement, dated as of the date hereof (the
"Series E Agreement") and will, subject to certain conditions, purchase
additional shares of Series E Preferred Stock and/or shares of the Company's
Common Stock, $0.001 par value per share ("Common Stock");
WHEREAS the execution and delivery of this Agreement by AHPC is a
condition precedent to the Company's obligations under the Series E Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements set forth herein and for other good and valuable
consideration the receipt of which is hereby acknowledged, the parties,
intending to be legally bound hereby, agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES
AHPC hereby represents and warrants to the Company as follows:
(a) AHPC has full legal right, power and authority to enter
into and perform this Agreement. The execution and delivery of this Agreement by
AHPC and the consummation by AHPC of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on behalf of AHPC. This
Agreement is a valid and binding obligation of AHPC enforceable against AHPC in
accordance with its terms, except that such enforcement may be subject to (i)
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
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(b) Neither the execution and delivery of this Agreement by
AHPC nor the consummation by AHPC of the transactions contemplated hereby
conflicts with or constitutes a violation of or default under the charter or
by-laws of AHPC, any statute, law, regulation, order or decree applicable to
AHPC, or any contract, commitment, agreement, arrangement or restriction of any
kind to which AHPC is a party or by which AHPC is bound.
ARTICLE II
LIMITATIONS AND RESTRICTIONS
Section 2.01 Restrictions on Certain Actions by AHPC. Except pursuant
to the terms of the Series E Agreement or upon conversion of the Series E
Preferred Stock into Common Stock, AHPC agrees that during the term of this
Agreement, AHPC will not, nor will it permit any of its affiliates or associates
(as such terms are used in Rule 12b-2 of the Securities Exchange Act of 1934
(the "Exchange Act"), these terms to have such meaning throughout this
Agreement), from and after the date that such person becomes an affiliate or
associate unless in any such case specifically invited to do so by the Board of
Directors of the Company, to:
(a) acquire, announce an intention to acquire, offer or
propose to acquire, solicit an offer to sell or agree to acquire by purchase, by
gift, by joining a partnership, limited partnership, syndicate or other "group"
(as such term is used in Section 13(d)(3) of the Exchange Act, such term to have
such meaning throughout this Agreement) or otherwise, any (i) material assets,
businesses or properties of the Company other than in the ordinary course of
business or pursuant to the express terms of the Collaborative Research and
License Agreement dated the date hereof between Wyeth-Ayerst and the Company, or
(ii) shares of Common Stock, any additional shares of the Series E Preferred
Stock or any other Company securities convertible into, exchangeable for or
exercisable for Common Stock (all such securities, collectively, "Voting
Securities") except that the foregoing shall not apply to purchases (i) made by
certain affiliates of AHPC on their own accounts without the consent or approval
of AHPC which are majority owned by AHPC but AHPC is under certain contractual
restrictions preventing control of such affiliates or (ii) directly or
indirectly, which would not otherwise increase AHPC's ownership position in the
Company by more than 2% in addition to purchases under the Series E Agreement.
(b) participate in the formation or encourage the formation
of, or join or in any way participate with, any "person" (as such term is used
in Section 13(d)(3) of the Exchange Act and Section 2(2) of the Securities Act
of 1933 (the "Securities Act"), such term to have such meaning throughout this
Agreement) which owns or seeks to acquire beneficial ownership of any Voting
Securities;
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(c) solicit, or participate in any "solicitation" of "proxies"
or become a "participant" in any "election contest" (as such terms are defined
or used in Regulation 14A under the Exchange Act, these terms to have such
meaning throughout this Agreement) with respect to the Company;
(d) initiate, propose or otherwise solicit stockholders for
the approval of one or more stockholder proposals with respect to the Company or
induce any other person to initiate any stockholder proposal;
(e) seek to place any representative on the Board of Directors
of the Company, or seek to have called any meeting of the stockholders of the
Company;
(f) deposit any Voting Securities in a voting trust or, unless
specifically contemplated by this Agreement or the Series E Agreement subject
them to a voting agreement or other agreement or arrangement with respect to the
voting of such Voting Securities; or
(g) otherwise act, alone or in concert with others, to seek to
control the management, Board of Directors, policies or affairs of the Company
or solicit, propose, seek to effect or negotiate with any other person
(including, without limitation, the Company) with respect to any form of
business combination or other extraordinary transaction with the Company or any
of its subsidiaries or any restructuring, recapitalization, similar transaction
or other transaction not in the ordinary course of business with respect to the
Company or any of its subsidiaries, solicit, make or propose or negotiate with
any other person with respect to, or announce an intent to make, any tender
offer or exchange offer for any securities of the Company or any of its
subsidiaries, or publicly disclose an intent, purpose, plan or proposal with
respect to the Company, any of its subsidiaries or any securities or assets of
the Company or any of its subsidiaries, that would violate the provisions of
this Section 2.01, or assist, participate in, facilitate or solicit any effort
or attempt by any person to do so or seek to do any of the foregoing.
ARTICLE III
MISCELLANEOUS
Section 3.01 Interpretation. For all purposes of this Agreement, the
term Company Common Stock shall include any securities of any issuer entitled to
vote generally for the election of directors of such issuer which securities the
holders of the Company Common Stock shall have received or as a matter of right
be entitled to receive as a result of (i) any capital reorganization or
reclassification of the capital stock of the Company, (ii) any consolidation,
merger or share exchange of the Company with or into another corporation or
(iii) any sale of all or substantially all the assets of the Company.
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Section 3.02 Enforcement. (a) AHPC acknowledges and agrees that
irreparable damage would occur if any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
materially breached. Accordingly, the Company will be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically
its provisions in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which the Company
may be entitled at law or in equity.
(b) No failure or delay on the part of the Company in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege.
Section 3.03 Entire Agreement. This Agreement, together with the
applicable provisions of the Series E Agreement, constitutes the entire
understanding of the parties with respect to the transactions contemplated by
them. This Agreement may be amended only by an agreement in writing executed by
all the parties.
Section 3.04 Severability. If any provision of this Agreement is held
by a court of competent jurisdiction to be unenforceable, the remaining
provisions shall remain in full force and effect. It is declared to be the
intention of the parties that they would have executed the remaining provisions
without including any that may be declared unenforceable.
Section 3.05 Headings. Descriptive headings are for convenience only
and will not control or affect the meaning or construction of any provision of
this Agreement.
Section 3.06 Counterparts. This Agreement may be executed in two or
more counterparts, and each such executed counterpart will be an original
instrument.
Section 3.07 Notices. All notices, consents, requests, instructions,
approvals and other communications provided for in this Agreement and all legal
process in regard to this Agreement will be validly given, made or served, if in
writing and delivered personally or by courier service providing evidence of
receipt, by telecopy (except for legal process) or sent by registered or
certified mail, return receipt requested postage paid.
if to the Company: ChemGenics Pharmaceuticals Inc.
One Xxxxxxx Xxxxxx
Xxxxxxxx 000, Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Chief Executive Officer
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with a copy to: Xxxxxxx X. Xxxxxx, Esq.
Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
if to AHPC: American Home Products Corporation
Five Giralda Farms
Madison, NJ 07940
Attention: Senior Vice President and
General Counsel
or to such other address or telecopy number as any party may, from time to time,
designate in a written notice given in a like manner. Notice by telecopy shall
be deemed delivered on the day telephone confirmation of receipt is given.
Section 3.08 Successors and Assigns. This Agreement shall bind the
successors and assigns of the parties, and inure to the benefit of any successor
or assign of any of the parties; provided, however, that no party may assign
this Agreement without the other party's prior written consent.
Section 3.09 Term. The term of this Agreement shall be the period from
the date first referred to above through and including November 26, 2006.
Section 3.10 Governing Law. This Agreement will be governed by and
construed and enforced in accordance with the law of The Commonwealth of
Massachusetts, without giving effect to the conflict of laws principles thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first referred to above.
CHEMGENICS PHARMACEUTICALS INC.
By:__________________________
AMERICAN HOME PRODUCTS
CORPORATION
ACTING THROUGH ITS WYETH-AYERST
LABORATORIES DIVISION
By:__________________________
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