Exhibit 2.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of May
28, 1998, by and among Neurocrine Biosciences, Inc., a Delaware corporation (the
"Parent") and the persons listed on the signature page who become signatories to
this Agreement (collectively, the "Investors and individually an "Investor").
Capitalized terms not defined herein shall have the meanings ascribed to them in
the Agreement and Plan of Reorganization dated May 1, 1998.
R E C I T A L S
WHEREAS, in connection with the merger (the "Merger") of a wholly owned
subsidiary of Parent with and into Northwest NeuroLogic, Inc., an Oregon
corporation ("NNL") pursuant to the Agreement and Plan of Reorganization dated
of even date herewith, Parent and the Investors desire to provide for certain
rights of the Investors with respect to registration of the Parent Common Stock
issued by Parent to the Investors upon exchange of the NNL Common Stock in the
Merger.
WHEREAS, it is a condition of the closing of the Merger that Parent
enter into this Agreement.
NOW THEREFORE, in consideration of the promises set forth above and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties agree as follows:
1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
(a) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(b) "Form S-3" shall mean Form S-3 issued by the Commission or
any substantially similar form then in effect.
(c) "Holder" shall mean any holder of outstanding Registrable
Securities which have not been sold to the public, but only if such holder is an
Investor or an assignee or transferee of Registration rights as permitted by
Section 8.
(d) "Initiating Holders" shall mean Holders who in the
aggregate hold and propose to register at least [***] shares of Registrable
Securities.
(e) "Material Adverse Event" shall mean an occurrence having a
consequence that either (a) is materially adverse as to the business,
properties, prospects or financial condition of the Parent or (b) is reasonably
foreseeable, has a reasonable likelihood of occurring, and if it were to occur
would materially adversely affect the business, properties, prospects or
financial condition of the Parent.
(f) The terms "Register", "Registered" and "Registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act ("Registration Statement"), and
the declaration or ordering of the effectiveness of such Registration Statement.
(g) "Registrable Securities" shall mean all shares of Parent
Common Stock issued or issuable to the Investors upon closing of the Merger,
including Common Stock issued pursuant to stock splits, stock dividends and
similar distributions with respect to such shares, provided that such shares (i)
are not available for immediate sale in the opinion of counsel to the Parent in
a transaction exempt from the registration and prospectus delivery requirements
of the Securities Act so that all transfer restrictions and restrictive legends
with respect thereto are removed upon consummation of such sale pursuant to
Regulation S, Rule 144, or otherwise under applicable federal securities laws,
or (ii) have not previously been sold to the public.
(h) "Registration Expenses" shall mean all expenses incurred
in complying with Section 2 of this Agreement, including, without limitation,
all federal and state registration, qualification and filing fees, printing
expenses, fees and disbursements of counsel for the Parent, blue sky fees and
expenses, and the expense of any special audits incident to or required by any
such registration, other than Selling Expenses.
(i) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
(j) "Selling Expenses" shall mean all underwriting discounts
and selling commissions applicable to the sale of Registrable Securities
pursuant to this Agreement, as well as fees and disbursements of legal counsel
for the selling Holders.
2. Demand Registration.
2.1 Request for Registration on Form S-3. Subject to the terms
of this Agreement, in the event that Parent receives from Initiating Holders at
any time after the Effective Time and prior to the first anniversary of the
Effective Time, a written request that Parent effect any Registration on Form
S-3 (or any successor form to Form S-3 regardless of its designation) at a time
when Parent is eligible to register securities on Form S-3 (or any successor
form to Form S-3 regardless of its designation) for an offering of Registrable
Securities, the reasonably anticipated aggregate offering price to the public of
which would exceed [***], Parent will promptly give written notice of the
proposed Registration to all the Holders and will, as soon as practicable,
effect Registration of the Registrable Securities specified in such request,
together with all or such portion of the Registrable Securities of any Holder
joining in such request as are specified in a written request delivered to the
Parent within 20 days after written notice from the Parent of the proposed
Registration. Parent shall not be obligated to take any action to effect any
such registration pursuant to this Section 2.1: (i) prior to 90 days after the
Effective Time, (ii) subsequent to 365 days after the Effective Time, or (iii)
after Parent has effected one such Registration pursuant to this Section 2.1 and
such Registration has been declared effective and, if underwritten, has closed.
2.2 Right of Deferral of Registration. If (i) Parent shall
furnish to all such Holders who joined in the request a certificate signed by
the President of Parent stating that, in the good faith judgment of the Board of
Directors of Parent, it would be seriously detrimental to Parent for any
Registration to be effected as requested under Section 2.1, or (ii) Parent shall
have effected a Registration other than a Registration of securities issued or
issuable pursuant to an employee benefit plan (whether or not pursuant to
Section 2.1) within ninety (90) days preceding the date of such request, Parent
shall have the right to defer the filing of a Registration Statement with
respect to such offering for a period of not more than (i) sixty (60) days from
delivery of the request of the Initiating Holders, or (ii) ninety (90) days of
the date of filing of such prior Registration respectively; provided, however,
that Parent may not utilize this right more than twice in any 12-month period.
2.3 Registration of Other Securities. Any Registration
Statement filed pursuant to the request of the Initiating Holders under this
Section 2 may, subject to the provisions of Section 2.4, include securities of
Parent other than Registrable Securities.
2.4 Underwriting in Demand Registration.
2.4.1 Notice of Underwriting. If the
Initiating Holders intend to distribute the Registrable Securities covered by
their request by means of an underwriting, they shall so advise Parent as a part
of their request made pursuant to this Section 2, and Parent shall include such
information in the written notice referred to in Section 2.1. The right of any
Holder to Registration pursuant to Section 2.1 shall be conditioned upon such
Holder's agreement to participate in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder with
respect to such participation and inclusion).
2.4.2 Inclusion of Other Holders in Demand
Registration. If Parent, officers or directors of Parent holding Common Stock
other than Registrable Securities, or holders of securities other than
Registrable Securities (who are collectively referred to as "Other Holders"),
request inclusion in such Registration, the Initiating Holders shall, subject to
the allocation provisions of Section 2.4.4 below, on behalf of all Holders,
offer to such Other Holders that such securities other than Registrable
Securities be included in the underwriting, conditioned upon the acceptance by
such Other Holders of the terms of this Section 2. In event of the inclusion in
the Registration of securities held by Other Holders, such Other Holders shall
be deemed to be Holders for all purposes under this Agreement, other than the
allocation provisions of Section 2.4.4 below.
2.4.3 Selection of Underwriter in Demand
Registration. Parent shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into and perform its
obligations under an underwriting agreement in usual and customary form with the
representative ("Underwriter's Representative") of the underwriter or
underwriters selected for such underwriting by the Holders of a majority of the
Registrable Securities being registered by the Initiating Holders and consented
to by Parent (which consent shall not be unreasonably withheld).
2.4.4 Marketing Limitation in Demand
Registration. In the event the Underwriter's Representative advises the
Initiating Holders in writing that market factors (including, without
limitation, the aggregate number of shares of Common Stock 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 the Initiating Holders shall so
advise all Holders and Other Holders, and the number of shares of Registrable
Securities and other securities that may be included in the Registration and
underwriting shall be allocated first among all Holders of Registrable
Securities and Other Holders of securities subject to contractual registration
rights and second among all Other Holders of securities not subject to
contractual registration rights, in proportion, as nearly as practicable, to the
number of shares proposed to be included in such Registration by such Holder or
Other Holder. No Registrable Securities or other securities excluded from the
underwriting by reason of this Section 2.4.4 shall be included in such
Registration Statement.
2.4.5 Right of Withdrawal in Demand
Registration. If any Holder of Registrable Securities, or a holder of other
securities entitled (upon request) to be included in such Registration,
disapproves of the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to Parent, the underwriter and the Initiating
Holders delivered at least seven days prior to the effective date of the
Registration Statement. The securities so withdrawn shall also be withdrawn from
the Registration Statement.
2.5 Blue Sky in Demand Registration. In the event of any
Registration pursuant to Section 2, Parent will exercise reasonable efforts to
Register and qualify the securities covered by the Registration Statement under
such other securities or Blue Sky laws of such jurisdictions as the Holders
shall reasonably request and as shall be reasonably appropriate for the
distribution of such securities; provided, however, that Parent shall not be
required to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
3. Expenses of Registration. All Registration Expenses incurred in
connection with one Registration pursuant to Section 2.1 shall be borne by
Parent. However, Parent shall not be required to pay for any expenses of Holders
in connection with any registration proceeding begun pursuant to Section 2.1 if
the registration request is subsequently withdrawn at the request of the Holders
of a majority of the Registrable Securities to be registered (which Holders
shall bear such expenses); provided, however, that (i) if at the time of such
withdrawal, the Holders have learned of a Material Adverse Event not known to
the Holders at the time of their request or (ii) such withdrawal is made after a
deferral of such registration by Parent pursuant to Section 2.2, then the
Holders shall not be required to pay any of such expenses and shall retain their
rights pursuant to Section 2.1. All Selling Expenses shall be borne by the
Holders of the securities registered pro rata on the basis of the number of
shares registered.
4. Registration Procedures. Parent will keep each Holder whose
Registrable Securities are included in any registration pursuant to this
Agreement advised as to the initiation and completion of such Registration. At
its expense Parent will: (a) use reasonable efforts to keep such Registration
effective for a period ending on the first anniversary of the Effective Time or
until the Holder or Holders have completed the distribution described in the
Registration Statement relating thereto (including Registrable Securities that
will be released from lockup agreements after the effective date of the
Registration), whichever first occurs; (b) furnish such number of prospectuses
(including preliminary prospectuses) and other documents as a Holder from time
to time may reasonably request; (c) prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement; and (d) notify each
Holder of Registrable Securities covered by such Registration Statement at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the prospectus
included in such Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state 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.
5. Information Furnished by Holder. It shall be a condition precedent
of Parent's obligations under this Agreement that each Holder of Registrable
Securities included in any Registration furnish to Parent such information
regarding such Holder and the distribution proposed by such Holder or Holders as
Parent may reasonably request.
6. Indemnification.
6.1 Parent's Indemnification of Holders. To the extent permitted by
law, Parent will indemnify each Holder, each of its officers, directors and
constituent partners, legal counsel and accountants for the Holders, and each
person controlling such Holder, with respect to which Registration,
qualification or compliance of Registrable Securities has been effected pursuant
to this Agreement, and each underwriter, if any, and each person who controls
any underwriter against all claims, losses, damages or liabilities (or actions
in respect thereof) to the extent such claims, losses, damages or liabilities
arise out of or are based upon any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus or other document
(including any related Registration Statement) incident to any such
Registration, qualification or compliance, or are based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any violation by
Parent of the Securities Act, the Securities Exchange Act of 1934, as amended
(the "1934 Act"), or any state securities law, or any rule or regulation
promulgated under the Securities Act, the 1934 Act or any state securities law,
applicable to Parent and relating to action or inaction required of Parent in
connection with any such Registration, qualification or compliance; and Parent
will reimburse each such Holder, each of its officers, directors and constituent
partners, legal counsel and accountants, each such underwriter, and each person
who controls any such Holder or underwriter, for any legal and any other
expenses reasonably incurred, as incurred, in connection with investigating or
defending any such claim, loss, damage, liability or action; provided, however,
that the indemnity contained in this Section 6.1 shall not apply to amounts paid
in settlement of any such claim, loss, damage, liability or action if settlement
is effected without the consent of Parent (which consent shall not unreasonably
be withheld); and provided, further, that Parent will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based upon any untrue statement or omission based upon
written information furnished to Parent by such Holder, its officers, directors,
constituent partners, legal counsel, accountants, underwriter or controlling
person and stated to be for use in connection with the offering of securities of
Parent.
6.2 Holder's Indemnification of Parent. To the extent
permitted by law, each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such Registration,
qualification or compliance is being effected pursuant to this Agreement,
indemnify Parent, each of its directors and officers, each legal counsel and
independent accountant of the Parent, each underwriter, if any, of Parent's
securities covered by such a Registration Statement, each person who controls
Parent or such underwriter within the meaning of the Securities Act, and each
other such Holder, each of its officers, directors, constituent partners, legal
counsel and accountants and each person controlling such other Holder, against
all claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based upon any untrue statement (or alleged untrue statement)
by such Holder, of a material fact contained in any such Registration Statement,
prospectus, offering circular or other document (including any related
Registration Statement) incident to any such Registration, qualification or
compliance, or any omission (or alleged omission) by such Holder, to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by such Holder of the
Securities Act, the 1934 Act or any state securities law, or any rule or
regulation promulgated under the Securities Act, the 1934 Act or any state
securities law, applicable to such Holder and relating to action or inaction
required of such Holder in connection with any such Registration, qualification
or compliance; and will reimburse Parent, such Holders, such directors,
officers, partners, persons, law and accounting firms, underwriters or control
persons for any legal and any other expenses reasonably incurred, as incurred,
in connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement), omission (or alleged
omission) or violation (or alleged violation) is made in such Registration
Statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to Parent by such Holder and
stated to be specifically for use in connection with the offering of securities
of Parent, provided, however, that each Holder's liability under this Section
6.2 shall not exceed such Holder's net proceeds from the offering of securities
made in connection with such Registration; and provided, further, that the
indemnity contained in this Section 6.2 shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if settlement is
effected without the consent of the Holder (which consent shall not unreasonably
be withheld).
6.3 Indemnification Procedure. Promptly after receipt by an
indemnified party under this Section 6 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 6, notify the indemnifying
party in writing of the commencement thereof and generally summarize such
action. The indemnifying party shall have the right to participate in and to
assume the defense of such claim, jointly with any other indemnifying party
similarly noticed; provided, however, that the indemnifying party shall be
entitled to select counsel for the defense of such claim with the approval of
any parties entitled to indemnification, which approval shall not be
unreasonably withheld; provided further, however, that if either party
reasonably determines that there may be a conflict between the position of
Parent and the Investors in conducting the defense of such action, suit or
proceeding by reason of recognized claims for indemnity under this Section 6,
then counsel for such party shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to protect the
interest of such party. The failure to notify an indemnifying party promptly of
the commencement of any such action, if prejudicial to the ability of the
indemnifying party to defend such action, shall relieve such indemnifying party,
to the extent so prejudiced, of any liability to the indemnified party under
this Section 6, but the omission so to notify the indemnifying party will not
relieve such party of any liability that such party may have to any indemnified
party otherwise than under this Section 6.
7. Reports Under Securities Exchange Act of 1934. With a view to making
available to the Investors the benefits of Rule 144 and any other rule or
regulation of the Commission that may at any time permit an Investor to sell
securities of Parent to the public without Registration or pursuant to a
Registration on Form S-3, Parent agrees to use reasonable efforts to:
(a) make and keep public information available, as those
terms are defined in Rule 144;
(b) file with the Commission in a timely manner all reports
and other documents required of Parent under the Securities Act and the 1934
Act; and
(c) furnish to any Investor, so long as such Investor owns any
Registrable Securities, forthwith upon request (i) a written statement by Parent
that it has complied with the reporting requirements of Rule 144, the Securities
Act and the 1934 Act, or that it qualifies as a registrant whose securities may
be resold pursuant to Form S-3, (ii) a copy of the most recent annual or
quarterly report of Parent and such other reports and documents so filed by
Parent, and (iii) such other information as may be reasonably requested in
availing any Investor of any rule or regulation of the Commission which permits
the selling of any such securities without registration.
8. Transfer of Rights. The Registration rights of the Investors set
forth in Section 2 may be assigned by any Holder to a transferee or assignee of
any Registrable Securities not sold to the public acquiring at least [***]
shares of such Holder's Registrable Securities (equitably adjusted for any
recapitalizations, stock splits, combinations, and the like) or acquiring all of
the Registrable Securities held by such Holder if transferred to a single
entity; provided, however, that (i) Parent must receive written notice prior to
the time of said transfer, stating the name and address of said transferee or
assignee and identifying the securities with respect to which such information
and Registration rights are being assigned, and (ii) the transferee or assignee
of such rights must not be a person deemed in good faith by the Board of
Directors of Parent to be a competitor or potential competitor of Parent.
Notwithstanding the limitation set forth in the foregoing sentence respecting
the minimum number of shares which must be transferred, any Holder which is a
partnership may transfer such Holder's Registration rights to such Holder's
constituent partners (or may transfer to their heirs in the case of individuals)
without restriction as to the number or percentage of shares acquired by any
such constituent partner (or heirs).
9. Miscellaneous.
9.1 Entire Agreement; Successors and Assigns. This Agreement
constitutes the entire contract between Parent and the Investors relative to the
subject matter hereof. Subject to the exceptions specifically set forth in this
Agreement, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective executors, administrators, heirs,
successors and assigns of the parties.
9.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts entered into and wholly to be performed within the State of California
by California residents.
9.3 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.4 Notices. Any notice required or permitted hereunder shall
be given in writing and shall be conclusively deemed effectively given upon
personal delivery, or five (5) days after deposit in the United States mail, by
first class mail, postage prepaid, or upon sending if sent by commercial
overnight delivery service addressed (i) if to Parent, as set forth below
Parent's name on the signature page of this Agreement, and (ii) if to an
Investor, at such Investor's address as set forth on the signature page of this
Agreement, or at such other address as Parent or such Investor may designate by
ten (10) days' advance written notice to the Investors or to Parent,
respectively.
9.5 Amendment of Agreement. Except as otherwise specifically
provided herein, any provision of this Agreement may be amended by a written
instrument signed by Parent and by persons holding more than fifty-five percent
(55%) of the then outstanding Registrable Securities (calculated on an as
converted basis).
9.6 Aggregation of Stock. All Registrable Securities held or
acquired by affiliated entities or persons shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement.
9.7 Severability. If any provision of this Agreement is held
to be unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
The PARENT: NEUROCRINE BIOSCIENCES, INC.
/s/ Xxxx X. Xxxxxx
Senior Vice President and
Chief Financial Officer
The INVESTORS: /s/ Xxxxx X. Xxxxx
/s/ Xxxx X. Xxxxxxxx
Manager
Cascadia Pacific Management
/s/ Xxxxx Xxxx
/s/ Xxxxxxx Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
Director, Technology Management
Oregon Health Sciences University
