EXHIBIT 10.6
COLLATERAL THERAPEUTICS INC.
AMENDED AND RESTATED CO-SALE AGREEMENT
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This Amended and Restated Co-Sale Agreement (this "Agreement") is made
as of the 30th day of June, 1997 by and among the individuals listed on SCHEDULE
A hereto (collectively, the "Founders"), Xxxxx X. Xxxxxxxx, an individual
("Xxxxxxxx"), Collateral Therapeutics, Inc., a California corporation (the
"Company"), Schering Berlin Venture Corp., a Delaware corporation ("SBVC"), and
the Wellcome Trust, a charitable trust organized under the laws of England
("Wellcome").
In consideration of the mutual covenants set forth herein, the parties
agree as follows:
1. DEFINITIONS.
(a) "Stock" shall mean: (i) with respect to a Founder, shares of the
Company's Common Stock now owned or subsequently acquired by such Founder; or
(ii) with respect to SBVC, Wellcome or Xxxxxxxx, shares of the Company's
Preferred Stock (including Common Stock) now owned or subsequently acquired by
SBVC, Wellcome or Xxxxxxxx, respectively.
(b) "Preferred Stock" shall mean the Company's Preferred Stock.
(c) "Common Stock" shall mean the Company's Common Stock and shares
of Common Stock issued or issuable upon conversion of the Company's Preferred
Stock.
(d) "Party" shall mean each Founder, SBVC, Wellcome and Xxxxxxxx.
(e) "Selling Party(ies)" shall mean: (i) SBVC, if SBVC attempts to
transfer Preferred Stock (including Common Stock acquired upon conversion of
Preferred Stock) for value; (ii) Wellcome, if Wellcome attempts to transfer
Preferred Stock (including Common Stock acquired upon conversion of Preferred
Stock) for value; (iii) Xxxxxxxx, if Xxxxxxxx attempts to transfer Preferred
Stock (including Common Stock acquired upon conversion of Preferred Stock) for
value; or (iv) any Founder, if any Founder attempts to transfer Common Stock for
value.
(f) "Co-Selling Party(ies)" shall mean: (i) each of SBVC, Wellcome
and Xxxxxxxx, if any Founder attempts to transfer Common Stock for value; or
(ii) each Founder, if SBVC, Wellcome or Xxxxxxxx attempts to transfer Preferred
Stock (including Common Stock acquired upon conversion of Preferred Stock) for
value.
2. SALES BY A PARTY.
(a) If a Selling Party proposes to sell or transfer any shares of
Stock in one or more related transactions which will result in (i) the transfer
during the term of this Agreement
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of an aggregate of 25,000 or more shares of Stock by such Selling Party or (ii)
the transferee of such shares holding more than fifty percent (50%) of the
Common Stock, then such Selling Party shall promptly give written notice (the
"Notice") to the Company and the Co-Selling Parties at least twenty (20) days
prior to the closing of such sale or transfer. The Notice shall describe in
reasonable detail the proposed sale or transfer including, without limitation,
the number of shares of Stock to be sold or transferred, the nature of such sale
or transfer, the consideration to be paid and the name and address of each
prospective purchaser or transferee. In the event that the sale or transfer is
being made pursuant to the provisions of Section 3(a) or 3(b) hereof, the Notice
shall state under which subsection the sale or transfer is being made.
(b) Each Co-Selling Party shall have the right, exercisable upon
written notice to such Selling Party within fifteen (15) days after receipt of
the Notice, to participate in such sale of Stock on the same terms and
conditions. To the extent that any Co-Selling Party exercises such right of
participation in accordance with the terms and conditions set forth below (the
"Electing Co-Selling Party"), the number of shares of Stock that the Selling
Party may sell in the transaction shall be correspondingly reduced.
(c) Each Electing Co-Selling Party may sell all or any part of that
number of shares of Stock (on an as-converted basis) equal to the product
obtained by multiplying (i) the aggregate number of shares of Stock (on an
as-converted basis) covered by the Notice by (ii) a fraction the numerator of
which is the number of shares of Stock (on an as-converted basis) owned by such
Electing Co-Selling Party at the time of the sale or transfer and the
denominator of which is the total number of shares of Stock (on an as-converted
basis) owned by all Parties at the time of the sale or transfer.
(d) If any Electing Co-Selling Party fails to elect to fully
participate in such sale by the Selling Party pursuant to this Section 2, the
Selling Party shall give notice of such failure to each other Electing
Co-Selling Party who did so elect (the "Participants"). Such notice may be made
by telephone if confirmed in writing within two (2) days. The Participants
shall have five (5) days from the date such notice was given to agree to sell
their pro rata share of the unsold portion. For purposes of this paragraph, a
Participant's pro rata share shall be the ratio of (i) the number of shares of
Stock (on an as-converted basis) held by such Participant to (ii) the total
number of shares of Stock (on an as-converted basis) held by the Participants
and the Selling Party.
(e) Each Electing Co-Selling Party shall effect its participation in
the sale by promptly delivering to the Selling Party for transfer to the
prospective purchaser one or more certificates, properly endorsed for transfer,
which represent the type and number of shares of Stock which such Electing
Co-Selling Party elects to sell (with the number of shares of Preferred Stock
determined on an as-converted basis).
(f) (i) If the prospective purchaser had bargained for the delivery
of Common Stock and objects to the delivery of Preferred Stock in lieu of Common
Stock, an Electing Co-Selling Party who desired to deliver Preferred Stock shall
convert such Preferred
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Stock into Common Stock and deliver Common Stock as provided in Section 2(e).
The Company agrees to make any such conversion concurrent with the actual
transfer of such shares to the purchaser.
(ii) If the prospective purchaser had bargained for the delivery
of Preferred Stock and objects to the delivery of Common Stock in lieu of
Preferred Stock, the Selling Party shall cause the prospective purchaser to
accept delivery of Common Stock.
(g) The stock certificate or certificates that the Electing
Co-Selling Party delivers to the Selling Party pursuant to this Section 2 shall
be transferred to the prospective purchaser in consummation of the sale of the
Stock pursuant to the terms and conditions specified in the Notice, and the
Selling Party shall concurrently therewith remit to each Electing Co-Selling
Party that portion of the sale proceeds to which each Electing Co-Selling Party
is entitled by reason of its participation in such sale. To the extent that any
prospective purchaser or purchasers refuses to purchase shares or other
securities from an Electing Co-Selling Party exercising its rights of co-sale
hereunder, the Selling Party shall not sell to such prospective purchaser or
purchasers any Stock unless and until, simultaneously with such sale, the
Selling Party shall purchase such shares or other securities from each Electing
Co-Selling Party.
(h) The exercise or non-exercise of the rights of any Party to
participate in one or more sales of Stock made by another Party shall not
adversely affect their rights to participate in subsequent sales of Stock
subject to restrictions on participation set forth in Section 2(a).
3. EXEMPT TRANSFERS.
(a) Notwithstanding the foregoing, the co-sale rights of the Parties
shall not apply to: (i) any pledge of Stock made pursuant to a bona fide loan
transaction that creates a mere security interest; (ii) any transfer to the
ancestors, descendants or spouse or to trusts for the benefit of such persons or
a Party; (iii) any transfer by a Founder to a partnership or its partners; or
(iv) any transfer by a Founder to a partnership or its partners; or (iv) any
bona fide gift; PROVIDED that (A) the transferring Party shall inform the other
Parties of such pledge, transfer or gift prior to effecting it and (B) the
pledgee, transferee or donee shall furnish the other Parties with a written
agreement to be bound by and comply with all provisions of Section 2 hereunder.
Such transferred Stock shall remain "Stock" hereunder, and such pledgee,
transferee or donee shall be treated as a "Party" for purposes of this
Agreement.
(b) Notwithstanding the foregoing, the provisions of Section 2 shall
not apply to the sale of any Stock: (i) to the public pursuant to a
registration statement filed with, and declared effective by, the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the
"Securities Act"); (ii) to the Company; or (iii) if prior to such sale, the
Selling Party held less than 1% of the Company's outstanding shares or the
Founders collectively held less than 15% of the Company's outstanding shares.
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4. PROHIBITED TRANSFERS.
(a) In the event a Selling Party should sell any Stock in
contravention of the co-sale rights of any Co-Selling Party under this Agreement
(a "Prohibited Transfer"), the Co-Selling Party, in addition to such other
remedies as may be available at law, in equity or hereunder, shall have the put
option provided below, and the Selling Party shall be bound by the applicable
provisions of such option.
(b) In the event of a Prohibited Transfer, a Co-Selling Party shall
have the right to sell to the Selling Party the type and number of shares of
Stock equal to the number of shares such Co-Selling Party would have been
entitled to transfer to the purchaser pursuant to Section 2(c) had the
Prohibited Transfer been effected pursuant to and in compliance with the terms
hereof. Such sale shall be made on the following terms and conditions:
(i) The price per share at which the shares are to be sold
to the Selling Party shall be equal to the price per share paid by the purchaser
to the Selling Party in the Prohibited Transfer. The Selling Party shall also
reimburse the Co-Selling Party for any and all fees and expense, including legal
fees and expense, incurred pursuant to the exercise or the attempted exercise of
the Co-Selling Party's rights under Section 2.
(ii) Within ninety (90) days after the later of the dates on
which the Co-Selling Party (A) received notice of the Prohibited Transfer or (B)
otherwise become aware of the Prohibited Transfer, the Co-Selling Party shall,
if exercising the option created hereby, deliver to the Selling Party the
certificate or certificates representing shares to be sold, each certificate to
be properly endorsed for transfer.
(iii) The Selling Party shall, upon receipt of the
certificate or certificates for the shares to be sold by the Co-Selling Party,
pursuant to this Section 4(b), pay the aggregate purchase price therefor and the
amount of reimbursable fees and expense, as specified in Section 4(b)(i), in
cash or by other means reasonably acceptable to the Co-Selling Party.
(iv) Notwithstanding the foregoing, any attempt by a Party
to transfer Stock in violation of Section 2 hereof shall be void and the Company
agrees it will not effect such a transfer nor will it treat any alleged
transferee as the holder of such shares without the written consent of each
other Party.
5. LEGEND.
(a) Each certificate representing shares of Stock now or hereafter
owned by the Parties or issued to any person in connection with a transfer
pursuant to Section 3(a) hereof shall be endorsed with the following legend:
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE
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TERMS AND CONDITIONS OF A CERTAIN CO-SALE AGREEMENT BY AND AMONG XXXXXX
XXXXXXXX, SCHERING BERLIN VENTURE CORP., THE WELLCOME TRUST, THE
CORPORATION AND CERTAIN HOLDERS OF STOCK OF THE CORPORATION. COPIES OF
SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
CORPORATION."
(b) Each Party agrees that the Company may instruct its transfer
agent to impose transfer restrictions on the shares represented by certificates
bearing the legend referred to in Section 5(a) above to enforce the provisions
of this Agreement and the Company agrees to promptly do so. The legend shall be
removed upon termination of this Agreement.
6. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed under the laws
of the State of California.
(b) Any provision may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only by the written consent of (i) as to the Company, only by
the Company, (ii) as to SBVC, Wellcome or Xxxxxxxx, by SBVC, Wellcome or
Xxxxxxxx, respectively, and their respective assignees, and (iii) as to each
Founder, such Founder, provided that any Party may waive any of its rights
hereunder without obtaining the consent of any other Party. Any amendment or
waiver effected in accordance with clauses (i), (ii) and (iii) of this Section
shall be binding upon SBVC, Wellcome, Xxxxxxxx, and their respective successors
and assigns, the Company and the Founder in question.
(c) This Agreement and the rights and obligations of the parties
hereunder shall inure to benefit of, and be binding upon, their respective
successors, assigns and legal representatives. The rights of the Parties
hereunder are only assignable (i) by each of such Parties to any other Party or
(ii) to an assignee or transferee who acquires at least 100,000 shares of Stock
purchased by a Party.
(d) This Agreement shall terminate upon the earlier of (i) the
closing of a firm commitment underwritten public offering pursuant to an
effective registration statement under the Securities Act covering the offer and
sale of the Company's Common Stock at an aggregate offering price of not less
than $10,000,000, and (ii) the closing of the Company's sale of all or
substantially all of its assets or the acquisition of the Company by another
entity by means of merger or consolidation resulting in the exchange of the
outstanding shares of the Company's capital stock for securities or
consideration issued, or caused to be issued, by the acquiring entity or its
subsidiary.
(e) Each Party represents and warrants that he, she or it is the sole
legal and beneficial owner of the shares of Stock subject to this Agreement and
that no other person or entity has any interest (other than a community property
interest) in such shares.
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(f) All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given upon personal delivery to the Party to be
notified or five days after deposit in the United States mail, by registered or
certified mail, postage prepaid and properly addressed to the Party to be
notified as set forth on the signature page hereof or at such other address as
such Party may designate by ten (10) days' advance written notice to the other
Parties hereto. Notwithstanding the foregoing, the telephone notice permitted
by Section 2(d) shall be effective at the time it is given.
(g) In the event one or more of the provisions of this Agreement
should, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein.
(h) In the event that any dispute among the parties to this Agreement
should result in litigation, the prevailing party in such dispute shall be
entitled to recover from the losing party all fees, costs and expenses of
enforcing any right of such prevailing party under or with respect to this
Agreement, including, without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
(i) 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.
(j) This Agreement constitutes a restatement in its entirety of the
Co-Sale Agreement dated May 7, 1996, between and among the Company, the Founders
and SBVC. Upon the effectiveness of this Agreement, the May 7, 1996 Co-Sale
Agreement shall be terminated and of no further force or effect, and neither the
Company nor any other party to such agreement shall have any further rights or
obligations under such agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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The foregoing agreement is hereby executed as of the date first above
written.
"COMPANY"
COLLATERAL THERAPEUTICS, INC.
By: /s/ Xxxx X. Xxxxx, Ph.D.
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Its: President and C.E.O.
Address: 0000 Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
"SBVC"
SCHERING BERLIN VENTURE CORP.
By: /s/ Illegible
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Its: Treasurer
Address:
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"WELLCOME"
Subject to ATTACHMENT A hereto, THE WELLCOME TRUST
LIMITED, AS TRUSTEE OF THE WELLCOME TRUST
By: /s/ Xxxxx Xxxxx
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Xxx Xxxxx Xxxxx, Chairman
Address: 000 Xxxxxx Xxxx
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Xxxxxx XX00XX
---------------------------------
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Xxxxx X. Xxxxxxxx
/s/ Xxxxx Xxxxxxxx
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(Signature)
Address: 0 Xxxxxx Xxxxx
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Kingswood, Surrey KTLO 6QX
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[SIGNATURE PAGE TO CO-SALE AGREEMENT]
FOUNDERS:
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Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx
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(Signature)
Address: 0000 Xxxxxxxx Xx.
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Xxx Xxxxx, XX 00000
---------------------------------
/s/ Xxxx Xxxx
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Xxxx Xxxx
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(Signature)
Address: 0000 Xxxxx Xxxxxx Xxxxx
---------------------------------
Xxx Xxxxx, XX 00000
---------------------------------
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Xx. Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
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(Signature)
Address: 00000 Xxxxx Xxx Xxxxxx
---------------------------------
Xxx Xxx, XX 00000
---------------------------------
[SIGNATURE PAGE TO CO-SALE AGREEMENT]
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
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(Signature)
Address: 0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000-0000
/s/ H. Xxxx Xxxxxxx
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H. Xxxx Xxxxxxx
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(Signature)
Address: VAMC-San Diego
0000 Xx Xxxxx Xxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
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Xxxx Xxxxx
/s/ Xxxx X. Xxxxx, Ph.D.
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(Signature)
Address: Collateral Therapeutics
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
[SIGNATURE PAGE TO CO-SALE AGREEMENT]
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Xxxxxxxxxxx Xxxxxxxx
/s/ Xxxxxxxxxxx Xxxxxxxx
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(Signature)
Address: Collateral Therapeutics, Inc.
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
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Xxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxxxx
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(Signature)
Address: Ligand Pharmaceuticals
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
[SIGNATURE PAGE TO CO-SALE AGREEMENT]
SCHEDULE A
FOUNDERS
NAME
----
Xxxxx Xxxxxxx
Xxxx Xxxx
Xxxxxx Xxxxxx (and the Xxxxxx X. Xxxxxx Separate Property Trust)
Xxxxx Xxxx
H. Xxxx Xxxxxxx
Xxxx Xxxxx
Xxxxxxxxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
Schedule A-1
The Wellcome Trust Limited
as trustee of
the Wellcome Trust
ATTACHMENT A
TO
COLLATERAL THERAPEUTICS, INC.
AMENDED AND RESTATED CO-SALE AGREEMENT
With respect to its signatory capacity and liability, as trustee of the Trust,
the Trustee enters into and delivers this Amended and Restated Co-Sale Agreement
(the "Agreement") in its capacity as the trustee for the time being of The
Wellcome Trust but not otherwise and it is hereby agreed and declared that
notwithstanding anything to the contrary contained or implied in this Agreement
or any related agreement:
(a) the obligations incurred by the Trustee under or in consequence of this
Agreement or any related agreement shall be enforceable against it or the
other trustees of The Wellcome Trust from time to time; and
(b) the liabilities of the Trustee (or such other trustees as are referred to
in paragraph (a) above) in respect of such obligations shall be limited to
such liabilities as can, and may lawfully and properly, be met out of the
assets of The Wellcome Trust for the time being in the hands or under the
control of the Trustee or such other trustees.
Attachment A
CONSENT OF SPOUSE
I acknowledge that I have read the foregoing Agreement and that I know
its contents. I am aware that by its provisions if I and/or my spouse agree to
sell all or part of the shares of the Company held of record by either or both
of us, including my community interest in such shares, if any, co-sale rights
(as described in the Agreement) must be granted to the other Parties by the
seller. I hereby agree that those shares and my interest in them, if any, are
subject to the provisions of the Agreement and that I will take no action at any
time to hinder the operation of, or violate, the Agreement.
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(Signature)
