Novartis Pharma AG AND Momenta Pharmaceuticals, Inc. STOCK PURCHASE AGREEMENT
Exhibit
1
Novartis
Pharma AG
AND
Momenta
Pharmaceuticals, Inc.
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1.
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1
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2.
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1
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2.1
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1
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2.2
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2
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2.3
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2
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2.4
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2
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3.
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3
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3.1
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3
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3.2
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3
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3.3
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5
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3.4
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5
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3.5
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6
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3.6
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6
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3.7
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6
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3.8
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3.9
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3.10
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7
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3.11
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8
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3.12
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8
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3.13
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8
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3.14
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9
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3.15
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10
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3.16
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10
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3.17
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10
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3.18
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11
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3.19
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11
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3.20
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11
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3.21
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11
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3.22
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12
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3.23
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12
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3.24
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12
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3.25
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12
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4.
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12
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4.1
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12
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4.2
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13
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4.3
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4.4
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4.5
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4.6
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13
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4.7
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14
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5.
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14
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5.1
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14
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5.2
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14
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5.3
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14
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5.4
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14
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5.5
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14
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5.6
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14
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6.
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15
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6.1
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15
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6.2
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15
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6.3
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15
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6.4
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15
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7.
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15
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7.1
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15
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7.2
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15
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8.
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16
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8.1
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16
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8.2
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16
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9.
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16
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9.1
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16
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9.2
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16
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9.3
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16
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9.4
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17
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9.5
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17
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9.6
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17
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9.7
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17
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9.8
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18
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9.9
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18
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9.10
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19
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9.11
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19
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9.12
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19
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9.13
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19
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9.14
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20
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9.15
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20
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9.16
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20
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Exhibit
A - Form of Cross Receipt
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THIS
STOCK PURCHASE AGREEMENT (this “Agreement”)
is
made as of July 25, 2006, by and between Novartis Pharma AG (the “Investor”),
a
corporation organized under the laws of Switzerland, with its principal place
of
business at Xxxxxxxxxxx
00, XX 0000 Xxxxx BS,
and
Momenta Pharmaceuticals, Inc. (the “Company”),
a
Delaware corporation with its principal place of business at 000 Xxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000.
THE
PARTIES HEREBY AGREE AS FOLLOWS:
Subject
to the terms and conditions of this Agreement, at the Closing (as defined in
Section 2.1 below), the Company shall issue and sell to the Investor and the
Investor hereby irrevocably agrees to purchase from the Company 4,708,679
shares
(the “Shares”)
of
common stock, par value $0.0001 per share of the Company (the “Common
Stock”),
for
an aggregate purchase price (the “Aggregate
Purchase Price”)
equal
to $75,000,000; provided,
however,
that in
the event (a) of any stock dividend, stock split, combination of shares,
reclassification, recapitalization, exchange of shares or other similar change
in the capital structure of the Company after the date hereof and on or prior
to
the Closing which affects or relates to the Common Stock, the number of Shares
shall be adjusted proportionately or (b) any “Distribution Date” or “Stock
Acquisition Date” (as each such term is defined in the Shareholder Rights Plan)
occurs under the Shareholders Rights Plan at any time during the period from
the
date of this Agreement to the Closing Date, the Company and the Investor shall
make such adjustment to this Section 1 as the Company and the Investor shall
mutually agree so as to ensure that the Investor receives, in addition to the
Shares, the benefits received by any stockholder of the Company on the
“Distribution Date” or the “Stock Acquisition Date” (or benefits of an
equivalent economic value) under the Shareholder Rights Plan as a result of
the
consummation of the transactions contemplated hereby.
2.1 Closing
Date. The
closing of the purchase and sale of the Shares (the “Closing”)
shall
be held as soon as reasonably practicable (but in any event, no later than
the
second business day) after the day of satisfaction or valid waiver of the
conditions to the Closing set forth in Sections 5, 6 and 7 hereof (other than
those conditions that by their nature cannot be satisfied until the Closing
Date, but subject to the satisfaction or valid waiver of such conditions)
(provided,
that if
all the conditions set forth in Sections 5, 6 and 7 hereof shall not have been
satisfied or validly waived on such day, then the Closing shall take place
on
the first business day on which all such conditions shall have been or can
be
satisfied or shall have been validly waived) or such other date as the Company
and the Investor may agree upon at 10:00 a.m. at the offices of Xxxxxx Xxxxxx
Xxxxxxxxx Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000. The date of
the
Closing is hereinafter referred to as the “Closing
Date.”
2.2 Deliveries.
(a) Deliveries
by the Company.
At the
Closing, the Company shall deliver to the Investor the stock certificate(s),
registered in the Investor’s name or of such broker-dealers as may be designated
by the Investor as its nominee at least two business days prior to the Closing
Date, representing the Shares being purchased by the Investor at the Closing.
The Company will also make the following deliveries in connection with the
Closing: (i) a certificate of the Secretary or Assistant Secretary of the
Company, dated the Closing Date, certifying as to (A) the resolutions of the
Company’s Board of Directors authorizing the execution and delivery of this
Agreement, the Investor Rights Agreement, the MOU and the Collaboration and
License Agreement, the issuance of the Shares to the Investor, the execution
and
delivery of such other documents and instruments as may be required by this
Agreement, the Investor Rights Agreement, the MOU or the Collaboration and
License Agreement and the consummation of the transactions contemplated hereby
and thereby and certifying that such resolutions were duly adopted and have
not
been rescinded or amended or superceded as of such date, and (B) the name and
the signature of the officers of the Company authorized to sign, as appropriate,
this Agreement, the Investor Rights Agreement, the MOU, the Collaboration and
License Agreement and the other documents and certificates to be delivered
pursuant to this Agreement, the Investor Rights Agreement, the MOU or the
Collaboration and License Agreement by either the Company or any of its
officers; (ii) copies of (A) the Company’s Third Amended and Restated
Certificate of Incorporation (the “Amended
and Restated Certificate”),
certified by the Secretary of State of Delaware as of a date not earlier than
two (2) business days prior to the Closing Date and accompanied by a certificate
of the Secretary or Assistant Secretary of the Company, dated as of the Closing
Date, stating that no amendments have been made to the Amended and Restated
Certificate since such date, and (B) the Company’s Second Amended and Restated
By-laws (the “By-laws”),
certified by the Secretary or Assistant Secretary of the Company; (iii) a good
standing certificate dated as of a date not earlier than two (2) business days
prior to the Closing Date issued with respect to the Company by the Secretary
of
State of Delaware (which good standing shall be confirmed orally by such
Secretary of State as of the Closing); and (iv) a duly executed Cross Receipt
setting forth the Shares being purchased at the Closing and the Aggregate
Purchase Price, substantially in the form of Exhibit
A
attached
hereto.
(b) Deliveries
by the Investor.
At the
Closing, the Investor shall deliver the Aggregate Purchase Price by wire
transfer of same day funds per the Company’s wiring instructions (which shall
have been delivered to the Investor not less than two business days before
the
Closing Date). The Investor will also deliver a duly executed Cross Receipt
setting forth the Shares being purchased at the Closing and the Aggregate
Purchase Price, substantially in the form of Exhibit
A
attached
hereto.
2.3 Further
Assurances. The
Company and the Investor hereby covenant and agree without the necessity of
any
further consideration, to execute, acknowledge and deliver any and all such
other documents, obtain waivers and consents and take any such other action
and
corporate and other proceedings as may be reasonably necessary to carry out
the
intent and purposes of this Agreement and to provide to the other party copies
(executed or certified, as may be appropriate) of all documents which they
or
their counsel may reasonably have requested in connection with the transactions
contemplated by this Agreement.
2.4 Effects
of Closing.
All the
actions required to be performed at Closing shall be deemed to have occurred
simultaneously, and none of such actions shall be considered performed, until
and unless all such actions have been performed, or the requirement thereof
has
been validly waived by the relevant party. Closing shall not, in and of itself,
constitute a waiver by either party of any of its rights in relation to any
breach by the other party prior to Closing of any representation or warranty
or
any undertaking made by such other party in this Agreement.
The
Company hereby represents and warrants to the Investor that the statements
contained in this Section 3 are true and correct, except as expressly set forth
herein or in the disclosure schedule delivered by the Company to the Investor
dated as of the date of this Agreement (the “Disclosure
Schedule”):
3.1 Organization,
Good Standing and
Qualification. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has all requisite corporate
power and corporate authority to own and operate its properties and assets,
to
carry on its business as now conducted and as proposed to be conducted, to
enter
into this Agreement, the Investor Rights Agreement, the MOU and the
Collaboration and License Agreement, to sell the Shares and to carry out the
other transactions contemplated hereunder and thereunder. The Company is
qualified to transact business and is in good standing in each jurisdiction
in
which the failure to qualify could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect. For purposes of this Agreement,
the term "Material
Adverse Effect"
means a
material adverse effect on (i) the business, properties, tangible and intangible
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole or (ii) the Company's ability
to
consummate the transactions contemplated by this Agreement, the Investor Rights
Agreement or the MOU (if later executed, the Collaboration and License
Agreement); provided, however, that none of the following shall constitute,
or
shall be considered in determining whether there has occurred, a Material
Adverse Effect: (a) changes that are the result of general economic or political
factors affecting the national or world economy or acts of war or terrorism
in
each case, except to the extent the Company is, or could reasonably be expected
to be, materially and disproportionately affected; (b) changes that are the
result of factors generally affecting the industries or markets in which the
Company operates except to the extent the Company is, or could reasonably be
expected to be, materially and disproportionately affected; (c) any adverse
change, effect of circumstance arising out of the announcement of the
transactions contemplated by this Agreement; (d) any decline in the stock price
or trading volume of the Common Stock (but not the underlying reason for such
decline); (e) any action, proceeding, litigation or settlement that would,
directly or indirectly, materially affect the Company's U.S. enoxaparin program,
or the taking of any regulatory action by the United States Food and Drug
Administration or any other Governmental Authority that would, directly or
indirectly, materially affect the Company's U.S. enoxaparin program; and (f)
any
action taken at the request of the Investor. The
Company has made available to the Investor true, correct and complete copies
of
the Amended and Restated Certificate and the By-laws.
(a) As
of
July 21, 2006, the authorized capital of the Company consists of:
(i) Preferred
Stock. 5,000,000 shares of Preferred Stock, par value $0.01 per share (the
“Preferred
Stock”),
of
which 100,000 shares have been designated Series A Junior Participating
Preferred Stock (the “Series
A Preferred Stock”),
none
of which are issued and outstanding; and
(ii) Common
Stock. 100,000,000 shares of Common Stock, of which 31,171,140 shares
are issued and outstanding (including 630,000 shares of Common Stock subject
to
vesting or other forfeiture restrictions or repurchase conditions)
.
(b) Except
as
set forth in Section 3.2(a) or Section 3.2(c), as
of
July 21, 2006,
there
are not issued, reserved for issuance or outstanding, and since such
date
there
have been no issuances or deliveries by the Company or any of its Subsidiaries
(other than the issuance of shares of Common Stock pursuant to the exercise
of
Company Stock Options outstanding as of July
21,
2006,
in
accordance with their terms as in effect on July
21,
2006) of,
any
(i) shares of capital stock or other voting securities or equity interests
of
the Company, (ii)
options, warrants, rights (including conversion or preemptive rights,
stock
appreciation rights, “phantom” stock rights, performance units, rights to
receive shares of Common Stock on a deferred basis or other rights that are
linked to the value of Common Stock or the value of the Company or any of its
Subsidiaries or any part thereof granted under the Company Stock Plans or
otherwise),
convertible or exchangeable securities, commitments, contracts, agreements
or
undertakings, in each case, pursuant to which the Company or any of its
Subsidiaries is or may become obligated to (A) issue, deliver, sell or
repurchase, or cause to be issued, delivered, sold or repurchased, any shares
of
its capital stock or other voting securities or equity interests of, or any
security convertible or exercisable for or exchangeable into any capital stock
or other voting securities or equity interests of, the Company or any of its
Subsidiaries or (B) issue, grant, extend or enter into any such option, warrant,
right, convertible or exchangeable security, commitment, contract, agreement
or
undertaking; or (iii) bonds,
debentures, notes or other indebtedness of the Company having the right to
vote
(or convertible into, or exchangeable for, securities having the right to vote)
on any matters on which stockholders of the Company may vote issued, reserved
for issuance or outstanding. There
are
no restrictions on the transfer of capital stock of the Company imposed by
the
Amended and Restated Certificate, the By-laws, any agreement to which the
Company is a party, or any order of any court or any Governmental Authorities
to
which the Company is subject. There are no obligations of the Company or any
of
its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock, other voting securities or equity interests of the Company or
any
of its Subsidiaries.
(c) As
of
July 21, 2006,
4,566,268 shares of Common Stock were reserved and available for issuance
pursuant to the Company’s Amended and Restated 2002 Stock Incentive Plan, 2004
Stock Incentive Plan, as amended, and 2004
Employee Stock Purchase Plan
(the
“ESPP”)
(such
plans, collectively, the “Company
Stock Plans”),
of
which 2,523,927 shares of Common Stock were subject to outstanding options
to purchase shares of Common Stock from the Company pursuant to the Company
Stock Plans or otherwise (other than rights under the ESPP) (together with
any
other stock options granted after July 21, 2006, the “Company
Stock Options”).
Other
than as set forth in the preceding sentence, there are no other shares of Common
Stock reserved and available for issuance. There is no capital stock of the
Company held by the Company or any of its Subsidiaries. All of the Series A
Preferred Stock is reserved for issuance under the Shareholder Rights Plan
and
is the only Preferred Stock reserved or available for issuance.
(d) Except
as
reflected in the Company's audited financial statements as set forth in the
Company SEC Documents, the per share exercise price of each Company Stock Option
was not less than the fair market value of a share of Common Stock on the
applicable grant date.
(e) Except
as
set forth in the Company’s Public Filings, the Company’s Schedule 14A filed by
the Registrant on April 28, 2006 (as amended on May 5, 2006), and the Company’s
Schedule 14A filed by the Registrant on April 20, 2005 (in each case including
the exhibits thereto), the Company is not a party to or subject to any agreement
or understanding relating to, and to the Company’s knowledge there is no
agreement or understanding between any Persons which relates to, the voting
of
shares of capital stock of the Company or the giving of written consents by
a
stockholder or director of the Company.
3.3 Subsidiaries. Except
as
set forth in the Company’s Public Filings:
(a) The
Company does not presently own or control, directly or indirectly, any other
corporation, partnership, joint venture, association or other business entity.
Each Subsidiary is duly organized and existing under the laws of its
jurisdiction or organization, is in good standing under such laws and is duly
qualified to do business as a foreign corporation in each jurisdiction in which
a failure to so qualify would reasonably be expected to have, individually
or in
the aggregate, a Material Adverse Effect.
(b) All
the
outstanding shares of capital stock of each Subsidiary are validly issued,
fully
paid and nonassessable, and are owned by the Company free and clear of any
Encumbrances, other than restrictions under securities laws.
(c) There
are
no options, warrants, convertible securities, or other rights, agreement,
arrangements or commitments of any character relating to the capital stock
of
any Subsidiary.
(d) No
Subsidiary is a member of (nor is any part of its business conducted through)
any partnership, nor is it a participant in any joint venture or similar
arrangement.
(e) There
are
no voting trust, stockholder agreements, proxies or other agreements or
understandings in effect with respect to the voting or transfer of any shares
of
capital stock of or any other interests in any Subsidiary.
3.4 Authorization.
All
corporate action on the part of the Company necessary for the authorization,
execution and delivery of this Agreement, the Investor Rights Agreement, the
MOU
and the Collaboration and License Agreement, the performance of all obligations
of the Company hereunder and thereunder and the authorization, issuance and
delivery of the Shares to be sold hereunder, including the approval by the
Company’s Board of Directors, has been taken or will be taken prior to the
Closing. This Agreement, the Investor Rights Agreement and the MOU have been
duly executed and delivered by the Company and constitute, and upon execution
and delivery thereof, the Collaboration and License Agreement will constitute,
valid and legally binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws of general application relating to
or
affecting enforcement of creditors rights and subject to general equity
principles.
3.5 No
Conflict.
The
execution, delivery and performance of this Agreement, the Investor Rights
Agreement, the MOU and the Collaboration and License Agreement and compliance
with the provisions hereof and thereof by the Company, will not:
(a) violate
any provision of law, statute, ordinance, rule or regulation or any ruling,
writ, injunction, order, judgment or decree of any court, administrative agency
or other governmental body, the violation of which could reasonably be expected
to have, individually or in the aggregate, a Material Adverse
Effect;
(b) conflict
with or result in any breach of any of the terms, conditions or provisions
of,
or constitute (with due notice or lapse of time, or both) a default (or give
rise to any right of termination, cancellation or acceleration) under (i) any
agreement, document, instrument, contract, understanding, arrangement, note,
indenture, mortgage or lease to which the Company or any if its Subsidiaries
is
a party or under which the Company, any of its Subsidiaries or any of its or
their respective assets is bound or affected, except for any such conflicts,
breaches, defaults, terminations, cancellations or accelerations that could
not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, (ii) the Amended and Restated Certificate, (iii) the By-laws
or
(iv) the certificate of incorporation, by-laws or similar governing documents
of
any of the Company’s Subsidiaries; or
(c) result
in
the creation of any Encumbrance upon any of the Shares, other than restrictions
on resale pursuant to securities laws and the Investor Rights Agreement, or
on
any of the properties or assets of the Company or any Subsidiary.
3.6 Valid
Issuance of Common
Stock.
When
issued, sold and delivered in accordance with the terms hereof for the
consideration set forth herein, the Shares will be duly authorized, validly
issued, fully paid and nonassessable, and will not be subject to any
antidilution rights, rights of first refusal or other similar rights or
restrictions on transfer, other than under securities laws. No further approval
or authority of the stockholders or the Board of Directors of the Company will
be required for the consummation of the transactions contemplated by this
Agreement (including the issuance and sale of the Shares as contemplated by
this
Agreement).
3.7 Governmental
Consents.
Assuming
the accuracy of the Investor’s representations contained in Section 4 of this
Agreement, no consent, approval, license, permit, order or authorization of,
or
registration, qualification, designation, declaration, notification or filing
with, any federal, state, foreign or local Governmental Authority, any national
stock exchange or national quotation system on which the securities issued
by
the Company or any of its Subsidiaries are listed or quoted (including the
National Association of Securities Dealers or the NASDAQ Global Market), or
any
other person, on the part of the Company or any of its Subsidiaries, is required
in connection with the execution, delivery and performance of this Agreement,
the execution and delivery of the Investors Rights Agreement, the execution
and
delivery of the MOU, the offer, sale, or issuance of the Shares or the
consummation of any other transactions contemplated hereby or thereby, except
(i) the qualification (or the taking of such action as may be necessary to
secure an exemption from qualification) of the offer and sale of the Shares
under applicable Blue Sky laws, which filings and qualifications, if required,
shall be accomplished prior to the Closing, (ii) as may be required pursuant
to
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act, as amended (“HSR
Act”),
if
applicable, and (iii) a notice of (A) listing of additional shares with respect
to the Shares and (B) a change in the number of outstanding shares of the
Company, each to the NASDAQ Stock Market, Inc.
3.8 Litigation.
Except
as set forth in the Company’s Public Filings, there is no action, suit,
proceeding or investigation pending or, to the Company’s knowledge, currently
threatened against the Company or any Subsidiary which questions the validity
of
this Agreement, the Investor Rights Agreement or the MOU or the right of
the
Company to enter into such agreements, or to consummate the transactions
contemplated hereby or thereby, or which could reasonably be expected to
have,
individually or in the aggregate, a Material Adverse Effect.
3.9 Proprietary
Rights.
To the
Company’s knowledge, the Company owns or possesses the licenses or rights to use
all patents, patent applications, patent rights, inventions, know-how, trade
secrets, trademarks, trademark applications, service marks, service names and
trade names and all other intellectual property rights, whether registered
or
not, necessary to enable it to conduct its business as now operated (the
“Intellectual
Property”).
Except as set forth in the Company’s Public Filings, to the Company’s knowledge,
there are no material outstanding options, licenses or agreements relating
to
the Intellectual Property, nor is the Company bound by or a party to any
material options, licenses or agreements relating to the Intellectual Property
of any other person or entity. Except as disclosed in the Company’s Public
Filings, there is no claim or action or proceeding pending or, to the Company’s
knowledge, threatened that challenges the right of the Company with respect
to
any Intellectual Property. Except as set forth in the Company’s Public Filings,
to the Company’s knowledge, the Company’s Intellectual Property does not
infringe any Intellectual Property rights of any other person which, if the
subject of an unfavorable decision, ruling or finding could reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.
To
the
Company’s knowledge, confidential information relating to the Company, the
Subsidiaries and the underlying business of the Company and its Subsidiaries
has
been kept confidential and has not been disclosed to third parties except in
the
ordinary course of business and subject to written confidentiality obligations
from the third party which, to the Company’s knowledge, have not been breached.
To the Company’s knowledge, none of the operations of the Company and the
Subsidiaries involve the unauthorized use of confidential
information.
3.10 Agreements;
Action.
(a) Except
as
set forth in the Company’s Public Filings, since December 31, 2005, the Company
has not (i) declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its capital stock
or
other voting or equity securities of the Company, (ii) sold, exchanged or
otherwise disposed of any of its material assets or rights, other than in the
ordinary course of business, (iii) issued, sold, reclassified, combined or
split, or directly or indirectly purchased, redeemed or otherwise acquired,
any
capital stock or other voting or equity securities of the Company (other than
in
accordance with the Company Stock Plans), (iv) changed or amended the Restated
Certificate or the By-laws, (v) made any material change in the financial
accounting methods, principles or practices of the Company and its Subsidiaries
for financial accounting purposes, except as required by GAAP or applicable
law,
or (vii) committed or agreed to do any of the foregoing.
(b) Since
December 31, 2005, the Company has not admitted in writing its inability to
pay
its debts generally as they become due, filed or consented to the filing against
it of a petition in bankruptcy or a petition to take advantage of any insolvency
act, made an assignment for the benefit of creditors, consented to the
appointment of a receiver for itself or for the whole or any substantial part
of
its property, or had a petition in bankruptcy filed against it, been adjudicated
a bankrupt, or filed a petition or answer seeking reorganization or arrangement
under the federal bankruptcy laws or any other laws of the United States or
any
other jurisdiction.
(c) The
Company and its Subsidiaries are in compliance with all obligations, agreements
and conditions contained in any evidence of indebtedness or any loan agreement
to which the Company or any of its Subsidiaries is a party or is subject
(collectively, the “Obligations”),
the
lack of compliance with which would afford to any Person the right to (i)
accelerate any material indebtedness or (ii) terminate any right or agreement
of
the Company or any of its Subsidiaries, the termination of which could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. To the Company’s knowledge, all other parties to such
Obligations are in compliance with the terms and conditions of such Obligations,
except for any non-compliance that could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
3.11 Registration
Rights.
The
Company has not granted or agreed to grant any registration rights with respect
to shares of the Company’s capital stock or other voting or equity securities of
the Company under the Securities Act of 1933, as amended (the “Securities
Act”),
including piggyback rights, to any Person.
3.12 Title
to Property and
Assets.
Except
as provided in the Company’s Public Filings, the Company or one of its
Subsidiaries has good title to, a valid leasehold interest in, or a valid
license to use, all of the material tangible property and assets reflected
on
the Company’s balance sheet as of December 31, 2005, free and clear of all
material liens, claims, restrictions or Encumbrances, except those assets sold,
consumed or otherwise disposed of since the date of such balance sheet in the
ordinary course of business, none of which either alone or in the aggregate
are
material, either in nature or amount, to the business of the Company and its
Subsidiaries taken as a whole.
(a) The
Company has made available to the Investor (i) the Company’s audited financial
statements for the year ended December 31, 2005 contained in the Company’s
annual report on Form 10-K (the “Audited
Financial Statements”);
and
(ii) the Company’s unaudited financial statements for the quarter ended March
31, 2006 (collectively with the Audited Financial Statements, the “Financial
Statements”).
The
Financial Statements have been prepared in accordance with United States
generally accepted accounting principles (“GAAP”)
applied on a consistent basis throughout the periods indicated (except as may
be
indicated in notes or as permitted by Form 10-Q) and fairly present in all
material respects the financial condition and operating results of the Company
as of the dates, and for the periods, indicated therein (subject, in the case
of
unaudited statements, to normal year-end audit adjustments). Since December
31,
2005, the Company has conducted its business in the ordinary course, and there
has not been any event or events that have had or could, individually or in
the
aggregate, reasonably be expected to have a Material Adverse Effect. Except
as
disclosed in the Financial Statements, neither the Company nor any of its
Subsidiaries is a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation, or has any liabilities or obligations (whether
or
not accrued, absolute, contingent, liquidated or unliquidated, due or to become
due and whether or not required by GAAP to be set forth on the consolidated
balance sheet of the Company) that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(b) Since
June 25, 2004, the Company has timely filed all required reports, schedules,
forms, statements and other documents required to be filed by it with the
Securities and Exchange Commission (the “SEC”)
pursuant to the reporting requirements of the Securities Act or the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”)
(including exhibits and all other information incorporated therein) (the
“Company
SEC Documents”).
As of
their respective dates, the Company SEC Documents complied as to form in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Company SEC Documents and, as of their respective
dates, did not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in
Company SEC Documents complied as to form, as of their respective dates of
filing with the SEC, in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto. No Subsidiary of the Company is subject to the periodic reporting
requirements of the Exchange Act.
3.14 Employee
Benefit Plans.
(a) Section
3.14(a) of the Disclosure Schedule contains a true and complete list of each
Employee Benefit Plan and Employee Benefit Agreement as of the date of this
Agreement, provided that such lists shall not include any Employee Benefit
Plans
or Employee Benefit Agreements set forth in the Company’s Public Filings. The
Company has delivered or made available to the Investor true, complete and
correct copies of each Employee Benefit Plan and Employee Benefit Agreement
or,
in the case of any unwritten arrangement, a written summary thereof that is
complete and correct in all material respects.
(b) Except
as
provided in Section 3.14(b) of the Disclosure Schedule, (i) no Employee Benefit
Plan or Employee Benefit Agreement (A) is subject to Title IV of ERISA or
Section 412 of the Code, (B) provides for defined benefit pension benefits
or
nonqualified deferred compensation benefits, (C) provides any health or life
insurance benefits following termination of service or employment (other than
on
a self-pay basis or as required under Section 4980B(f) of the Code), (D)
entitles any Participant to a tax gross-up from the Company or any Subsidiary
or
(E) covers any Participant who resides or works outside the United States and
(ii) no Participant (A) has received any loan from the Company or any Subsidiary
that has an outstanding balance, or (B) is entitled to any payment, benefit
or
right (or any increased or accelerated payment, benefit or right), as a result
of (1) such Participant’s termination of employment with, or services to, the
Company or any Subsidiary or (2) the execution of this Agreement or the
consummation of the transactions contemplated by this Agreement.
3.15 Tax
Returns, Payments and Elections.
(a) The
Company has timely made or filed all federal, state and foreign income and
all
other tax returns, reports and declarations required by any jurisdiction to
which it is subject (all such returns being accurate and complete in all
material respects) and has timely paid all taxes and other governmental
assessments and charges required to be paid by the Company, except those being
contested in good faith in appropriate proceedings, and has set aside on its
books provisions adequate for the payment of all taxes for periods subsequent
to
the periods to which such returns, reports or declarations apply. To the
Company’s knowledge, there are no unpaid taxes claimed to be due by the taxing
authority of any jurisdiction. The Company has not executed a waiver with
respect to the statute of limitations relating to the assessment or collection
of any foreign, federal, state or local tax. None of the Company’s tax returns
is presently being audited by any taxing authority. There are no liens for
taxes
on any assets of the Company or its Subsidiaries except for liens with respect
to taxes not yet due and payable. Neither the Company nor any of its
Subsidiaries is party to or is bound by any tax sharing, allocation or
indemnification agreement or arrangement (other than such an agreement or
arrangement between the Company and its Subsidiaries).
(b) Neither
the Company nor any it its Subsidiaries has been a party to a transaction that,
as of the date of this Agreement, constitutes a "listed transaction" for
purposes of Section 6011 of the Internal Revenue Code of 1986, as amended,
and
applicable Treasury Regulations thereunder (or a similar provision of state
law). To the knowledge of the Company, it has disclosed to the Investor all
"reportable transactions" within the meaning of Treasury Regulations Section
1.6011-4(b) (or similar provision of state law) to which it or any of its
Subsidiaries has been a party.
3.16 Insurance.
The
Company is insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as management of the Company believes
to be prudent and customary in the businesses in which the Company is
engaged.
3.17 Labor
Agreements and Actions.
Neither
the Company nor any Subsidiary has any collective bargaining agreements covering
any of their respective employees, nor is the Company or any Subsidiary bound
by
or subject to (and none of their respective assets or properties is bound by
or
subject to) any written or oral, express or implied, contract, commitment or
arrangement with any labor union, and no labor union has requested or, to the
Company’s knowledge, has sought to represent any of the employees,
representatives or agents of the Company or any Subsidiary. There is no strike
or other labor dispute involving the Company, any Subsidiary or any of their
respective employees pending, or to the Company’s knowledge threatened, nor is
the Company aware of any labor organization activity involving its employees.
Each of the Company and its Subsidiaries is, and since January 1, 2003, has
been, in compliance with all applicable laws relating to employment and
employment practices, occupational safety and health standards, employee
classification, terms and conditions of employment, wages and hours and
immigration, and is not, and since January 1, 2003, has not, engaged in any
unfair labor practice, in each case except as could not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect. As of
the
date of this Agreement, no Key Employee has formally announced an intention
to
terminate his or her relationship as an employee or director of the Company
or
any Subsidiary and, to the Company’s knowledge, no Key Employee intends to
terminate his or her relationship as an employee or director of the Company
or
any Subsidiary, nor does the Company have a present intention to terminate
the
employment of any Key Employee. For purposes of this Agreement, the term
“Key
Employee”
shall
mean Xxx Xxxxxxxxxxxx and Xxxxxx Xxxxxxxxxxxx.
3.18 Offering.
None of
the Company, its Subsidiaries or their representatives has issued, sold or
offered any security of the Company to any person under circumstances that
would
cause the sale of the Shares, as contemplated by this Agreement, to be subject
to the registration requirements of the Securities Act. None of the Company,
its
Subsidiaries or their representatives will, from and including the date of
this
Agreement through and including the Closing Date, offer the Shares or any part
thereof or any similar securities for issuance or sale to, or solicit any offer
to acquire any of the same from, anyone so as to make the issuance and sale
of
the Shares subject to the registration requirements of the Securities Act.
Subject to the accuracy of the Investor’s representations set forth in Section 4
of this Agreement, the offer, sale and issuance of the Shares to be issued
in
conformity with the terms of this Agreement constitute transactions which are
exempt from the registration and prospectus delivery requirements of the
Securities Act and from all applicable state registration or qualification
requirements, other than those with which the Company has complied or will
comply with prior to the Closing.
3.19 Environmental
Matters.
Except
for any matters that could not reasonably be expected to have, individually
or
in the aggregate, a Material Adverse Effect, (i) the Company and its
Subsidiaries (a) are in compliance with all applicable foreign, federal, state
and local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants (“Environmental
Laws”),
(b)
have received all permits, licenses or other approvals required under applicable
Environmental Laws to conduct their respective businesses (c) are in compliance
with all terms and conditions of any such permits, licenses or approvals, and
(ii) to the Company’s knowledge, there are no facts, circumstances or conditions
that would reasonably be expected to result in any claim or liability against
the Company or any of its Subsidiaries under Environmental Law.
3.20 Licenses
and Other Rights; Compliance with
Laws.
The
Company has all franchises, permits, licenses and other rights and privileges
from Governmental Authorities necessary to conduct its business as presently
conducted and is in compliance in all material respects thereunder. The Company
and each Subsidiary are in compliance with all laws and governmental rules
and
regulations applicable to its business, properties and assets, including,
without limitation, all such rules, laws and regulations relating to fair
employment practices, occupational safety and health and public safety, except
for any non-compliance that could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
3.21 Broker
or Finders.
The
Company has not incurred, nor will incur, directly or indirectly, as a result
of
any action taken by the Company, any liability for brokerage or finders’ fees or
agents’ commissions or any similar charges in connection with this Agreement,
the Investor Rights Agreement, the MOU, the Collaboration and License Agreement
or any transaction contemplated hereby or thereby.
3.22 Market
Listing.
The
Common Stock is listed for trading on the NASDAQ Global Market and the Company
is in compliance in all material respects with the rules, regulations and
requirements of the NASDAQ Global Market relating to the continued listing
of
the Common Stock.
3.23 Related
Party
Transactions.
Except
as disclosed in the Company's SEC Documents, neither the Company nor any of
its
Subsidiaries has entered into any transaction that would be subject to
disclosure pursuant to Item 404 of Regulation S-K of the Securities
Act.
3.24 Takeover
Statues; Shareholders Rights
Plan.
The
approval of this Agreement by the Company’s Board of Directors referred to in
Section 3.4 constitutes approval of the acquisition of the Shares by the
Investor for purposes of Section 203 of the Delaware General Corporation Law.
Assuming the accuracy of Section 4.7, the Shareholder Rights Plan is not be
triggered by the offer, sale, issuance and purchase of the Shares.
3.25 Reliance.
The
Company understands that the foregoing representations and warranties and the
certificates to be delivered pursuant to Sections 5.1 and 5.2 shall be deemed
material and to have been relied upon by the Investor.
| 4. |
Representations
and Warranties of
the Investor.
|
The
Investor hereby represents and warrants to the Company that the statements
contained in Section 4 are true and correct as of the date hereof and as of
the
Closing Date:
4.1 Authorization,
Governmental Consents and
Compliance with Other Instruments.
All
corporate action on the part of the Investor necessary for the authorization,
execution and delivery of this Agreement and the Investors Rights Agreement
and
the performance of all obligations of the Investor hereunder and thereunder
has
been taken or will be taken prior to the Closing. This Agreement and the
Investors Rights Agreement have been duly executed and delivered by the Investor
and constitute valid and legally binding obligations of the Investor,
enforceable against the Investor in accordance with their respective terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other laws of
general application relating to or affecting enforcement
of creditors rights and subject to general equity principles. No consent,
approval, order or authorization of, or registration, qualification,
designation, declaration, notification or filing with, any federal, state or
local Governmental Authority on the part of the Investor is required in
connection with the consummation of the transactions contemplated by this
Agreement and the Investors Rights Agreement, except as may be required by
the
HSR Act. The execution, delivery and performance of this Agreement and the
Investors Rights Agreement and compliance with the provisions hereof and thereof
by the Investor, will not (a) violate any provision of law, statute, ordinance,
rule or regulation or any ruling, writ, injunction, order, judgment or decree
of
any court, administrative agency or other governmental body or (b) conflict
with
or result in any breach of any of the terms, conditions or provisions of, or
constitute (with due notice or lapse of time, or both) a default (or give rise
to any right of termination, cancellation or acceleration) under any agreement,
document, instrument, contract, understanding, arrangement, note, indenture,
mortgage or lease to which the Investor is a party or under which the Investor
or any of its assets is bound or affected, except for any violations, conflicts,
breaches or defaults which would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the ability
of
the Investor to consummate the transactions contemplated by this
Agreement.
4.2 Purchase
Entirely for Own
Account.
The
Investor is acquiring the Shares for investment for the Investor’s own account,
not as a nominee or agent, and not with a view to the resale or distribution
of
any part thereof, and the Investor has no present intention of selling, granting
any participation, or otherwise distributing the Shares. The Investor does
not
own of record or beneficially own (as defined in Rule 13d-3 of the Exchange
Act)
any voting securities of the Company, or any securities convertible into or
exercisable for any such voting securities.
4.3 Disclosure
of Information.
The
Investor acknowledges that the Company has made available to the Investor copies
of the Company SEC Documents filed prior to the date of this Agreement and
that
the Investor has had an opportunity to ask questions of, and receive answers
from, the Company regarding the terms and conditions of the offering of the
Shares. The foregoing, however, does not limit or modify the representations
and
warranties of the Company in Section 3 of this Agreement.
4.4 Investment
Experience and Accredited Investor
Status. The
Investor either (i) is an accredited investor (as defined in Regulation D
promulgated under the Securities Act) or (ii) is not a United States Person
as
that term is defined in Regulation S of the Securities Act and is not acquiring
the Shares for the account or benefit of any United States Person. The Investor
is an investor in securities of companies in development stage and acknowledges
that it is able to fend for itself, and bear the economic risk of its investment
and has such knowledge and experience in financial or business matters that
it
is capable of evaluating the merits and risks of the investment in the Shares
hereunder.
4.5 Restricted
Securities. The
Investor understands that the Shares, when issued, will be restricted securities
under the federal securities laws inasmuch as they are being acquired from
the
Company in a transaction not involving a public offering and that under such
laws and applicable regulations such securities may be resold without
registration under the Securities Act only in certain limited circumstances.
In
this connection, the Investor represents that it is familiar with Rule 144,
as
presently in effect, and understands the resale limitations imposed thereby
and
by the Securities Act.
4.6 Legends.
The
Investor understands and agrees that each certificate or other document
evidencing any of the Shares shall be endorsed with the legend in substantially
the form set forth below, as well as any other legends required by applicable
law. The Investor covenants that the Investor shall not transfer the Shares
represented by any such certificate without complying with the restrictions
on
transfer described in the legends endorsed on such certificates. It is
understood that the certificates evidencing the Shares will bear the following
legend until such legend is removed in accordance with Section 8.2:
“These
securities have not been registered under the Securities Act of 1933, as
amended. They may not be sold, offered for sale, pledged, hypothecated or
otherwise transferred in the absence of a registration statement in effect
with
respect to the securities under such Act or pursuant to an applicable exemption
from the registration requirements of such Act.”
4.7 Acquiring
Person.
Investor, including its affiliates, after giving effect to the transactions
contemplated hereby, will not, either individually or with a group (as defined
in Section 13(d)(3) of the Exchange Act), be the beneficial owner of 16.5%
or
more of the Company’s outstanding Common Stock. For purposes of this Section
4.7, beneficial ownership shall be determined pursuant to a Rule 13d-3 under
the
Exchange Act.
| 5. |
Conditions
to Closing of
Investor.
|
The
Investor’s obligation to purchase the Shares at the Closing is subject to the
fulfillment as of such Closing of the following conditions (unless waived in
writing by the Investor):
5.1 Representations
and Warranties
Correct.
The
representations and warranties made by the Company in Section 3 hereof shall
be
true and correct, without regard to any materiality or Material Adverse Effect
qualifiers contained therein, as of the date of this Agreement and as of the
Closing Date as though made on and as of such Closing Date (except (i) to the
extent such representations and warranties are specifically made as of a
particular date, in which case such representations and warranties shall be
true
and correct, without regard to any materiality or Material Adverse Effect
qualifiers contained therein, as of such date, and (ii) where the failure to
be
true and correct, individually or in the aggregate, has not had and could not
reasonably be expected to have a Material Adverse Effect), and the Company
shall
have delivered to the Investor a certificate, dated as of the Closing Date,
executed by the President and Chief Executive Officer of the Company, certifying
to the foregoing.
5.2 Covenants.
All
covenants, agreements and conditions contained in this Agreement to be performed
by the Company on or prior to the Closing Date shall have been performed or
complied with in all material respects, and the Company shall have delivered
to
the Investor a certificate, dated as of the Closing Date, executed by the
President and Chief Executive Officer of the Company, certifying to the
foregoing.
5.3 No
Material Adverse Effect.
There
shall not have occurred any event or events that have had or could, individually
or in the aggregate, reasonably be expected to have, a Material Adverse
Effect.
5.4 Collaboration
and License Agreement.
The
MOU,
or if later entered into the Collaboration and License Agreement, shall be
in
full force and effect.
5.5 Investor
Rights Agreement. The
Investor Rights Agreement shall be in full force and effect.
5.6 Market
Listing. On
the
Closing Date, the Shares to be delivered at that Closing shall be approved
for
listing on the NASDAQ Global Market.
The
Company’s obligation to sell the applicable Shares at the Closing is subject to
the fulfillment as of such Closing of the following conditions (unless waived
in
writing by the Company):
6.1 Representations
and Warranties Correct.
The
representations and warranties made by the Investor in Section 4 hereof shall
be
true and correct as of the date of this Agreement and as of the Closing Date
as
though made on and as of such Closing Date (except (i) to the extent such
representations and warranties are specifically made as of a particular date,
in
which case such representations and warranties shall be true and correct as
of
such date, and (ii) where the failure to be true and correct, individually
or in
the aggregate, has not had and could not reasonably be expected to have a
material adverse effect on the ability of the Investor to consummate the
transactions contemplated by this Agreement).
6.2 Covenants.
All
covenants, agreements and conditions contained in this Agreement to be performed
by the Investor on or prior to the Closing Date shall have been performed or
complied with in all material respects.
6.3 Collaboration
and License
Agreement.
The MOU,
or if later entered into the Collaboration and License Agreement, shall be
in
full force and effect.
6.4 Investor
Rights Agreement.
The
Investor Rights Agreement shall be in full force and effect.
The
obligations of each of the Investor and the Company to consummate the Closing
is
subject to the fulfillment as of the Closing Date of the following
conditions:
7.1 HSR
Act and Other Qualifications.
The
filings required under the HSR Act shall have been made and the required waiting
period shall have elapsed as of the Closing Date, and all other authorizations,
consents, waivers, permits, approvals, qualifications and registrations to
be
obtained or effected with any Governmental Authority, including, without
limitation, necessary Blue Sky law permits and qualifications required by any
state, for the offer and sale to the Investor of the Shares shall have been
duly
obtained and effective as of the Closing Date.
7.2 Absence
of Litigation. There
shall be no law or injunction, action, suit, proceeding or investigation pending
or currently threatened in writing against the Company or the Investor which
questions the validity of this Agreement, the Investor Rights Agreement, the
MOU
(or, if later entered into, the Collaboration and License Agreement) or the
right of the Company or the Investor to enter into this Agreement, the Investor
Rights Agreement or the MOU (or, if entered into, the Collaboration and License
Agreement) or to consummate the transactions contemplated hereby or thereby
or
which prohibits or restrains the consummation of the transactions contemplated
hereby or thereby.
8.1 Market
Listing. The
Company shall use commercially reasonable efforts to maintain the listing and
trading of the Common Stock on the NASDAQ Global Market. The Company shall
use
its best efforts to effect the listing of the Shares on the NASDAQ Global
Market, including submitting a notice of listing of additional shares with
respect to the Shares to the NASDAQ Stock Market, Inc. no later than 15 calendar
days prior to the Closing Date.
8.2 Share
Legend Removal. The
legend set forth in Section 4.6 hereof shall be removed from the certificate(s)
evidencing the Shares and the Company shall, or shall cause its transfer agent
to, issue, no later than five business days from receipt of a request from
the
Investor pursuant to this Section 8.2, a certificate or certificates evidencing
all or a portion of the Shares, as requested by the Investor, without such
legend if (i) such securities have been resold under an effective registration
statement under the Securities Act, (ii) such securities have been or will
be
transferred in compliance with Rule 144 under the Securities Act, (iii) such
securities are eligible for resale pursuant to Rule 144(k) under the Securities
Act or (iv) the Investor shall have provided the Company with an opinion of
counsel, reasonably satisfactory to the Company, stating that such securities
may lawfully be transferred without registration under the Securities
Act.
| 9. |
9.1 Survival
of Warranties. The
representations and warranties of the Company contained in Sections 3.1, 3.2,
3.4, 3.5, 3.6 and 3.18 and of the Investor contained in this Agreement shall
survive the Closing without limitation as to time and the other representations
and warranties of the Company made herein and in the certificates delivered
pursuant hereto shall survive for eighteen months following the Closing. The
covenants and undertakings set forth in Sections 8.1 and 8.2 of this Agreement
contemplating performance by any party following the Closing shall survive
in
accordance with their respective terms.
9.2 Remedies.
The
rights, powers and remedies of the parties under this Agreement are cumulative
and not exclusive of any other right, power or remedy which such parties may
have under any other agreement or law. No single or partial assertion or
exercise of any right, power or remedy of a party hereunder shall preclude
any
other or further assertion or exercise thereof.
9.3 Successors
and Assigns. Except
as
otherwise expressly provided herein, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors
and
assigns of the parties, including, without limitation, successors through
merger, consolidation, reorganization, recapitalization, any similar transaction
or otherwise. Neither this Agreement nor any rights or duties of a party hereto
may be assigned by such party, in whole or in part, without the prior written
consent of the other party hereto; provided that the Investor may assign, in
its
sole discretion, any of or all their rights, interests and obligations under
this Agreement to any affiliate of the Investor that would not reasonably be
expected to cause any delay in the satisfaction of the condition set forth
in
Section 7.1. Any attempted assignment in violation of this Section 9.3 shall
be
void.
9.4 Entire
Agreement. This
Agreement and the other writings referred to herein or delivered pursuant hereto
which form a part hereof contain the entire agreement among the parties with
respect to the subject matter hereof and thereof and supersede all prior and
contemporaneous arrangements or understandings, whether written or oral, with
respect thereto. This Agreement is for the sole benefit of the parties hereto
and their permitted assigns and nothing herein expressed or implied shall give
or be construed to give to any person, other than the parties hereto and such
assigns, any legal rights or equitable rights hereunder.
9.5 Governing
Law, Consent to Jurisdiction and Waiver of
Trial by Jury.
(a) This
Agreement shall be governed by and construed under the laws of the State of
New
York (without regard to the conflict of law principles thereof). Each of the
parties hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the exclusive jurisdiction of the Federal and state courts
of
the State of New York in any action or proceeding arising out of or relating
to
this Agreement or the agreements delivered in connection herewith or the
transactions contemplated hereby or thereby or for recognition or enforcement
of
any judgment relating thereto, and each of the parties hereby irrevocably and
unconditionally (i) agrees not to commence any such action or proceeding except
in such courts, (ii) agrees that any claim in respect of any such action or
proceeding may be heard and determined in such courts, (iii) waives, to the
fullest extent it may legally and effectively do so, any objection which it
may
now or hereafter have to the laying of venue of any such action or proceeding
in
such courts, and (iv) waives, to the fullest extent permitted by laws, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in such courts. Each of the parties hereto agrees that a final judgment in
any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by laws.
Each party to this Agreement irrevocably consents to service of process in
the
manner provided for notices in Section 9.9. Nothing in this Agreement shall
affect the right of any party to this Agreement to serve process in any other
manner permitted by laws.
(b) EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT MAY INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY
IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH
OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (I) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
SUCH
WAIVERS, (II) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (III) IT HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.5.
9.6 Counterparts.
This
Agreement may be executed in any number of counterparts, each such counterpart
shall be deemed to be an original instrument, and all such counterparts together
shall constitute but one agreement. Any such counterpart may contain one or
more
signature pages. This Agreement may be executed by facsimile signature
pages.
9.7 Titles
and Subtitles. The
titles and subtitles used in this Agreement are used for convenience only
and
are not to be considered in construing or interpreting this
Agreement.
9.8 Terms
Generally. Whenever
the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
names and pronouns shall include the plural and vice-versa. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”, unless the context expressly provides otherwise. All references
herein to Sections, paragraphs, subparagraphs, clauses, Exhibits or Schedules
shall be deemed references to Sections, paragraphs, subparagraphs or clauses
of,
or Exhibits or Schedules to this Agreement, unless the context requires
otherwise. Unless otherwise expressly defined, terms defined in this Agreement
have the same meanings when used in any Exhibit or Schedule hereto, including
the Disclosure Schedule. Unless otherwise specified, the words “herein”,
“hereof”, “hereto” and “hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular provision of this Agreement.
The term “or” is not exclusive. The word “extent” in the phrase “to the extent”
shall mean the degree to which a subject or other thing extends, and such phrase
shall not mean simply “if”. The phrase “date hereof” or “date of this Agreement”
shall be deemed to refer to July 25, 2006. Any contract, instrument or law
defined or referred to herein or in any contract or instrument that is referred
to herein means such contract, instrument or law as from time to time amended,
modified or supplemented, including (in the case of contracts or instruments)
by
waiver or consent and (in the case of laws) by succession of comparable
successor laws and references to all attachments thereto and instruments
incorporated therein. References to a person are also to its permitted
successors and assigns.
9.9 Notices.
Unless
otherwise provided, all notices, requests, consents and other communications
hereunder to any party shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified or five business days
after being duly sent by first class registered or certified mail, or other
courier service, postage prepaid, or the following business day after being
faxed with a confirmation copy by regular mail, and addressed or faxed to the
party to be notified at the address or fax number indicated for such party,
as
the case may be, set forth below or such other address or fax number, as the
case may be, as may hereafter be designated in writing by the addressees to
the
addressor listing all parties:
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To
the Company:
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||
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000
Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxxxxxxxx 00000
Attention: Chief
Executive Officer
Fax: (000)
000-0000
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With
a copy (which shall not constitute notice) to:
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Xxxxxx
Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
00
Xxxxx Xxxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
Xxxxxx X. Xxxxxx, Esq.
Fax: (000)
000-0000
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To
the Investor:
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Novartis
Pharma AG
Xxxxxxxxxxx
00
XX
0000 Xxxxx BS
Attention
Xxxxx Xxxxxxxxx
Fax:
x00
00 0000000
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With
a copy (which shall not constitute notice) to:
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Cravath,
Swaine & Xxxxx LLP
Worldwide
Plaza
000
Xxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
Attention: Xxxxxx
X. Xxxxxxx, Esq.
Fax: (212)
000- 0000
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9.10 Finder’s
Fee.
The
Investor agrees to indemnify and to hold harmless the Company from any liability
for any commission or compensation in the nature of a finder’s fee (and the
reasonable costs and expenses of defending against such liability or asserted
liability) for which the Investor or any of its officers, partners, employees,
or representatives is responsible. The Company agrees to indemnify and hold
harmless the Investor from any liability for any commission or compensation
in
the nature of a finder’s fee (and the reasonable costs and expenses of defending
against such liability or asserted liability) for which the Company or any
of
its officers, employees or representatives is responsible.
9.11 Expenses.
Except
as
otherwise contemplated herein, each party shall pay its own fees and expenses
with respect to this Agreement.
9.12 Amendments
and Waivers. Any
term
of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Investor (other than the waiver of any condition set forth in Section
5,
which may be waived in the sole discretion of the Investor, and other than
the
waiver of any condition set forth in Section 6, which may be waived in the
sole
discretion of the Company).
9.13 Severability.
If
one or
more provisions of this Agreement are held to be unenforceable under applicable
law, in any jurisdiction, such provision shall be ineffective, as to such
jurisdiction, and the balance of the Agreement shall be interpreted as if such
provision were so excluded, without invalidating the remaining provisions of
this Agreement and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
9.14 Confidentiality
and Publicity.
The
Company and the Investor will mutually agree upon the form and substance of
any
press release relating to the terms of this Agreement, the MOU, the
Collaboration and License Agreement, the Investor Rights Agreement or the
transactions contemplated hereby or thereby prior to issuing any such press
release, including any press release to be issued promptly after the execution
hereof. Either party may only disclose the terms of the MOU or the Collaboration
and License Agreement if such party reasonably determines, based on advice
from
its counsel, that it is required to make such disclosure by applicable law,
regulation or legal process (whether in connection with its ongoing disclosure
obligations, in connection with a corporate activity or otherwise), including
without limitation by the rules or regulations of the SEC or similar regulatory
agency in a country other than the United States or of any stock exchange or
NASDAQ, in which event such party shall provide prior notice of such intended
disclosure to the other party sufficiently in advance to enable the other party
to seek confidential treatment or other protection for such information unless
the disclosing party is prevented by law or regulation from providing such
advance notice and shall disclose only such terms of the MOU or the
Collaboration and License Agreement as such disclosing party reasonably
determines, based on advice from its counsel, are required by applicable law,
regulation or legal process to be disclosed (whether in connection with its
ongoing disclosure obligations, in connection with a corporate activity or
otherwise). In the event that either party determines that it must publicly
file
the MOU or the Collaboration and License Agreement with the SEC such party
shall
(i) initially file a redacted copy of the MOU or the Collaboration and License
Agreement, as applicable, (ii) request, and use commercially reasonable efforts
to obtain, confidential treatment of all terms redacted from such redacted
MOU
or Collaboration and License Agreement, provided that the redaction of such
terms is permitted by the applicable rules and regulations of the SEC, (iii)
permit the other party to review and approve such initial request for
confidential treatment and any subsequent correspondence with respect thereto
at
least five (5) business days prior to its submission to the SEC and (iv)
promptly deliver to the other party any written correspondence received by
it or
its representatives from the SEC with respect to such confidential treatment
request and promptly advise the other party of any other material communications
between it or its representatives with SEC with respect to such confidential
treatment request.
9.15 Disclosure
Schedule. The
Disclosure Schedule shall be arranged in Subsections corresponding to the
numbered Subsections contained in Section 3, and the disclosure in any
Subsection of the Disclosure Schedule shall qualify the corresponding Subsection
in Section 3. The inclusion of any information in the Disclosure Schedule shall
not be deemed to be an admission or acknowledgment, in and of itself, that
such
information is required by the terms hereof to be disclosed, is material, has
resulted in or would result in a Material Adverse Effect, or is outside the
ordinary course of business.
9.16 Definitions.
As
used
in this Agreement, the following terms shall have the following
meanings:
“Agreement”
shall
have the meaning set forth in the Preamble.
“Aggregate
Purchase Price”
shall
have the meaning set forth in Section 1.
“Amended
and Restated Certificate”
shall
have the meaning set forth in Section 2.2(a).
“Audited
Financial Statements”
shall
have the meaning set forth in Section 3.13(a).
“business
day”
means
any day other than the days on which banks in New York, New York or Basel,
Switzerland are required or authorized to close.
“By-laws”
shall
have the meaning set forth in Section 2.2(a).
“Code”
shall
mean the Internal Revenue Code of 1986, as amended.
“Closing”
shall
have the meaning set forth in Section 2.1.
“Closing
Date”
shall
have the meaning set forth in Section 2.1.
“Collaboration
and License Agreement”
shall
mean that certain Collaboration and License Agreement to be entered into between
the Company and the Investor contemplated by the MOU.
“Common
Stock”
shall
have the meaning set forth in Section 1.
“Company”
shall
have the meaning set forth in the Preamble.
“Company’s
Public Filings”
shall
mean the Company's Annual Report on Form 10-K for the year ended December 31,
2005 and the Company’s Quarterly Report on Form 10-Q for the period ended March
31, 2006.
“Company
SEC Documents”
shall
have the meaning set forth in Section 3.13(b).
"Company
Stock Options"
shall
have the meaning set forth in Section 3.2(c).
"Company
Stock Plans"
shall
have the meaning set forth in Section 3.2(c).
“Cross
Receipt”
shall
mean an executed document signed by each of the Company and the Investor setting
forth the Shares being purchased at the Closing and the Aggregate Purchase
Price.
“Disclosure
Schedule”
shall
have the meaning set forth in Section 3.
“Employee
Benefit Agreement”
shall
mean (a) each employment, deferred compensation, severance, termination, change
in control, employee benefit, loan, indemnification, retention, stock
repurchase, stock option or similar agreement, commitment or obligation between
the Company or any Subsidiary, on the one hand, and any Participant, on the
other hand, (b) each agreement between the Company or any Subsidiary, on the
one
hand, and any Participant, on the other hand, the benefits of which are
contingent, or the terms of which are materially altered, upon the occurrence
of
a transaction involving the Company of the nature contemplated by this Agreement
and (c) any trust or insurance contract or other agreement to fund or otherwise
secure payment of any compensation or benefit to be provided to any
Participant.
“Employee
Benefit Plan”
shall
mean each “employee benefit plan”, as defined in ERISA, and each other plan,
arrangement or policy (written or oral and whether or not terminable at will)
relating to equity-based compensation, incentive compensation, deferred
compensation, severance, fringe benefits, perquisites or other employee
benefits, in each case maintained or contributed to, or required to be
maintained or contributed to, by the Company, any Subsidiary or Common
Controlled Entity, for the benefit of any Participant.
“Encumbrance(s)”
shall
mean any security interest, pledge, mortgage, lien (including, without
limitation, environmental and tax liens), charge, encumbrance, adverse claim,
or
restriction of any kind, including, without limitation, any restriction on
the
use, voting, transfer, receipt of income or other exercise of any attributes
of
ownership.
“Environmental
Laws”
shall
have the meaning set forth in Section 3.19.
“ERISA”
shall
mean the Employee Retirement Income Security Act of 1974, as
amended.
"ESPP"
shall
have the meaning set forth in Section 3.2(c).
“Exchange
Act”
shall
have the meaning set forth in Section 3.13(b).
“Financial
Statements”
shall
have the meaning set forth in Section 3.13(a).
“GAAP”
shall
have the meaning set forth in Section 3.13(a).
“Governmental
Authority”
shall
mean any nation or government, any federal, state, foreign, municipal, local,
provincial, regional or other political subdivision thereof, and any Person
exercising executive, legislative, judicial regulatory or administrative
functions of or pertaining to government.
“HSR
Act”
shall
have the meaning set forth in Section 3.7.
“Intellectual
Property”
shall
have the meaning set forth in Section 3.9.
“Investor”
shall
have the meaning set forth in the Preamble.
“Investor
Rights Agreement”
shall
mean that certain Investor Rights Agreement between the Company and the Investor
dated as of the date hereof.
“Key
Employee”
shall
have the meaning set forth in Section 3.17.
“Material
Adverse Effect”
shall
have the meaning set forth in Section 3.1.
"MOU"
shall
mean the memorandum of understanding among the Company and the Investor (or
an
affiliate of the Investor) dated the date hereof.
“Obligations”
shall
have the meaning set forth in Section 3.10(c).
“Participant”
shall
mean any present officers, employees or directors of the Company or any
Subsidiary.
“Person”
means
any individual, partnership, firm, corporation, association, trust,
unincorporated organization, government or any department or agency thereof
or
other entity, as well as any syndicate or group that would be deemed to be
a
Person under Section 13(d)(3) of the Securities Exchange Act.
“Preferred
Stock”
shall
have the meaning set forth in Section 3.2(a)(i).
“SEC”
shall
have the meaning set forth in Section 3.13(b).
“Securities
Act”
shall
have the meaning set forth in Section 3.11.
“Series
A Preferred Stock”
shall
have the meaning set forth in Section 3.2(a)(i).
“Shares”
shall
have the meaning set forth in Section 1.
“Shareholder
Rights Plan”
shall
mean the rights agreement between the Company and American Stock Transfer &
Trust Company, as rights agent, dated as of November 7, 2005.
“Subsidiary”
shall
mean any and all corporations, partnerships, joint ventures, associations and
other entities controlled by the Company directly or indirectly through one
or
more intermediaries, including, without limitation, Momenta Pharmaceuticals
Securities Corporation.
(Signature
Page Follows)
IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement as
of
the date first above written.
|
NOVARTIS
PHARMA AG,
|
|
|
By
|
/s/ Xxxxx Xxxxxxxxx |
|
Title:
Authorized Signatory
|
|
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MOMENTA
PHARMACEUTICALS, INC.
|
|
|
By
|
/s/ Xxxx Xxxxx |
|
Name:
Xxxx Xxxxx
Title:
President and CEO
|
|
[Signature
Page to Stock Purchase Agreement]
[
, 2006]
CROSS
RECEIPT
Reference
is made to the Stock Purchase Agreement, dated as of July 25, 2006 (the
"Agreement"),
by
and between Novartis Pharma AG, a company organized under the laws of
Switzerland (the "Investor"),
and
Momenta
Pharmaceuticals, Inc.,
a
company incorporated under the laws of Delaware (the "Company").
The
Investor hereby acknowledges its receipt from the Company of 4,708,679 shares
(the "Shares")
of
common stock of the Company, par value $0.0001 per share (the "Common
Stock"),
pursuant to Section 2.2(a) of the Agreement.
The
Company hereby acknowledges the receipt from the Investor of $75,000,000 by
wire
transfer to the account specified by the Company pursuant to Section 2.2(b)
of
the Agreement.
This
cross receipt may be executed in one or more counterparts, each of which shall
be deemed an original, and all of which shall constitute one and the same cross
receipt.
[Signatures
on the Following Page]
IN
WITNESS WHEREOF, the Investor and the Company have each caused this
cross-receipt to be signed on the date written above.
|
NOVARTIS
PHARMA AG,
|
|
|
By
|
|
|
Name:Xxxxx
Xxxxxxxxx
Title:
Authorized Signatory
|
|
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MOMENTA
PHARMACEUTICALS, INC.
|
|
|
By
|
|
|
Name:
Title:
|
|
