Exhibit 10.27
CUBIST PHARMACEUTICALS, INC.
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT is dated as of the 18th day of July, 1997
by and between CUBIST PHARMACEUTICALS, INC., a Delaware corporation with its
principal office at 00 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the
"Company"), and the several purchasers named in the attached Exhibit A
(individually, a "Purchaser" and collectively, the "Purchasers").
WHEREAS, the Company desires to issue and sell to the Purchasers, and the
Purchasers, severally, desire to purchase from the Company, shares of the
authorized but unissued shares of common stock, $.001 par value per share, of
the Company (the "Common Stock"), all upon the terms and subject to the
conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual agreements, representations,
warranties and covenants herein contained, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:
(a) "Affiliate" of a party means any corporation or other business entity
controlled by, controlling or under common control with such party. For this
purpose "control" shall mean direct or indirect beneficial ownership of fifty
percent (50%) or more of the voting or income interest in such corporation or
other business entity.
(b) "Closing Date" means the date of the Closing.
(c) "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and all of the rules and regulations promulgated thereunder.
(d) "IBT" means International Biotechnology Trust plc, a corporation
organized under the laws of the United Kingdom.
(e) "Intangible Rights" means (i) patents, trademarks, trade names,
service marks and copyrights, trademark, trade name, service xxxx and copyright
registrations, logotypes, all applications pending on the date hereof by or
before any governmental body with respect to any of the foregoing and (ii) all
licenses or other contracts or agreements granted by or to the Company or to
which the Company is a party that relate, in whole or in part, to any of the
items referred to in clause (i) above.
(f) "Purchase Price" means $6.125 per Share (subject to proportionate
adjustment upon the occurrence of any stock split, stock dividend or reverse
stock split that is consummated or becomes effective during the period
commencing after the date hereof and ending immediately prior to the Closing).
(g) "Registration Rights Agreement" shall mean that certain Registration
Rights Agreement, substantially in the form of Exhibit B attached hereto, to be
entered into by the Company and the Purchasers at the Closing.
(h) "Regulation S" shall mean Regulation S promulgated under the
Securities Act, as such Regulation may be amended and in effect from time to
time.
(i) "Regulation S Shares" shall mean any Shares sold or issued by the
Company in reliance on Regulation S, which reliance and the need therefor shall
be determined by the Corporation in its absolute discretion at the time of such
sale or issuance and shall be conclusively evidenced by affixing the legends
required by Section 7.2(a) hereof.
(j) "Majority Purchasers" shall mean those Purchasers which have the
right, pursuant to this Agreement, to purchase more than fifty percent (50%) of
the Shares.
(k) "SEC" shall mean the Securities and Exchange Commission.
(l) "Securities Act" shall mean the Securities Act of 1933, as amended,
and all of the rules and regulations promulgated thereunder.
(m) "Shares" shall mean (i) in the case of any Purchaser, the shares of
Common Stock to be purchased by such Purchaser, at the Closing, pursuant to
Section 2.1 of this Agreement and (ii) in the case of all of the Purchasers as a
group, the aggregate number of shares of Common Stock to be purchased by all of
the Purchasers, at the Closing, pursuant to Section 2.1 of this Agreement.
2. Purchase and Sale of Shares.
2.1 Purchase and Sale. Subject to and upon the terms and conditions set
forth in this Agreement, the Company agrees to issue and sell to each Purchaser,
and each Purchaser, severally, hereby agrees to purchase from the Company, at
the Closing, that number of shares of Common Stock equal to the quotient
obtained by dividing (i) the dollar amount set forth opposite the name of such
Purchaser under the heading "Total Amount of Investment" on Exhibit A
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hereto by (ii) the Purchase Price. The purchase price payable by each
Purchaser for each of the shares of Common Stock to be purchased by such
Purchaser pursuant to this Agreement shall be equal to the Purchase Price.
The aggregate purchase price payable by the Purchasers to the Company for all
of the Shares shall be $5,000,002.875.
2.2 Closing. The closing of the transactions contemplated under this
Agreement (the "Closing") shall take place at the offices of Xxxxxxx, Xxxx &
Xxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 at 10:00 a.m. on July
18, 1997 or at such other location, date and time as may be agreed upon in
writing between all of the Purchasers and the Company. At the Closing, the
Company shall deliver to each Purchaser a single stock certificate, registered
in the name of such Purchaser, representing the number of shares of Common Stock
purchased by such Purchaser, against payment of the purchase price therefor by
wire transfer of immediately available funds to such account or accounts as the
Company shall designate in writing.
3. Representations and Warranties of the Company. The Company hereby
represents and warrants to each of the Purchasers as follows:
3.1 Incorporation. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
qualified to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification, except
where the failure to so qualify would not have a material adverse effect upon
the Company. The Company has all requisite corporate power and authority to
carry on its business as now conducted.
3.2 Capitalization. The authorized capital stock of the Company consists
of (i) 25,000,000 shares of Common Stock, of which 9,569,386 shares are
outstanding on the date hereof and (ii) 5,000,000 shares of preferred stock, of
which no shares are outstanding on the date hereof. Except as set forth in
Schedule 3.2 hereto, there are no existing options, warrants, calls, preemptive
(or similar) rights, subscriptions or other rights, agreements, arrangements or
commitments of any character obligating the Company to issue, transfer or sell,
or cause to be issued, transferred or sold, any shares of the capital stock of
the Company or other equity interests in the Company or any securities
convertible into or exchangeable for such shares of capital stock or other
equity interests, and there are no outstanding contractual obligations of the
Company to repurchase, redeem or otherwise acquire any shares of its capital
stock or other equity interests.
3.3 Authorization. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization, execution,
delivery and performance of this Agreement and the Registration Rights
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Agreement and the consummation of the transactions contemplated herein and
therein has been taken. When executed and delivered by the Company, each of
this Agreement and the Registration Rights Agreement shall constitute the
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as such may be limited by
bankruptcy, insolvency, reorganization or other laws affecting creditors'
rights generally and by general equitable principles. The Company has all
requisite corporate power to enter into this Agreement and the Registration
Rights Agreement and to carry out and perform its obligations under the terms
of this Agreement and the Registration Rights Agreement.
3.4 Valid Issuance of the Shares. The Shares being purchased by the
Purchasers hereunder will, upon issuance pursuant to the terms hereof, be duly
authorized and validly issued, fully paid and nonassessable.
3.5 Financial Statements. The Company has furnished to each Purchaser its
audited Statements of Income, Stockholders' Equity and Cash Flows for each of
the fiscal years ended December 31, 1995 and 1996, its audited Consolidated
Balance Sheet as of December 31, 1996, its unaudited Statements of Income,
Stockholders' Equity and Cash Flows for the period from January 1, 1997 to March
31, 1997, and its unaudited Balance Sheet as of March 31, 1997. All such
financial statements are hereinafter referred to collectively as the "Financial
Statements". The Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved, and fairly present, in all material respects, the
financial position of the Company and the results of its operations as of the
date and for the periods indicated thereon, except that the unaudited financial
statements may not be in accordance with generally accepted accounting
principles because of the absence of footnotes normally contained therein and
are subject to normal year-end audit adjustments which, individually, and in the
aggregate, will not be material. Since March 31, 1997, there has been no
material adverse change (actual or threatened) in the assets, liabilities
(contingent or other), operations or condition (financial or other) of the
Company.
3.6 SEC Documents. The Company has furnished to each Purchaser, a true
and complete copy of the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, the Company's Quarterly Report on Form 10-Q for the three
months ended March 31, 1997, and any other statement, report, registration
statement (other than registration statements on Form S-8) or definitive proxy
statement filed by the Company with the SEC during the period commencing March
31, 1997 and ending on the date hereof. The Company will, promptly upon the
filing thereof, also furnish to each Purchaser all statements, reports
(including, without limitation, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K), registration statements and definitive proxy
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statements filed by the Company with the SEC during the period commencing on
the date hereof and ending on the Closing Date (all such materials required
to be furnished to each Purchaser pursuant to this sentence or pursuant to
the next preceding sentence of this Section 3.6 being called, collectively,
the "SEC Documents"). As of their respective filing dates, the SEC Documents
complied or will comply in all material respects with the requirements of the
Exchange Act or the Securities Act, as applicable, and none of the SEC
Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under which
they were made, not misleading, as of their respective filing dates, except
to the extent corrected by a subsequently filed SEC Document. The Company
has, during the period that the Company has been subject to the requirements
of Section 12 or 15(d) of the Exchange Act, filed in a timely manner all
reports and other material required to be filed by it pursuant to Section 13,
14 or 15(d) of the Exchange Act. The Company has not filed any amendment to
its Annual Report on Form 10-K for the year ended December 31, 1996 or its
Quarterly Report on Form 10-Q for the three months ended March 31, 1997. As
of the date hereof, the Company has not filed any Current Report on Form 8-K
for any period ending on the date hereof.
3.7 Consents. Except for (i) the filing and effectiveness of any
registration statement required to be filed by the Company under the Securities
Act in connection with the exercise by one or more Purchasers of their rights
under the Registration Rights Agreement and (ii) any required state "blue sky"
law filings in connection with the transactions contemplated under such
registration statement, all consents, approvals, orders and authorizations
required on the part of the Company in connection with the execution, delivery
or performance of this Agreement and the Registration Rights Agreement and the
consummation of the transactions contemplated herein and therein have been
obtained and will be effective as of the Closing Date.
3.8 No Conflict. The execution and delivery of this Agreement and the
Registration Rights Agreement by the Company and the consummation of the
transactions contemplated hereby and thereby will not conflict with or result in
any violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to a loss of a material benefit under (i) any provision of the
Certificate of Incorporation or By-laws of the Company or (ii) any agreement or
instrument, permit, franchise, license, judgment, order, statute, law,
ordinance, rule or regulations, applicable to the Company or its respective
properties or assets.
3.9 Brokers or Finders. The Company has not dealt with any broker or
finder in connection with the transactions contemplated by this Agreement, and
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the Company has not incurred, and shall not incur, directly or indirectly, any
liability for any brokerage or finders' fees or agents commissions or any
similar charges in connection with this Agreement or any transaction
contemplated hereby.
3.10 Nasdaq National Market. The Common Stock is listed on the Nasdaq
National Market System, and there are no proceedings to revoke or suspend such
listing.
3.11 Absence of Litigation. There is no action, suit or proceeding or, to
the Company's knowledge, any investigation, pending, or to the Company's
knowledge, threatened by or before any governmental body against the Company and
in which an unfavorable outcome, ruling or finding in any said matter, or for
all matters taken as a whole, might have a material adverse effect on the
Company. The foregoing includes, without limitation, any such action, suit,
proceeding or investigation that questions this Agreement or the Registration
Rights Agreement or the right of the Company to execute, deliver and perform
under same.
3.12 Intangible Rights. To the Company's knowledge, all Intangible Rights
that are necessary for the conduct of the business of the Company as it is
conducted on the date hereof are valid and enforceable, and no claims adverse to
the interests of the Company have been asserted with respect to the Company's
ownership or use of any such Intangible Rights. Except for infringements that
would not, individually or in the aggregate, have a material adverse effect on
the Company or on the Company's operations or financial condition, to the
knowledge of the Company, the Company is not infringing any Intangible Right
owned or used by any third party nor is any third party infringing any
Intangible Right owned or used by the Company.
3.13 Certain Agreements. Except as set forth in Schedule 3.13 hereto, all
of the collaborative agreements, research and development agreements, licensing
agreements and other agreements with corporate partners that have been
previously disclosed by the Company in any reports or filings made by the
Company pursuant to the Exchange Act or in any registration statement filed by
the Company under the Securities Act prior to the date hereof, are valid and
enforceable obligations of the Company and, to the Company's knowledge, of the
other parties thereto. Except for breaches or defaults that would not,
individually or in the aggregate, have a material adverse effect on the Company
or on the Company's operations or financial condition, the Company is not in
breach or default under any such contracts or agreements, nor has there occurred
any event which, with the giving of notice or the passage of time, would
constitute a breach or default on the Company's part under any such contracts or
agreements. To the Company's knowledge, none of the other parties to such
contracts and agreements is in breach or default thereunder nor has there
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occurred any event which, with the giving of notice or the passage of time,
would constitute a breach or default on any of such other party's part
thereunder.
3.14 Certain Regulatory Matters. Except as set forth in Schedule 3.14
hereto, the Company has not conducted nor has had conducted on its behalf any
clinical or pre-clinical trials of any products of the Company nor has the
Company marketed, sold or licensed any products or filed or has pending with the
United States Food and Drug Administration ("FDA") any New Drug Applications,
Investigatory New Drug Applications or Abbreviated New Drug Applications.
3.15 Regulation S. The sale of those Shares to be purchased by IBT
pursuant to this Agreement will be made in accordance with Regulation S. None
of the Company, any person affiliated with the Company or any person acting on
behalf of the Company or any such affiliate engaged in any Directed Selling
Efforts (as defined in Regulation S) with respect to such Shares. The
transactions contemplated by this Agreement are not part of a plan or scheme on
the part of the Company to evade the registration provisions of the Securities
Act.
4. Representations and Warranties of the Purchasers. Each Purchaser
severally for itself, and not jointly with the other Purchasers, represents and
warrants to the Company as follows:
4.1 Authorization. All action on the part of such Purchaser and, if
applicable, its officers, directors and shareholders necessary for the
authorization, execution, delivery and performance of this Agreement and the
Registration Rights Agreement and the consummation of the transactions
contemplated herein and therein has been taken. When executed and delivered,
each of this Agreement and the Registration Rights Agreement will constitute the
legal, valid and binding obligation of such Purchaser, enforceable against such
Purchaser in accordance with its terms, except as such may be limited by
bankruptcy, insolvency, reorganization or other laws affecting creditors' rights
generally and by general equitable principles. Such Purchaser has all requisite
corporate power to enter into each of this Agreement and the Registration Rights
Agreement and to carry out and perform its obligations under the terms of this
Agreement and the Registration Rights Agreement.
4.2 Purchase Entirely for Own Account. Such Purchaser is acquiring those
of the Shares being purchased by it hereunder, for investment, for its own
account, and not for resale or with a view to distribution thereof in violation
of the Securities Act. Notwithstanding the foregoing, each Purchaser hereby
reserves the right to dispose of the Shares in a manner consistent with its
fiduciary obligations to its shareholders and the Securities Act and Exchange
Act.
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4.3 Investor Status; Etc. Such Purchaser certifies and represents to the
Company that at the time such Purchaser acquires any of the Shares, such
Purchaser (a) will not be a "U.S Person" as defined in Rule 902 of Regulation S
and/or (b) will be an "Accredited Investor" as defined in Rule 501 of Regulation
D promulgated under the Securities Act and was not organized for the purpose of
acquiring any of the Shares. Such Purchaser's financial condition is such that
it is able to bear the risk of holding those of the Shares purchased by it
pursuant to this Agreement for an indefinite period of time and the risk of loss
of its entire investment. Such Purchaser has been afforded the opportunity to
ask questions of and receive answers from the management of the Company
concerning this investment and has sufficient knowledge and experience in
investing in companies similar to the Company in terms of the Company's stage of
development so as to be able to evaluate the risks and merits of its investment
in the Company.
4.4 Shares Not Registered. Such Purchaser understands that the Shares
have not been registered under the Securities Act, by reason of their issuance
by the Company in a transaction exempt from the registration requirements of the
Securities Act, and that those of the Shares purchased by such Purchaser
pursuant to this Agreement must continue to be held by such Purchaser unless a
subsequent disposition thereof is registered under the Securities Act or is
exempt from such registration. The Purchaser understands that the exemptions
from registration afforded by Rule 144 (the provisions of which are known to it)
promulgated under the Securities Act depend on the satisfaction of various
conditions, and that, if applicable, Rule 144 may afford the basis for sales
only in limited amounts.
4.5 No Conflict. The execution and delivery of this Agreement and the
Registration Rights Agreement by such Purchaser and the consummation of the
transactions contemplated hereby and thereby will not conflict with or result in
any violation of or default by such Purchaser (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to a loss of a material benefit under (i) any
provision of the organizational documents of such Purchaser or (ii) any
agreement or instrument, permit, franchise, license, judgment, order, statute,
law, ordinance, rule or regulations, applicable to such Purchaser or its
respective properties or assets.
4.6 Brokers. Such Purchaser has not retained, utilized or been
represented by any broker or finder in connection with the transactions
contemplated by this Agreement.
4.7 Consents. All consents, approvals, orders and authorizations
required on the part of such Purchaser in connection with the execution,
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delivery or performance of this Agreement and the consummation of the
transactions contemplated herein have been obtained and are effective as of
the Closing Date.
4.8 Investment Representations. IBT, as to itself, represents and
warrants to the Company that: (i) it is a corporation organized under the laws
of the United Kingdom, (ii) it is not a U.S. Person (as such term is defined in
Rule 902 of Regulation S), (iii) it is not acquiring any of the Shares for the
account or benefit of any U.S. Person, (iv) it was not formed for the specific
purpose of acquiring any of the Shares, (v) its principal office is located in
London, England and (vi) it will not, during the applicable Restricted Period
(as defined under Regulation S) offer or sell any of the Shares purchased by it,
in the United States, to a U.S. Person or for the account or benefit of a U.S.
Person or other than in accordance with Rule 903 or Rule 904 of Regulation S or
pursuant to an effective registration statement under the Securities Act.
5. Standstill Obligations. Each Purchaser hereby agrees with the Company
that, until five (5) years after the Closing Date, without the prior written
consent of the Company (which written consent the Company may decide to give or
withhold in its absolute discretion, provided that Company agrees to consider in
good faith a request made by such Purchaser soliciting that the Company give
such written consent), it will not directly or indirectly (through an affiliate
or otherwise) acquire beneficial ownership of any shares of Common Stock of the
Company, any securities convertible into, exercisable for or exchangeable for
shares of Common Stock of the Company, or any other right to acquire shares of
Common Stock, if the effect of such acquisition would be to increase the
aggregate number of shares of Common Stock then beneficially owned (as such term
is defined within the Exchange Act and the rules and regulations promulgated by
the SEC thereunder), directly or indirectly, by such Purchaser to more than the
number of Shares being purchased by such Purchaser pursuant to this Agreement.
6. Conditions Precedent.
6.1. Conditions to the Obligation of the Purchasers to Consummate the
Closing. The obligation of each Purchaser to consummate the Closing and to
purchase and pay for those Shares being purchased by it pursuant to this
Agreement is subject to the satisfaction of the following conditions precedent:
(a) The representations and warranties contained herein of the
Company shall be true and correct on and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date (it being
understood and agreed by each Purchaser that, in the case of any representation
and warranty of the Company contained herein which is not hereinabove qualified
by application thereto of a materiality standard, such representation
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and warranty need be true and correct only in all material respects in order
to satisfy as to such representation or warranty the condition precedent set
forth in the foregoing provisions of this Section 6.1(a)).
(b) The Registration Rights Agreement shall have been executed and
delivered by the Company.
(c) The Company shall not have been adversely affected in any
material way prior to the Closing Date; and the Company shall have performed all
obligations and conditions herein required to be performed or observed by the
Company on or prior to the Closing Date.
(d) No proceeding challenging this Agreement or the transactions
contemplated hereby, or seeking to prohibit, alter, prevent or materially delay
the Closing, shall have been instituted before any court, arbitrator or
governmental body, agency or official and shall be pending.
(e) The purchase of and payment for the Shares by the Purchasers
shall not be prohibited by any law or governmental order or regulation. All
necessary consents, approvals, licenses, permits, orders and authorizations of,
or registrations, declarations and filings with, any governmental or
administrative agency or of any other person with respect to any of the
transactions contemplated hereby shall have been duly obtained or made and shall
be in full force and effect.
(f) All instruments and corporate proceedings of the Company in
connection with the transactions contemplated by this Agreement to be
consummated at the Closing shall be satisfactory in form and substance to such
Purchaser, and such Purchaser shall have received copies (executed or certified,
as may be appropriate) of all documents which such Purchaser may have reasonably
requested in connection with such transactions.
(g) The Purchasers shall have received from Xxxxxxx, Xxxx & Xxxxx
LLP, counsel to the Company, an opinion addressed to them, dated the Closing
Date and substantially in the form of Exhibit C hereto.
(h) Each of the other Purchasers shall have purchased, in accordance
with this Agreement, the number of shares of Common Stock that such other
Purchaser has agreed to purchase pursuant to Section 2.1 hereof.
6.2. Conditions to the Obligation of the Company to Consummate the
Closing. The obligation of the Company to consummate the Closing and to
issue and sell to each of the Purchasers those of the Shares to be purchased
by it at the Closing is subject to the satisfaction of the following
conditions precedent:
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(a) The representations and warranties contained herein of such
Purchaser shall be true and correct on and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date (it being
understood and agreed by the Company that, in the case of any representation and
warranty of each Purchaser contained herein which is not hereinabove qualified
by application thereto of a materiality standard, such representation and
warranty need be true and correct only in all material respects in order to
satisfy as to such representation or warranty the condition precedent set forth
in the foregoing provisions of this Section 6.2(a)).
(b) The Registration Rights Agreement shall have been executed and
delivered by each Purchaser.
(c) The Purchasers shall have performed all obligations and
conditions herein required to be performed or observed by the Purchasers on or
prior to the Closing Date.
(d) No proceeding challenging this Agreement or the transactions
contemplated hereby, or seeking to prohibit, alter, prevent or materially delay
the Closing, shall have been instituted before any court, arbitrator or
governmental body, agency or official and shall be pending.
(e) The sale of the Shares by the Company hereunder shall not be
prohibited by any law or governmental order or regulation. All necessary
consents, approvals, licenses, permits, orders and authorizations of, or
registrations, declarations and filings with, any governmental or administrative
agency or of any other person with respect to any of the transactions
contemplated hereby shall have been duly obtained or made and shall be in full
force and effect.
(f) All instruments and corporate proceedings of each Purchaser in
connection with the transactions contemplated by this Agreement to be
consummated at the Closing shall be satisfactory in form and substance to the
Company, and the Company shall have received counterpart originals, or certified
or other copies of all documents, including without limitation records of
corporate or other proceedings, which it may have reasonably requested in
connection therewith.
7. Transfer, Legends.
7.1. Special Securities Law Transfer Restrictions.
(a) The Regulation S Shares shall be subject to the restrictions on
transfer set forth below in this Section 7.1(a). No Purchaser shall sell,
assign, pledge, transfer or otherwise dispose of any Regulation S Shares, except
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(i) pursuant to an effective registration statement under the Securities Act,
(ii) in accordance with the provisions of Regulation S or (iii) pursuant to an
available exemption from registration under the Securities Act and applicable
state securities laws and, if requested by the Company, upon delivery by such
Purchaser of an opinion of counsel reasonably satisfactory to the Company to the
effect that the proposed transfer is exempt from registration under the
Securities Act and applicable state securities law. Without limiting the
generality of the provisions of the immediately preceding sentence, each
Purchaser hereby further agrees that during the applicable Restricted Period (as
defined in Regulation S), such Regulation S Shares shall not be offered, sold,
assigned, pledged, transferred or otherwise disposed of to any U.S. Person or
for the account or benefit of any U.S. Person. Any sale, assignment, pledge,
transfer or other disposition of the Regulation S Shares in violation of this
Section 7.1(a) shall be null and void. The Company shall not register any sale,
assignment, pledge, transfer or other disposition of any of the Regulation S
Shares in violation of this Section 7.1(a).
(b) With respect to those Shares that are not Regulation S Shares, no
Purchaser shall sell, assign, pledge, transfer or otherwise dispose or encumber
any of such Shares, except (i) pursuant to an effective registration statement
under the Securities Act or (ii) pursuant to an available exemption from
registration under the Securities Act and applicable state securities laws and,
if requested by the Company, upon delivery by such Purchaser of an opinion of
counsel reasonably satisfactory to the Company to the effect that the proposed
transfer is exempt from registration under the Securities Act and applicable
state securities laws. Any transfer or purported transfer of any of such Shares
in violation of this Section 7.1(b) shall be void. The Company shall not
register any transfer of any of Shares in violation of this Section 7.1(b).
(c) The Company may, and may instruct any transfer agent for the
Company, to place such stop transfer orders as may be required on the transfer
books of the Company in order to ensure compliance with the provisions of this
Section 7.1.
7.2. Legends.
(a) Each certificate or other document evidencing any of the Shares
that are sold and/or issued by the Corporation in reliance on Regulation S, as
determined by the Corporation in its sole discretion, shall be endorsed with the
legends set forth below, and each Purchaser covenants that, except to the extent
such restrictions are waived by the Company, it shall not transfer the shares
represented by any such certificate without complying with the restrictions on
transfer described in this Agreement and the legends endorsed on such
certificate:
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"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF IN THE UNITED STATES OR TO U.S. PERSONS, EXCEPT IN ACCORDANCE
WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER SUCH ACT, ABSENT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR UNLESS AN EXEMPTION UNDER
SUCH ACT IS THEN AVAILABLE AND, IF REQUESTED BY THE COMPANY, UPON DELIVERY
OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THE
PROPOSED TRANSFER IS EXEMPT UNDER SUCH ACT."
(b) Each certificate or other document evidencing any of the Shares
that are issued by the Company without relying on Regulation S, as determined by
the Company in its sole description, shall be endorsed with the legends set
forth below, and each Purchaser covenants that, except to the extent such
restrictions are waived by the Company, it shall not transfer the shares
represented by any such certificate without complying with the restrictions on
transfer described in this Agreement and the legends endorsed on such
certificate:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED, SOLD,
ASSIGNED, PLEDGED TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER SAID ACT AND, IF
REQUESTED BY THE COMPANY, UPON DELIVERY OF AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER IS
EXEMPT FROM SAID ACT."
8. Termination; Liabilities Consequent Thereon. This Agreement may be
terminated and the transactions contemplated hereunder abandoned at any time
prior to the Closing only as follows:
(a) by the Purchasers, upon notice to the Company if the conditions
set forth in Section 6.1 shall not have been satisfied on or prior to July 18,
1997; or
13
(b) by the Company, upon notice to the Purchasers if the conditions
set forth in Section 6.2 shall not have been satisfied on or prior to July 18,
1997; or
(c) at any time by mutual agreement of the Company and the
Purchasers; or
(d) by the Purchasers, if there has been any breach of any
representation or warranty or any material breach of any covenant of the Company
contained herein and the same has not been cured within 30 days after notice
thereof (it being understood and agreed by each Purchaser that, in the case of
any representation or warranty of the Company contained herein which is not
hereinabove qualified by application thereto of a materiality standard, such
representation or warranty will be deemed to have been breached for purposes of
this Section 8(d) only if such representation or warranty was not true and
correct in all material respects at the time such representation or warranty was
made by the Company); or
(e) by the Company, if there has been any breach of any
representation, warranty or any material breach of any covenant of any Purchaser
contained herein and the same has not been cured within 30 days after notice
thereof (it being understood and agreed by the Company that, in the case of any
representation or warranty of any Purchaser contained herein which is not
hereinabove qualified by application thereto of a materiality standard, such
representation or warranty will be deemed to have been breached for purposes of
this Section 8(e) only if such representation or warranty was not true and
correct in all material respects at the time such representation or warranty was
made by such Purchaser).
Any termination pursuant to this Section 8 shall be without liability on the
part of any party, unless such termination is the result of a material breach of
this Agreement by a party to this Agreement in which case such breaching party
shall remain liable for such breach notwithstanding any termination of this
Agreement.
9. Election of IBT Nominee to Board of Directors. The Company shall take
all steps as are necessary and appropriate and otherwise use its best efforts to
cause an individual designated by IBT (which designation shall be made by IBT in
accordance with the provisions set forth below in this Section 9) (such
individual so initially designated by IBT, and each other individual from time
to time designated by IBT pursuant to, and in accordance with, the provisions
set forth below in this Section 9 in replacement of the individual theretofore
designated by IBT, being referred to herein as the "IBT Nominee") to be duly and
properly elected on the Closing Date to a seat on the Board of Directors of the
Company.
14
Thereafter, until the Nomination Termination Date (as defined below in
this Section 9), at each annual or special meeting of the stockholders of the
Company, or in connection with any written consent solicited from the
stockholders of the Company, at or with respect to which a vote is taken to
elect a director to fill the seat occupied by the IBT Nominee theretofore
serving as a director of the Company (whether upon the expiration of such IBT
Nominee's term as a director of the Company or otherwise), the Company shall
nominate the IBT Nominee for election to the Board of Directors.
Until the Nomination Termination Date, in the event that the individual at
anytime serving on the Board of Directors of the Company as the IBT Nominee
shall, for any reason, cease or be unable so to serve, the Company shall take
all steps as are necessary and appropriate and otherwise use its best efforts to
cause the vacancy on the Board of Directors of the Company thereby created to be
filled promptly by the election to the Board of Directors of another IBT
Nominee. The individual serving on the Board of Directors of the Company as the
IBT Nominee shall be entitled to reimbursement of costs and expenses and payment
of fees on terms no less favorable than those available to other directors of
the Company. In addition, the individual serving on the Board of Directors of
the Company as the IBT Nominee shall be entitled to directors' insurance and
indemnification coverage on terms no less favorable than those available to
other directors of the Company.
Notwithstanding anything in this Section 9 to the contrary, without the
prior written consent of the Company, in no event shall IBT designate any
individual as the IBT Nominee if such individual is an officer, director,
employee, consultant or stockholder of (A) any business, person or entity that
is a competitor, vendor, supplier or customer of the Company or (B) any
Affiliate of such business, person or entity. Also notwithstanding anything in
this Section 9 to the contrary, in no event shall the Company be required to
nominate a specific individual for election to the Board of Directors of the
Company as the IBT Nominee or to otherwise take any steps or utilize any efforts
to cause such individual to be elected to the Board of Directors of the Company
if the stockholders of the Company do not vote or otherwise take action in favor
of the reelection of such individual to the Board of Directors of the Company,
or vote or otherwise take action to remove such individual as a director of the
Company. The foregoing sentence shall not relieve the Company's obligations
under this Section 9 with respect to any other individual that becomes the IBT
Nominee.
The provisions of this Section 9 shall automatically terminate on the
Nomination Termination Date.
15
For purposes of this Section 9, the term "Nomination Termination Date"
shall mean the date on which IBT or any of its Affiliates ceases to own at least
seventy five percent (75%) of those Shares purchased by IBT, at the Closing,
pursuant to this Agreement (subject to proportionate adjustment upon any stock
split, stock dividend, reverse stock split or like event).
10. Miscellaneous Provisions.
10.1 Public Statements or Releases. None of the parties to this Agreement
shall make, issue, or release any announcement, whether to the public generally,
or to any of its employees, suppliers, or customers, with respect to this
Agreement or the transactions provided for herein, or make any statement or
acknowledgment of the existence of, or reveal the status of, this Agreement or
the transactions provided for herein, without the prior consent of the other
parties, which shall not be unreasonably withheld or delayed, provided, that
nothing in this Section 9.1 shall prevent any of the parties hereto from making
such public announcements as it may consider necessary in order to satisfy its
legal obligations, but to the extent not inconsistent with such obligations, it
shall provide the other parties with an opportunity to review and comment on any
proposed public announcement before it is made.
10.2 Further Assurances. Each party agrees to cooperate fully with the
other party and to execute such further instruments, documents and agreements
and to give such further written assurances, as may be reasonably requested by
the other party to better evidence and reflect the transactions described herein
and contemplated hereby, and to carry into effect the intents and purposes of
this Agreement.
10.3 Rights Cumulative. Each and all of the various rights, powers and
remedies of the parties shall be considered to be cumulative with and in
addition to any other rights, powers and remedies which such parties may have at
law or in equity in the event of the breach of any of the terms of this
Agreement. The exercise or partial exercise of any right, power or remedy shall
neither constitute the exclusive election thereof nor the waiver of any other
right, power or remedy available to such party.
10.4 Pronouns. All pronouns or any variation thereof shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person, persons, entity or entities may require.
10.5 Notices.
(a) Any notices, reports or other correspondence (hereinafter collectively
referred to as "correspondence") required or permitted to be given hereunder
shall be sent by postage prepaid first class mail, courier or telecopy or
16
delivered by hand to the party to whom such correspondence is required or
permitted to be given hereunder. The date of giving any notice shall be the
date of its actual receipt.
(b) All correspondence to the Company shall be addressed as follows:
Cubist Pharmaceuticals, Inc.
00 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx,
President and Chief Executive Officer
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx, Xxxx & Xxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Telecopier: (000) 000-0000
(c) All correspondence to any Purchaser shall be sent to such Purchaser at
the address set forth in Exhibit A.
with a copy to:
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
(d) Any entity may change the address to which correspondence to it is to
be addressed by notification as provided for herein.
10.6 Captions. The captions and paragraph headings of this Agreement are
solely for the convenience of reference and shall not affect its interpretation.
10.7 Severability. Should any part or provision of this Agreement be held
unenforceable or in conflict with the applicable laws or regulations of any
jurisdiction, the invalid or unenforceable part or provisions shall be replaced
with a provision which accomplishes, to the extent possible, the original
business purpose of such part or provision in a valid and enforceable manner,
and the remainder of this Agreement shall remain binding upon the parties
hereto.
17
10.8 Governing Law; Injunctive Relief.
(a) This Agreement shall be governed by and construed in accordance with
the internal and substantive laws of the Commonwealth of Massachusetts and
without regard to any conflicts of laws concepts which would apply the
substantive law of some other jurisdiction.
(b) Each of the parties hereto acknowledges and agrees that damages will
not be an adequate remedy for any material breach or violation of this Agreement
if such material breach or violation would cause immediate and irreparable harm
(an "Irreparable Breach"). Accordingly, in the event of a threatened or ongoing
Irreparable Breach, each party hereto shall be entitled to seek, in any state or
federal court in the Commonwealth of Massachusetts, equitable relief of a kind
appropriate in light of the nature of the ongoing or threatened Irreparable
Breach, which relief may include, without limitation, specific performance or
injunctive relief; provided, however, that if the party bringing such action is
unsuccessful in obtaining the relief sought, the moving party shall pay the
non-moving party's reasonable costs, including attorney's fees, incurred in
connection with defending such action. Such remedies shall not be the parties'
exclusive remedies, but shall be in addition to all other remedies provided in
this Agreement.
10.9 Waiver. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or be construed as, a further or continuing waiver of any such
term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.
10.10 Expenses. Each party will bear its own costs and expenses in
connection with this Agreement.
10.11 Assignment. The rights and obligations of the parties hereto
shall inure to the benefit of and shall be binding upon the authorized
successors and permitted assigns of each party. Neither party may assign its
rights or obligations under this Agreement or designate another person (i) to
perform all or part of its obligations under this Agreement or (ii) to have
all or part of its rights and benefits under this Agreement, in each case
without the prior written consent of the other party, except, solely in the
case of parties to this Agreement other than the Company, to an Affiliate or
to a successor of the business, by merger or otherwise, to which this
Agreement relates, provided that in the case of an assignment to an Affiliate
the assigning party shall promptly notify the other party in writing of such
assignment and shall remain liable (both directly and as guarantor) with
respect to all obligations so assigned. In the event of any assignment or in
the event that an Affiliate of either party shall exercise
18
rights and/or perform obligations hereunder pursuant to the terms of this
Agreement, the assignee or Affiliate, as the case may be, shall specifically
assume and be bound by the provisions of the Agreement by executing and
agreeing to an assumption agreement reasonably acceptable to the other party.
10.12 Survival. The respective representations and warranties given by
the parties hereto, and the other covenants and agreements contained herein,
shall survive the Closing Date and the consummation of the transactions
contemplated herein for a period of two years, without regard to any
investigation made by any party.
10.13 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto respecting the subject matter hereof and
supersedes all prior agreements, negotiations, understandings, representations
and statements respecting the subject matter hereof, whether written or oral.
No modification, alteration, waiver or change in any of the terms of this
Agreement shall be valid or binding upon the parties hereto unless made in
writing and duly executed by the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
19
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the day and year first above written.
CUBIST PHARMACEUTICALS, INC.
By: /s/Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and Chief Executive
Officer
PURCHASERS:
INTERNATIONAL BIOTECHNOLOGY
TRUST plc
By:
-------------------------------
Name:
Title:
20
Exhibit A
---------
PURCHASERS
Total Amount of
Name and Address of Purchasers Investment
------------------------------ ----------------
International Biotechnology Trust plc $5,000,002.875
Five Xxxxxx Xxxxx
Xx. Xxxxxxx'x Xxxx
Xxxxxx XX0X 0XX
Xxxxxxx
