EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
between
REGENERON PHARMACEUTICALS, INC.
and THE PROCTER & XXXXXX COMPANY
May 13, 1997
TABLE OF CONTENTS
1. INTRODUCTION AND CERTAIN DEFINITIONS 1
2. SECURITIES SUBJECT TO THIS AGREEMENT 2
2.1 REGISTRABLE SECURITIES 2
2.2 HOLDERS OF REGISTRABLE SECURITIES 2
2.3 SALE OR TRANSFER OF COMPANY'S COMMON STOCK; LEGEND 3
3. DEMAND REGISTRATIONS 3
3.1 DEMAND BY HOLDERS 3
3.2 EFFECTIVE REGISTRATION 4
3.3 REGISTRATION STATEMENT FORM 4
3.4 SELECTION OF UNDERWRITERS 4
3.5 REGISTRATION OF OTHER SECURITIES 4
3.6 PRIORITY AMONG HOLDERS OF REGISTRABLE SECURITIES
IN REQUESTED REGISTRATION 5
3.7 DELAY OF REQUESTED REGISTRATION 5
4. PIGGYBACK REGISTRATIONS 5
4.1 PARTICIPATION 5
4.2 UNDERWRITER'S CUTBACK 6
4.3 NO EFFECT ON DEMAND REGISTRATIONS 6
5. HOLD-BACK AGREEMENTS 6
5.1 RESTRICTIONS APPLICABLE TO COMPANY REGISTRATION 6
5.2 RESTRICTIONS APPLICABLE TO DEMAND REGISTRATION 7
6. REGISTRATION PROCEDURES 8
7. ALLOCATION OF EXPENSES 9
8. INDEMNIFICATION 10
9. INFORMATION BY HOLDER 11
10. RULE 144 REQUIREMENTS 11
11. STANDSTILL AGREEMENT 12
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12. AMENDMENTS AND WAIVERS 14
13. NOTICES 14
14. SUCCESSORS AND ASSIGNS 14
15. TRANSFER OF CERTAIN RIGHTS 14
16. DESCRIPTIVE HEADINGS 15
17. GOVERNING LAW 15
18. COUNTERPARTS 15
19. ENTIRE AGREEMENT 15
20. SEVERABILITY 15
SIGNATURE PAGE 16
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement, is made as of May 13, 1997, by and
between Regeneron Pharmaceuticals, Inc., a New York corporation (the "Company"),
and The Procter & Xxxxxx Company, an Ohio corporation (the "Purchaser").
1. Introduction and Certain Definitions. The Company is a party to a
Securities Purchase Agreement (the Securities Purchase Agreement), dated May 13,
1997, with the Purchaser and pursuant to which the Company has agreed, among
other things, to issue shares of its common stock, par value .001 per share (the
Common Stock) and warrants to purchase shares of Common Stock, to the Purchaser.
This Agreement shall become effective upon the issuance of such securities to
the Purchaser pursuant to the Securities Purchase Agreement. Certain capitalized
terms used in this Agreement are defined below; references to sections shall be
to sections of this Agreement. Terms not otherwise defined herein shall have the
meanings assigned to them in the Securities Purchase Agreement.
1.1. As used in this Agreement, the following terms shall have the following
respective meanings:
"Affiliate" means any corporation, company, partnership, joint venture,
or other entity which controls, is controlled by, or is under common
control with Purchaser. For purposes of this definition control shall
mean the direct or indirect ownership of at least fifty (50%) percent
or, if less than fifty (50%) percent, the maximum percentage as allowed
by applicable law of (a) the shares of capital stock entitled to vote
for the election of directors, or (b) ownership interest.
"Agent" means any Person authorized to act on behalf of Purchaser with
respect tot he transactions contemplated by this Agreement.
"Collaboration Agreement" means that certain Collaboration Agreement,
dated May 13, 1997 between Regeneron Pharmaceuticals, Inc. and The
Procter & Xxxxxx Company. The Effective Date of the Collaboration
Agreement, as that term is defined therein, shall also be referred to
herein as the "Effective Date" hereof.
"Commission" means the Securities and Exchange Commission, or any other
Federal agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor Federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time,
be in effect.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means an individual, partnership, corporation, limited liability
company, trust or incorporated organization, or other business entity, or a
government or agency or political subdivision thereof.
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement and by all other
amendments and supplements to the prospectus, including post-effective
amendments and all material incorporated by reference in such
prospectus.
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"Registrable Securities" means (i) the Common Stock and the Warrant
Shares acquired by the Purchaser pursuant to the Securities Purchase
Agreement (ii) any other shares of Common Stock of the Company issued in
respect of such shares (because of stock splits, stock dividends,
reclassifications, recapitalization, or similar event); provided,
however, that shares of Common Stock which are Registrable Securities
shall cease to be Registrable Securities upon any sale of such shares
pursuant to a Registration Statement, Section 4(1) of the Securities
Act, or Rule 144 under the Securities Act, or any sale in any manner to
a person or entity which is not entitled to the rights provided by this
Agreement, or when such Registrable Securities shall have been otherwise
transferred, new certificates for them not bearing a legend restricting
transfer under the Securities Act shall have been delivered by the
Company and they may be publicly resold without subsequent registration
under the Securities Act or in compliance with Rule 144 thereunder;
provided, further, however, that any securities that have ceased to be
Registrable Securities cannot thereafter become Registrable Securities.
"Registration" means a registration of the Company's securities for sale
to the public under a Registration Statement.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of securities
of the Company (other than a registration statement on Form S-8 or Form
S-4, or their successor forms, or any other form for a limited purpose,
or any registration statement covering only securities proposed to be
issued in exchange for securities or assets of another corporation).
"Registration Expenses" means the expenses described in subsection 2.3.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor Federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time,
be in effect.
"Underwritten Registration or Underwritten Offering" means a
Registration in which the securities of the Company are sold to an
underwriter for reoffering to the public.
"Warrant Shares" means any shares of Common Stock issued or issuable upon
exercise of any of the Warrants.
2 Securities Subject to this Agreement.
2.1 Registrable Securities. The securities entitled to the benefits of
this Agreement are the Registrable Securities. The rights of the holders of the
Registrable Securities may be limited by rights of other holders of the
Company's securities who entered into agreements with the Company before the
effective date of this Agreement including, without limitation, the rights
obtained by Amgen Inc. in a certain Registration Rights Agreement dated April
15, 1996 with the Company.
2.2 Holders of Registrable Securities. A Person is deemed to a holder
of Registrable Securities whenever such Person owns Registrable Securities or
has the right to acquire such Registrable Securities, whether or not such
ownership or right was acquired pursuant to the Securities Purchase Agreement or
the Warrant Agreement, and whether or not such acquisition has actually been
effected and disregarding any legal restrictions upon the exercise of such
right.
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2.3 Sale or Transfer of Company's Common Stock; Legend.
(a) The Registrable Securities shall not be sold or transferred
unless either (i) they first shall have been registered under the Securities
Act, or (ii) the Company first shall have been furnished with an opinion of
legal counsel, reasonably satisfactory to the Company, to the effect that such
sale or transfer is exempt from the registration requirements of the Securities
Act.
(b) Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for a transfer made in accordance with Rule 144 under
the Securities Act.
(c) Each certificate representing the Registrable Securities shall bear
a legend substantially in the following form:
The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be
offered, sold, or otherwise transferred, pledged, or hypothecated
unless and until such shares are registered under such Act or an
opinion of counsel reasonably satisfactory to the Company is
obtained to the effect that such registration is not required.
Additionally, the transfer of these shares is subject to the
conditions specified in the Registration Rights Agreement dated as
of May 13, 1997, between Regeneron Pharmaceuticals, Inc. and The
Procter & Company, and no transfer of these shares shall be valid or
effective until such conditions have been fulfilled. Upon the
fulfillment of such conditions, Regeneron Pharmaceuticals, Inc., has
agreed to deliver to the holder hereof a new certificate for the
shares represented hereby registered in the name of the holder
hereof. Copies of such agreement may be obtained at no cost by
written request made by the holder of record of this certificate to
the secretary of Regeneron Pharmaceuticals, Inc.
The foregoing legend shall be removed from the certificates representing any
Registrable Securities, at the request of the holder thereof, at such time as
such shares become eligible for resale pursuant to Rule 144(k) under the
Securities Act or such shares become publicly tradable pursuant to an effective
Registration Statement.
3. Demand Registrations.
3.1 Demand by Holders. The holders of a majority of Registrable
Securities, at any time from and after the third anniversary of the Effective
Date, may make a total of two written requests to the Company for Registration
of Registrable Securities under and in accordance with the provisions of the
Securities Act of all or part of the Registrable Securities. Any such
Registration requested shall hereinafter be referred to as a "Demand
Registration." Each request for a Demand Registration shall specify the kind and
aggregate amount of Registrable Securities to be registered and the intended
methods of disposition thereof. Upon such request for a Demand Registration, the
Company shall use its best efforts to promptly effect the Registration of such
Registrable Securities under (i) the Securities Act, and (ii) subject to Section
6, the blue sky laws of such jurisdictions as any holder of such Registrable
Securities requesting such Registration or any underwriter, if any, may
reasonably request. The Company shall also use its best efforts to have all such
Registrable Securities registered with or approved by such other federal or
state governmental agencies or authorities as may be necessary in the opinion of
counsel to the Company and counsel to the holders of a majority of such
Registrable Securities to consummate the disposition of such Registrable
Securities.
Notwithstanding the foregoing, the Company shall not be obligated to
effect a Demand Registration if all (but not less than all) of the shares
requested to be registered could
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immediately be sold by such holders under Rule 144 under the Securities
Act at a price substantially equivalent to the prevailing market price.
The final determination of whether all of the shares could immediately
be sold under Rule 144 shall be made in good faith by counsel for
holders of the Registrable Securities after, among other things,
considering the possible affiliate status of any such holder. The
Company shall have the burden of establishing that the shares could
immediately be sold at a price substantially equivalent to the
prevailing market price. Any request for a Demand Registration not
effected pursuant to the provisions of this paragraph shall not count
against the two requests specified in the preceding paragraph.
3.2 Effective Registration. Subject to the last paragraph of Section
6, the Company shall be deemed to have effected a Demand Registration if the
Registration Statement relating to such Demand Registration is declared
effective by the SEC and remains effective for at least 90 days; provided,
however, that no Demand Registration shall be deemed to have been effected if
(i) such registration, after it has become effective, is interfered with by any
stop order, injunction or other order or requirement of the SEC or other
governmental agency or court for any reason not attributable to the selling
holders of Registrable Securities, or (ii) the conditions to closing specified
in the purchase agreement or underwriting agreement entered into in connection
with such registration are not satisfied, other than by reason of a failure on
the part of the selling holders of Registrable Securities or any underwriter
referred to in Section 3.4.
3.3 Registration Statement Form. Registrations under this Section 3
shall be on such appropriate registration form of the SEC as shall permit the
disposition of such Registrable Securities in accordance with the intended
method or methods of disposition specified in such holders' requests for such
Registration. If, in connection with any Registration under this Section 3 which
is proposed by the Company to be on Form S-3 or any successor form to such Form,
the managing underwriter (if any) or holders of a majority of the Registrable
Securities requesting a Demand Registration shall advise the Company in writing
that in its opinion additional disclosure not required by such form is of
material importance to the success of the offering, then such Registration shall
include such additional disclosure.
3.4 Selection of Underwriters. If at any time or from time to time
during the time period applicable to Demand Registrations any of the holders of
the Registrable Securities covered by a Registration Statement desire to sell
Registrable Securities in an Underwritten Offering, the investment banker or
investment bankers that will manage the offering will be selected as follows:
(a) Managing Underwriter. A majority of the holders of
Registrable Securities shall select three (or, if such holder(s) desires, more
than three) nationally recognized investment banking firms as candidates for the
offering, each of which is ready, willing and able to act as the managing
underwriter, and shall provide a list of such candidates to the Company. Not
later than five business days following the receipt of such list, the Company
shall: (i) choose one of three candidates to act as the managing underwriter for
the offering and (ii) notify the holders of a majority of Registrable Securities
of such choice.
(b) Co-Managers. The investment banking firm(s), if any, that
will serve as co-manager(s) of the offering will be selected by holders of a
majority of Registrable Securities.
3.5 Registration of Other Securities. Whenever the Company shall
effect a Registration pursuant to this Section 3 in connection with an
Underwritten Offering by one or more holders of Registrable Securities, no
securities other than Registrable Securities shall be included among the
securities covered by such Registration if the managing underwriter of such
offering shall have advised each selling holder of Registrable Securities to be
covered by such Registration in writing (with a copy to the Company) that, in
its opinion, the number of securities requested to
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be included in such Registration exceeds the number which can be sold in
such offering within a price range acceptable to the selling holders of
a majority of the Registrable Securities requested to be included in
such Registration. If no such notice or letter is provided, the Company
may include shares of Common Stock for its own account or for the
account of other shareholders of the Company having the right to include
such shares in a Registration Statement filed by the Company with the
SEC.
3.6 Priority Among Holders of Registrable Securities in Requested
Registration. If the managing underwriter of an Underwritten Offering pursuant
to this Section 3 advises each of the holders of Registrable Securities in
writing (with a copy to the Company) that less than all of the Registrable
Securities proposed to be included in such offering should be included (using
the same standard described in subsection 3.5 hereof), then the amount of
Registrable Securities to be offered for the accounts of holders of Registrable
Securities shall be reduced pro rata, based on the number of Registrable
Securities owned by such holders.
3.6 Delay of Requested Registration. Notwithstanding anything to the
contrary contained in this Section 3, if following a request for a Demand
Registration the Company provides prompt written notification to all holders of
Registrable Securities specifying the nature of any Delay Event described below,
then the filing of the Registration Statement pursuant to the request for Demand
Registration may be delayed by the Company for a period not to exceed six months
from the date of its receipt of the written request for the Demand Registration
or such shorter period provided below; provided, however, that such right to
delay a request may be exercised by the Company not more than once in any two
year period. A "Delay Event" shall be defined as any of the following: (1) the
Company will file within 60 days following its receipt of the written request
for Demand Registration, a Registration Statement for the public offering of
securities for the account of the Company; (2) if the Securities Act or the
rules or regulations thereunder, or the form on which the Registration Statement
for the Demand Registration is to be filed, requires the filing of financial
statements which are not yet available (in which case, the Company shall prepare
or cause such statements to be prepared in a reasonably timely and diligent
manner and promptly thereafter file the Registration Statement); (3) at the time
of the request for Demand Registration, the Company is engaged in a material
transaction or has an undisclosed material corporate development, and in either
case, which would be required to be disclosed under the federal securities laws
in the Registration Statement, but the Company's Board of Directors has made a
good faith determination that making such disclosure at such time would
materially adversely affect such transaction or development (in which case, the
Company shall disclose the matter as promptly as practicable and promptly
thereafter file the Registration Statement); or (4) at the time of the request
of the Demand Registration, the Company is engaged in any financing (except the
type described in clause (1) above) (in which case the Company shall file the
Registration Statement no later than 30 days following its receipt of the
written request for Demand Registration).
4. Piggyback Registrations.
4.1 Participation. Subject to Section 4.2 hereof, if at any time from
and after the third anniversary of the Effective Date, the Company proposes to
file a Registration Statement under the Securities Act with respect to any
offering of any of its shares of Common Stock, whether or not by the Company for
its own account (other than (i) a registration on Form S-4 (or otherwise in
connection with non-cash offerings, exchange offers, mergers or
recapitalizations) or S-8 or any successor form to such Forms, or (ii) any
registration of securities as it relates to an offering and sale to directors or
employees of, or non-employee service providers to, the Company under bona fide
benefits plans adopted by the Board of Directors of the Company and approved by
the holders of Common Stock when required by law), then, as promptly as
practicable, the Company shall give written notice of such proposed filing to
each holder of Registrable Securities
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and such notice shall offer the holders of Registrable Securities the
opportunity to register such number of Registrable Securities as each
such holder may request (a "Piggyback Registration"). Subject to Section
4.2, the Company shall include in such Registration Statement all
Registrable Securities requested within 15 days after the receipt of any
such notice (which request shall specify the Registrable Securities
intended to be disposed of by such holder) to be included in the
Registration for such offering pursuant to a Piggyback Registration.
Notwithstanding the foregoing, the Company shall not be obligated to
include in a Piggyback Registration the shares of Registrable Securities
requested to be included by a holder of Registrable Securities if: (i)
all (but not less than all) of the shares requested to be included by
that holder could immediately be sold by that holder under Rule 144
under the Securities Act at a price substantially equivalent to the
prevailing market price and (ii) the Company provides to that holder a
written waiver and consent allowing such holder to sell or otherwise
dispose of all of such shares requested to be included without
limitation to the restrictions imposed by Section 5.1 hereof. The final
determination of whether all of the shares could immediately be sold
under Rule 144 shall be made in good faith by counsel for such holder
after, among other things, considering the possible affiliate status of
such holder. The Company shall have the burden of establishing that the
shares could immediately be sold at a price substantially equivalent to
the prevailing market price. Each holder of Registrable Securities shall
be permitted to withdraw all or part of such holder's Registrable
Securities from a Piggyback Registration at any time prior to the
effective date thereof.
4.2 Underwriter's Cutback. The Company shall use its best efforts to
cause the managing underwriter or underwriters of a proposed Underwritten
Offering to permit the Registrable Securities requested to be included in the
Registration for such offering under Section 4.1 (the "Piggyback Securities"),
to be included on the same terms and conditions as any similar securities
included therein. Notwithstanding the foregoing, if the managing underwriter of
any such proposed Underwritten Offering informs the Company and the holders of
such Piggyback Securities in writing that, in its opinion, the number of shares
of Common Stock (including the Piggyback Securities) requested to be included in
such Registration exceeds the number which can be sold in such offering within a
price range acceptable to the party who has requested the filing of the
Registration Statement (the Company or other holders of the Company's Common
Stock, as the case may be, hereafter referred to as the "Requesting Party"),
then the shares of Common Stock to be included in such Registration shall be the
number that can be sold within a price range acceptable to the Requesting Party,
selected (i) first, from the shares of Common Stock originally proposed by the
Requesting Party to be included in the Registration for such offering, (ii)
second, and only if all the shares of Common Stock referenced in clause (i) have
been included, from shares of Common Stock subject to piggyback registration
rights originally proposed to be included by all holders of shares of Common
Stock (other than the Requesting Party), selected pro rata based upon the total
ownership of such shares of Common Stock subject to piggyback registration
rights of such holders, and (iii) third, and only if all of the shares of Common
Stock referenced in clause (ii) have been included, from any other securities
eligible for inclusion in such Registration.
4.3 No Effect on Demand Registrations. No Registration of Registrable
Securities effected pursuant to a request under this Section 4 shall be deemed
to have been effected pursuant to Section 3 hereof or shall relieve the Company
of its obligation to effect any Registration upon request under Section 3
hereof.
5. Hold-Back Agreements.
5.1 Restrictions Applicable to Company Registration.
(a) Restrictions Applicable to Holders of Registrable Securities. Each
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holder of Registrable Securities, if requested by the Company and, in the
case of an Underwritten Offering, the managing underwriters, shall agree not to
sell, transfer or otherwise dispose of any Registrable Securities or other
equity securities (or any securities convertible, exchangeable or exercisable
for such equity securities) of the Company beneficially owned by it (except, in
either case, those that are included in a Piggyback Registration) for a
specified period of time (the "Holdback Period") in the event that the Company
notifies such holder that it desires to file a Registration Statement (the
"Company Registration Statement") to register the sale of shares of Common Stock
(or any securities convertible, exchangeable or exercisable for such Common
Stock) (other than a Registration referred to in clause (i) or (ii) of Section
4.1. The Holdback Period shall commence on the date the Company Registration
Statement is declared effective by the SEC and shall terminate 120 days
thereafter. A written agreement (the "Lock Up") memorializing each such holder's
agreement to the foregoing restrictions shall be executed in a form reasonably
satisfactory to the Company and, if applicable, the managing underwriters.
(b) Restrictions Applicable to Officers, Directors and Other
Stockholders. As a condition to each holder's delivery of the Lock Up pursuant
to Section 5.1., the Company shall use its best efforts to obtain from each of
its: (i) officers, (ii) directors and (iii) shareholders beneficially owning at
least as many shares of Common Stock as the aggregate number of shares
beneficially owned by the holders of Registrable Securities, a written agreement
substantially similar to the Lock Up pursuant to which each such Person shall
agree not to sell, transfer or otherwise dispose of any equity securities (or
any securities convertible, exchangeable or exercisable for such equity
securities) of the Company beneficially owned by it under the same terms as the
Lock Up (excluding shares that are included in a Piggyback Registration);
provided however, that each of the officers and directors may sell, transfer or
dispose of during the Holdback Period the amount of equity securities of the
Company that each would be permitted to sell under Rule 144 during a 90 day
period commencing on the effective date of the Company Registration Statement.
5.2 Restrictions Applicable to Demand Registration. The following
restrictions on the sale, transfer or other disposition of the Company's equity
securities (or any securities convertible, exchangeable or exercisable for such
equity securities) by the Company, its officers and directors, certain other
shareholders and holders of Registrable Securities shall apply in the event of a
Demand Registration:
(a) Registration Restrictions Applicable to the Company. The
Company, if requested by the holders of a majority of Registrable Securities
and, in the case of an Underwritten Offering, the managing underwriters, shall
agree not to effect any public sale or distribution of its equity securities (or
any securities convertible, exchangeable, or exercisable for such equity
securities) (except those that may be included in a Piggyback Registration) or
any private offer, sale or distribution of its equity securities (or any
securities convertible, exchangeable or exercisable for such equity securities)
that may be integrated under the federal securities laws or the regulations
thereunder with a Demand Registration, for the Demand Registration Holdback
Period in the event of a Demand Registration. The "Demand Registration Holdback
Period" shall be defined as the period commencing on the date that the
Registration Statement for the Demand Registration is declared effective by the
SEC and shall terminate 120 days thereafter. A written agreement memorializing
the Company's agreement to the foregoing restrictions shall be executed in a
form reasonably satisfactory to the holders of a majority of Registrable
Securities and, if applicable, the managing underwriters.
(b) Restrictions Applicable to Officers and Directors. The
Company, if requested by the holders of a majority of Registrable Securities
and, in the case of an Underwritten Offering, the managing underwriters, shall
cause Xx. Xxxxxxx Xxxxxxxxx (so long as he remains the Chief Executive Officer
of the Company), and shall use its best efforts to cause each of its other
officers and directors, to agree not to sell, transfer or otherwise dispose of
any equity securities (or
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any securities convertible, exchangeable, or exercisable for such equity
securities) of the Company beneficially owned by each such Person
(except those that may be included in a Piggyback Registration) during
the Demand Registration Holdback Period in the event of a Demand
Registration; provided, however, that all such officers and directors in
the aggregate may sell, transfer or otherwise dispose of an aggregate of
up to five percent of the total number of shares included in the Demand
Registration. A written agreement memorializing each such Person's
agreement to the foregoing restrictions shall be executed in a form
reasonably satisfactory to the holders of a majority of Registrable
Securities and, if applicable, the managing underwriters.
(c) Restrictions Applicable to Other Stockholders. The Company,
if requested by the holders of a majority of Registrable Securities and, in the
case of an Underwritten Offering, the managing underwriters, shall cause each
holder of its privately placed equity securities (or any securities convertible,
exchangeable, or exercisable for such equity securities) issued by the Company
at any time on or after the date of this Agreement to agree (for the benefit of
the holders of Registrable Securities) not to effect any public sale or
distribution of any such securities during the Demand Registration Holdback
Period in the event of a Demand Registration. In addition, the Company shall use
its best efforts to cause each such other shareholder of the Company
beneficially owning at least five percent of the Company's then outstanding
equity securities (or any securities convertible, exchangeable, or exercisable
for such equity securities) to agree not to effect any public sale or
distribution of equity securities (or any securities convertible, exchangeable,
or exercisable for such equity securities) of the Company during the Demand
Registration Holdback Period in the event of a Demand Registration. A written
agreement memorializing each such Person's agreement to the foregoing
restrictions shall be executed in a form reasonably satisfactory to the holders
of a majority of Registrable Securities and, if applicable, the managing
underwriters.
(c) Restrictions Applicable to the Holders of Registrable
Securities. The holders of the Registrable Securities shall not sell, transfer
or otherwise dispose of any equity securities (or any securities convertible,
exchangeable or exercisable for such equity securities) of the Company
beneficially owned by them during a Demand Registration Holdback Period in the
event of any Demand Registration, except for those securities included in the
Demand Registration.
6. Registration Procedures. If and whenever the Company is required by
the provisions of this Agreement to use its best efforts to effect the
registration of any of the Registrable Securities under the Securities Act, the
Company shall:
(a) file with the Commission a Registration Statement with respect to
such Registrable Securities and use reasonable efforts to cause the Registration
Statement to become and remain effective;
(b) prepare and file with the Commission any amendments and
supplements to the Registration Statement and the prospectus included in the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act and keep the Registration Statement effective for a period of not
less than one hundred twenty (120) days from the effective date;
(c) furnish to the Purchaser such reasonable numbers of copies of the
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as the Purchaser
may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities owned by the Purchaser.
If the Company has delivered preliminary or final prospectuses to the
Purchaser and after having done so the prospectus is amended to comply with the
requirements of the Securities Act, the Company shall promptly notify the
Purchaser and, if requested, the Purchaser shall
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immediately cease making offers of Registrable Securities and return all
prospectuses to the Company. The Company shall promptly provide the
Purchaser with revised prospectuses and, following receipt of the
revised prospectuses, the Purchaser shall be free to resume making
offers of the Registrable Securities;
(d) use its best efforts to register or qualify the Registrable
Securities covered by the Registration Statement under securities or Blue Sky
laws of such states as the Purchaser shall reasonably request, and do any and
all other acts and things that may be necessary or desirable to enable the
Purchaser to consummate the public sale or other disposition in such states of
the Registrable Securities owned by the Purchaser; provided, however, that the
Company shall not be required in connection with this paragraph (d) to qualify
as a foreign corporation or execute a general consent to service of process in
any jurisdiction, nor shall it be required to comply with any Blue Sky or other
laws, rules or regulations of any jurisdiction for which compliance or other
requirements are, in the reasonable judgment of the Company, unduly burdensome
or would require any material adjustments in any terms of the offering or in the
offering documents; and
(e) In the event of an underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. The Purchaser shall also
enter into and perform its obligations under such agreement.
(f) Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Company of
the happening of the existence of any fact which results in the Registration
Statement, the Prospectus or any documents incorporated therein by reference
containing an untrue statement of material fact or omitting to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, such holder will forthwith discontinue disposition of
Registrable Securities until such holder's receipt of the copies of such
supplemented or amended Prospectus as corrects such misstatement or omission, or
until it is advised in writing by the Company that the use of the Prospectus may
be resumed, and has received copies of any additional or supplemental filings
which are incorporated by reference in the Prospectus, and, if so directed by
the Company, such holder will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such holder's possession,
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such notice, the
time periods during which such Registration Statement shall be maintained
effective shall be extended by the number of days during the period from and
including the date of the giving of such notice to and including the date when
each seller of Registrable Securities covered by such Registration Statement
either receives the copies of the supplemented or amended prospectus that
corrects such misstatement or omission or is advised in writing by the Company
that the use of the Prospectus may be resumed.
7. Allocation of Expenses. The Company will indemnify and hold the
Purchaser harmless for the payment of all Registration Expenses of all
registrations under this Agreement, except as set forth in this
Agreement. The term Registration Expenses shall mean all expenses
incurred by the Company in complying with Section 3 or 4, including,
without limitation, all registration and filing fees, exchange listing
fees, printing expenses, fee; and disbursements of counsel for the
Company and the Purchaser, state Blue Sky fees and expenses (except
that: the Purchaser shall not cause or request the filing for Blue Sky
approval in any state reasonably refused by the Company), and the
expenses of any special audits incident to or required by any such
registration, but excluding underwriting discounts and selling
commissions.
In connection with each Registration Statement required hereunder, the
Company will reimburse the holders of Registrable Securities being
registered pursuant to such Registration
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Statement for the reasonable fees and disbursements of not more than one
counsel chosen by the holders of a majority of such Registrable
Securities.
Each seller of Registrable Securities shall pay all discounts, commissions,
fees and expenses of the underwriters, selling brokers, dealer managers, and
similar industry professionals relating to the distribution of its Registrable
Securities.
8. Indemnification. In the event of any registration of any of the
Registrable Securities under the Securities Act pursuant to this Agreement, the
Company will indemnify and hold harmless the Purchaser, and each of its officers
and directors, and each other person, if any, who controls the Purchaser, within
the meaning of the Securities Act or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which the Purchaser or
controlling person may become subject under the Securities Act, the Exchange
Act, state securities or Blue Sky laws or otherwise, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement under which such Registrable
Securities were registered under the Securities Act, any preliminary prospectus
or final prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arise out of or are based upon the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or arise out
of or are based upon any violation by the Company of the Securities Act in
connection with such registration; and the Company will reimburse the Purchaser,
officer, director, and each such controlling person for any legal or any other
expenses reasonably incurred by the Purchaser, officer, director, or controlling
person in connection with the investigating or defending of any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or omission made
in such Registration Statement, preliminary prospectus or prospectus, or any
such amendment or supplement, in reliance upon and in conformity with
information furnished to the Company, in writing, by or on behalf of the
Purchaser, officer, director, underwriter, or controlling person specifically
for use in the preparation thereof.
In the event of any registration of any of the Registrable Securities
under the Securities Act pursuant to this Agreement, the Purchaser will
indemnify and hold harmless the Company, each of its directors and officers and
each underwriter (if any) and each person, if any, who controls the Company or
any such underwriter within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages, or liabilities, joint or several, to
which the Company, such directors and officers, underwriter or controlling
person may become subject under the Securities Act, Exchange Act, state
securities or Blue Sky laws or otherwise, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement under which such Registrable Securities
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or arise out of or are based
upon any omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, if
the statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company, by or on behalf of the
Purchaser, specifically for use in connection with the preparation of such
Registration Statement, prospectus, amendment, or supplement; provided, however,
that the obligations of the Purchaser hereunder shall be limited to an amount
equal to the proceeds of the Registrable Securities sold as contemplated herein;
provided, further, that, with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus, the
indemnity agreement contained in this Section 8 shall not apply to the extent
that any loss, claim, damage or liability results from the fact that a current
copy of the
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prospectus was not sent or given to the person asserting any such loss,
claim, damage, or liability at or prior to the written confirmation of
the sale of the Registrable Securities confirmed to such person if it is
determined that it was the responsibility of the Company, any of its
directors, officers or agents to provide such person with a current copy
of the prospectus and such current copy of the prospectus would have
cured the defect giving rise to such loss, claim, damage or liability.
Each party entitled to indemnification under this Section 8 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 8. The Indemnified Party may participate in such
defense at such party's expense provided, however, that the Indemnifying Party
shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party, in
the defense of any such claim or litigation, shall except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party.
If the indemnification provided for in this Section 8 is held by a court of
competent jurisdiction to be unavailable to an Indemnified Party, then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party thereunder,
hereby agrees to contribute to the amount paid or payable by such Indemnified
Party in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other.
Notwithstanding the foregoing, the amount the Purchaser shall be obliged to
contribute pursuant to this paragraph of Section 8 shall be limited to an amount
equal to the public offering sale price of the shares sold by the Purchaser.
9. Information by Holder. The Purchaser shall furnish to the Company such
information regarding the Purchaser and the distribution proposed by the
Purchaser as the Company may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
Section 3 or 4.
No Person may participate in any Underwritten Registration hereunder unless
such Person (a) agrees to sell such Person's securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements, and other documents
required under the terms of such underwriting arrangements.
10. Rule 144 Requirements. The Company agrees to use reasonable efforts
to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
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(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to the Purchaser upon request a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company as the Purchaser may reasonably request to avail itself of any
similar rule or regulation of the Commission allowing it to sell all or any
portion of the Registrable Securities without registration.
11. Standstill Agreement.
11.1 Except as hereinafter set forth in subsection 11.2, the Purchaser
agrees, for itself and its Affiliates, whether now or hereafter created or
acquired, and any of the Purchaser's pension plans or employee benefit plan
programs sponsored by the Purchaser for which the Purchaser controls its
investment decisions, that it will not, until the earlier of (x) the termination
of the Collaboration Agreement or (y) twenty (20) years from the date of this
Agreement, without the prior written consent of the Company;
(i) directly or indirectly acquire or own beneficially and/or of
record more than twenty (20%) percent of the Then Outstanding Capital Stock of
the Company (as hereinafter defined). For purposes of this Section 11, the Then
Outstanding Capital Stock of the Company shall be deemed to be the total number
of shares of the Company's issued and outstanding Common Stock and all shares of
Common Stock (a) into which any issued and outstanding shares of preferred stock
and any other securities exchangeable or convertible into Common Stock are
exchangeable or convertible and (b) for which any issued, outstanding, and
exercisable options or warrants to acquire Common Stock are then exercisable, as
well as all capital stock issued as a result of any stock split, stock dividend,
or reclassifications of Common Stock distributable, on a pro rata basis, to all
holders of Common Stock or securities convertible into Common Stock;
(ii) directly or indirectly, solicit proxies or consents or become a
participant in a solicitation (as such terms are defined in Regulation 14A under
the Exchange Act) in opposition to the recommendation of the majority of the
Board of Directors of the Company with respect to any matter, or seek to advise
or influence any person, with respect to the voting of any securities of the
Company or any of its subsidiaries;
(iii) propose or induce any other person to propose, directly or
indirectly, (x) any merger or business combination involving the Company or any
of its subsidiaries, (y) the purchase or sale of any assets of the Company or
any of its subsidiaries or (z) the purchase of any of the voting securities of
the Company, by tender offer or otherwise (except pursuant to the exercise of
rights, warrants, options, or similar securities distributed by the Company to
holders of voting securities generally);
(iv) deposit any voting securities in a voting trust or subject any
voting securities to any arrangement or agreement with respect to the voting of
voting securities; or
(v) advise, assist, or encourage any other person in connection with
any of the foregoing.
11.2 The Purchaser will be relieved of the restrictions set forth in
subsection 11.1 of this Agreement only under the following circumstances and for
the specific transactions as set forth herein below:
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(i) if a third party, not an Affiliate of the Purchaser, directly
or indirectly makes a bona fide tender offer or other bona fide offer for more
than twenty (20%) percent but not more than fifty (50%) percent of the Company's
Then Outstanding Capital Stock, and said third party has, in the reasonable
opinion of the Purchaser, the financial resources, ability and intention to
carry out such offer, the Purchaser shall not be prohibited from purchasing or
conducting a tender offer for an amount of shares equal to the amount of shares
sought out be acquired by the third party during the period of its tender offer;
(ii) if a third party, not an Affiliate of the Purchaser, directly or
indirectly makes a bona fide tender offer or other bona fide offer for more than
fifty (50%) percent of the Company's Then Outstanding Capital Stock and said
third party has, in the reasonable opinion of the Purchaser, the financial
resources, ability and intention to carry out such offer, the Purchaser shall
not be prohibited from purchasing or conducting a tender offer for all or less
than all of the Then Outstanding Capital Stock it does not already own during
the period of the third party's tender offer; or
(iii) in the event the Company hereafter issues to a third party more
than seven (7%) percent of its Then Outstanding Capital Stock pursuant
to a negotiated written transaction without requiring such third party
to enter into a standstill agreement with provisions substantially as
restrictive as those set forth in this Section 11, then Purchaser shall
be relieved from its obligations hereunder.
11.3 At the time that the Board of Directors of the Company makes a
decision to put the Company up for sale and to entertain bids in connection with
such sale, the Company shall promptly notify the Purchaser of such decision and
in the event that the Company is entertaining a merger proposal or acquisition
proposal which would result in the Company being merged with and into or
acquired by another corporation and such negotiations have reached a state of
finality that the Company believes a public announcement is warranted, the
Company shall forthwith notify the Purchaser of the material terms of such
proposed merger or acquisition which have been agreed upon. Purchaser's rights
under this subsection shall be limited solely to notification. The Company's
obligations under this Section 11 including without limitation this subsection
11.3 shall terminate upon the termination of the Collaboration Agreement.
11.4 The parties hereto acknowledge and agree that the Company would be
irreparably damaged in the event that any of the provisions of this Section 11
are not performed in accordance with their specific terms or are otherwise
breached and that monetary damages are not an adequate remedy for said breach.
It is, accordingly, agreed that the Company shall be entitled to injunctive
relief to prevent breaches of this Section 11 by Purchaser and/or its
Affiliates, and to specifically enforce this Section 11 and the terms and
provisions thereof, in addition to any other remedy to which such aggrieved
party may be entitled, at law or in equity. The Company may enter a stop
transfer order with respect to the transfer of voting securities except in
compliance with the termination of this Agreement.
11.5 The Company shall give Purchaser prompt notice of the receipt by the
Company of any Schedule 13-D filing from any person or Group (within the meaning
of the Exchange Act) couched in such terms as to put the Company reasonably on
notice of the likelihood that such person or Group has acquired or is proposing
to acquire any shares of Common Stock which results in, or, if successful, would
result in, such person or Group owning or having the right to acquire more than
twenty percent (20%) of the Company's Then Outstanding Capital Stock.
11.6 If Purchaser desires at some date to account for its investment
in the Company pursuant to the equity method, the Company shall promptly furnish
the Purchaser, at Purchaser's sole expense, which estimated expense shall be
prepaid by Purchaser if so requested
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by the Company, all information that is required by generally accepted
accounting principles to enable Purchaser to so account. To the extent
reasonably available to the Company and to the extent reasonably
requested by Purchaser, the Company shall provide information (and shall
cause its employees, independent public accountants, and other
representatives to do the same), to the extent reasonably available
regarding the Company's to, and otherwise cooperate with, Purchaser so
as to enable Purchaser to prepare financial statements in accordance
with accounting principles generally accepted in the United States and
to comply with its reporting requirements and other disclosure
obligations under applicable United States securities laws and
regulations (the "Regulations"). Purchaser agrees to hold all such
information in at least the same degree of confidence as it would hold
similar information regarding its operations and condition, and to
disclose it only to the extent required by the Regulations, provided
that there shall be no restriction on Purchaser's right to disclose its
own financial statements, whether or not reflecting or including such
information.
11.7 All purchases of securities of the Company by Purchaser shall be
made in compliance with applicable laws and regulations.
11.8 During the term of the Collaboration Agreement, Purchaser agrees,
for itself and its Affiliates, whether now or hereafter created or
acquired, and any of the Purchaser's pension plans or employee benefit
plan programs sponsored by the Purchaser for which the Purchaser
controls its investment decisions, that it will not, directly or
indirectly, by action or inaction, use its voting power (by itself or in
concert with others) to cause any Key Man of the Company (as that term
is used in the Collaboration Agreement) to leave the Company, including,
without limitation, voting against the election or reelection of any Key
Man to serve as a member of the Board of Directors of the Company.
12. Amendments and Waivers. This Agreement may be amended, modified,
supplemented or waived only with the written consent of the parties hereto.
13. Notices. Except as otherwise provided in this Agreement, all notices,
requests and other communications to any Person provided for hereunder shall be
in writing and shall be given to (a) in the case of the Company, at 000 Xxx Xxx
Xxxx Xxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000, attention: President, with a copy to
the attention of General Counsel and Corporate Secretary or (b) in the case of
the Purchaser, at Xxx Xxxxxxx & Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxx 00000, attention:
President, with a copy to the attention of General Counsel. Each such notice,
request or other communication shall be effective (i) if given by mail, 72 hours
after such communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (ii) if given by any other means (including,
without limitation, by air courier), when delivered at the address specified
above.
14. Successors and Assigns. The provisions of this Agreement, including the
rights and obligations hereunder, shall be binding upon, and inure to the
benefit of, the respective successors and assigns of the Purchaser (the
Transferees) and of the Company, provided that such Transferees shall be an
Affiliate of the Purchaser, and such Transferees shall become the Purchaser for
the all purposes of this Agreement.
15. Transfer of Certain Rights.
15.1 The rights and obligations of the Purchaser under this Agreement may
be transferred by the Purchaser to any Affiliate of the Purchaser. The Company
shall be given written
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notice by the Purchaser at the time of such transfer stating the name
and address of the Transferee and identifying the securities with
respect to which such rights are assigned.
15.2 Any Transferee to whom rights are transferred shall, as a
condition to such transfer, deliver to the Company a written instrument pursuant
to which the Transferee agrees to be bound by the obligations imposed upon the
Purchaser hereunder to the same extent as if such Transferee were the Purchaser
hereunder.
16. Descriptive Headings. The descriptive headings of the several sections
and paragraphs of this Agreement are inserted for reference only and shall not
limit or otherwise affect the meaning hereof.
17. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE
GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO
THE PRINCIPLES OF CONFLICTS OF LAWS.
18. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
19. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the Company and the Purchaser relating to the subject
matter hereof and supersedes all prior agreements and understandings relating to
such subject matter.
20. Severability. If any provision of this Agreement, or the application of
such provisions to any Person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
[Signature Page To Follow]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their respective officers thereunto duly authorized as of the
date first above written.
REGENERON PHARMACEUTICALS, INC.
By__________________________________
THE PROCTER & XXXXXX COMPANY
By__________________________________
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