Exhibit 10.1
CUBIST PHARMACEUTICALS, INC.
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT is dated as of the 10th day of
September, 1998 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, 6,065,560 shares
(the "Purchased Shares") of the authorized but unissued shares of common stock,
$.001 par value per share, of the Company (the "Common Stock"), and the Company
desires to issue to the Purchasers, and the Purchasers desire to acquire from
the Company, Common Stock Purchase Warrants exercisable, in the aggregate, for
3,032,783 shares of Common Stock.
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 (and, in addition in the case of Sofinov, a governmental body)
controlled by, controlling or under common control with such party. For this
purpose "control" shall mean direct or indirect beneficial ownership of more
than fifty percent (50%) of the voting or income interest in such corporation or
other business entity (and, in the case of Sofinov, such governmental body).
(b) "Closing " shall have the meaning ascribed to such term in
Section 2.4 hereof.
(c) "Closing Date" means the date of the Closing.
(d) "Exchange Act" means the Securities Exchange Act of 1934,
as amended, and all of the rules and regulations promulgated thereunder.
(e) "Majority Purchasers" means, at the relevant time of
reference thereto, those Purchasers, who at Closing would have the right to
acquire more than fifty percent (50%) of the Purchased Shares, provided that
Sofinov forms part of such group.
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(f) "Majority Other Purchasers" means, at the relevant time of
reference thereto, those Other Purchasers holding more than fifty percent (50%)
of the Purchased Shares and Warrant Shares then held by all of the Other
Purchasers.
(g) "Other Purchasers" means all of the Purchasers listed on
Exhibit A hereto other than Sofinov.
(h) "Registration Rights Agreement" shall mean that certain
Registration Rights Agreement, dated as of the date hereof, among the Company
and the Purchasers.
(i) "SEC" shall mean the Securities and Exchange Commission.
(j) "Securities" shall mean, collectively, the Purchased
Shares, the Warrants and the Warrant Shares.
(k) "Securities Act" shall mean the Securities Act of 1933, as
amended, and all of the rules and regulations promulgated thereunder.
(l) "Shares" shall mean, collectively, the Purchased Shares
and the Warrant Shares.
(m) "Sofinov" means Societe Financiere d'Innovation Inc., a
company organized under the laws of the Province of Quebec.
(n) "Warrants" shall have the meaning ascribed to such term in
Section 2.2 hereof.
(o) "Warrant Shares" means the shares of Common Stock issued
and/or issuable upon exercise of any or all of the Warrants.
2. Purchase and Sale of Purchased Shares; Issuance of Common Stock
Purchase Warrants.
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, the number of shares of Common Stock set forth
opposite the name of such Purchaser under the heading "Number of Purchased
Shares to be Purchased" on Exhibit A hereto, at a purchase price of $2.25 per
share. The total purchase price payable by each Purchaser for the number of
shares of Common Stock that such Purchaser is hereby agreeing to purchase is set
forth opposite the name of such Purchaser under the heading "Purchase Price" on
Exhibit A hereto. The aggregate purchase price payable by all of the Purchasers
to the Company for all of the Purchased Shares shall be $13,647,510.
2.2 Issuance of Common Stock Purchase Warrants. Subject to and
upon the terms and conditions set forth in this Agreement, the Company agrees to
issue to each Purchaser, at the Closing, a Common Stock Purchase Warrant,
substantially in the form attached as Exhibit
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B hereto (each individually, a "Warrant" and, collectively with all Common Stock
Purchase Warrants issued pursuant to this Section 2.2 to the other Purchasers,
the "Warrants"), exercisable for the number of shares of Common Stock set forth
opposite the name of such Purchaser under the heading "Number of Warrant Shares"
on Exhibit A hereto, at an exercise price of $2.25 per share. No additional
consideration shall be payable by any Purchaser in respect of the issuance by
the Company of such Purchaser's Warrant at the Closing.
2.3 Reservation of Warrant Shares. Prior to the Closing Date,
the Company will have duly authorized and reserved, free of preemptive rights
and other preferential rights, an aggregate of 3,032,783 shares of Common Stock
for issuance upon exercise of the Warrants. The Company covenants to continue to
reserve, free of preemptive rights and other preferential rights, a sufficient
number of its authorized but unissued shares of Common Stock for issuance upon
exercise of the Warrants.
2.4 Closing. The closing of the transactions contemplated
under this Agreement (the "Closing") shall take place at the Boston offices of
Xxxxxxx Xxxx LLP, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 at 10:00 a.m.
on the earlier of (i) the second business day after the Company shall have given
written notice (the "Closing Notice") to the Purchasers that it believes all of
the conditions precedent set forth in Section 5.1 have been satisfied in full or
(ii) thirty (30) days from the date hereof, or at such other location, date and
time as may be agreed upon between the Purchasers and the Company. The fact that
the Company shall have given such Closing Notice shall not limit any Purchaser's
right to disagree with such Closing Notice.
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. The Company has no
subsidiaries.
3.2 Capitalization. The authorized capital stock of the
Company consists of (i) 25,000,000 shares of Common Stock, of which 10,581,394
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.
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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, the
Warrants and the Registration Rights 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, the Warrants 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, the Warrants and the Registration Rights Agreement
and to carry out and perform its obligations under the terms of this Agreement,
the Warrants and the Registration Rights Agreement.
3.4 Valid Issuance of the Purchased Shares, Warrants and
Warrant Shares. The Purchased Shares being purchased by the Purchasers hereunder
will, upon issuance pursuant to the terms hereof, be duly authorized and validly
issued, fully paid, nonassessable and free of any liens or encumbrances created
by the Company and will be in compliance with applicable state and federal
securities laws. The Warrants to be issued to the Purchasers hereunder will,
upon issuance pursuant to the terms hereof, be duly authorized, validly issued
and free of any liens or encumbrances created by the Company and will be in
compliance with applicable state and federal securities laws. The reservation,
issuance, sale and delivery by the Company of the Warrant Shares have been duly
authorized by all requisite corporate action of the Company, and the Warrant
Shares have been duly reserved in accordance with Section 2.3 of this Agreement.
The Warrant Shares, upon issuance pursuant to the terms of the Warrants, (i)
will be validly issued, fully paid, nonassessable and free of any liens or
encumbrances created by the Company and, (ii) will be, assuming that at the time
of exercise the holder of such Warrants is an accredited investor and assuming
no change in the applicable state and federal securities laws, in compliance
with applicable state and federal securities laws.
3.5 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, 1997, the Company's Quarterly Report on
Form 10-Q for the three months ended March 31, 1998, the Company's Quarterly
Report on Form 10-Q for the three months ended June 30, 1998, 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 June 30, 1998 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 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
3.5 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
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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,
1997, its Quarterly Report on Form 10-Q for the three months ended March 31,
1998, or its Quarterly Report on Form 10-Q for the three months ended June
30, 1998. 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.
3.6 Financial Statements. The Company's audited Statements of
Income, Stockholders' Equity and Cash Flows for each of the fiscal years ended
December 31, 1996 and 1997 and the Company's audited Balance Sheet as of
December 31, 1997 are included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1997, a copy of which has been delivered to the
Purchasers. The Company's unaudited Statements of Income, Stockholders' Equity
and Cash Flows for the period from January 1, 1998 to June 30, 1998 and the
Company's unaudited Balance Sheet as of June 30, 1998 are included in the
Company's Quarterly Report on Form 10-Q for the three months ended June 30,
1998, a copy of which has been delivered to the Purchasers. All of the financial
statements referred to above in this Section 3.6 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
those Financial Statements that are unaudited may not have been prepared in
accordance with generally accepted accounting principles because of the absence
of footnotes normally contained therein and may be subject to normal year-end
audit adjustments which, individually, and in the aggregate, will not be
material.
3.7 Consents. All consents, approvals, orders, authorizations,
registrations, qualifications, and filings required on the part of the Company
to be obtained or made prior to the Closing in connection with the execution,
delivery or performance of this Agreement, the Warrants and the Registration
Rights Agreement, and the consummation of the transactions contemplated herein
and therein have been obtained or made or will be obtained or made, prior to the
Closing.
3.8 No Conflict. The execution and delivery of this Agreement,
the Warrants 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 or give rise to an event which results in the creation of any lien,
charge or encumbrance upon any of the Company's properties or assets 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.
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3.9 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 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, the Warrants or the Registration Rights Agreement
or the right of the Company to execute, deliver and perform under same.
3.10 Nasdaq National Market. The Common Stock is listed on the
Nasdaq National Market, and there are no proceedings to revoke or suspend such
listing. The sale of the Securities as contemplated hereby will not result in a
violation of the Nasdaq rules and regulations.
3.11 Brokers or Finders. Except for Pacific Growth Equities,
Inc., the Company has not dealt with any broker or finder in connection with the
transactions contemplated by this Agreement, and 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. All fees payable to
Pacific Growth Equities, Inc. will be paid by the Company.
3.12 Compliance With Laws. The Company has complied, and is in
compliance with, all federal, state, county, local and foreign laws, rules,
regulations, ordinances, decrees and orders applicable to the operation of its
business or to the real property or personal property that it owns or leases
(including, without limitation, all such laws, rules, ordinances, decrees and
orders relating to federal food and drug administration, antitrust, consumer
protection, currency exchange, environmental protection, equal opportunity,
health, occupational safety, pension, securities and trading-with-the-enemy
matters), the failure to comply with which would, individually or in the
aggregate, have a material adverse effect on the Company. The Company has not
received any notification of any asserted present or past unremedied failure by
the Company to comply with any of such laws, rules, regulations, ordinances,
decrees or orders.
3.13 Private Offering. During the six months preceding the
date of this Agreement, neither the Company nor any person acting on its behalf
has, directly or through any agent, sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of any security (as defined in the
Securities Act) that is or may be integrated with the sale of the Purchased
Shares and the Warrants in a manner that would require the registration of the
Purchased Shares or the Warrants under the Securities Act. During the six months
preceding the date of this Agreement, neither the Company nor any person acting
on its behalf has offered or sold any Purchased Shares or Warrants by means of
any general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act. Assuming the accuracy of the Purchasers'
representations in Section 4 hereof, the offering and sale of the Purchased
Shares and the Warrants will satisfy the requirements of Rule 506 under the
Securities Act.
3.14 Changes.
(a) Since June 30, 1998, there has not been:
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(i) any damage, destruction or loss (whether or not
covered by insurance) to its assets which has had or is expected to have a
material adverse effect on the Company;
(ii) any material change in the accounting methods or
practices followed by the Company;
(iii) any material debt, obligation or liability
(whether absolute or contingent) incurred by the Company (whether or not
presently outstanding) except (x) current liabilities incurred, and obligations
under agreements entered into, in the ordinary course of business and (y)
obligations or liabilities entered into or incurred in connection with the
execution of this Agreement; or
(iv) any sale, lease, abandonment or other
disposition by the Company of any real property or, other than in the ordinary
course of business, of any equipment or other operating properties or, other
than in the ordinary course of business, any sale, assignment, transfer, license
or other disposition by the Company of any intellectual property or other
intangible asset.
(b) Notwithstanding anything to the contrary in this
Agreement, if, after the date of this Agreement the Company discloses
information concerning an event that renders the representation and warranty set
forth in this Section 3.14 inaccurate, and such information is material and not
otherwise available to the public generally, the Purchasers agree not to sell,
assign or otherwise transfer any of the Securities based on such material
non-public information until such material non-public information is made
available to the public generally. In the event that the Closing contemplated
hereby actually occurs, the Company shall disclose such material non-public
information in the Registration Statement required to be filed pursuant to the
Registration Rights Agreement.
3.15 Material Contracts. Except as set forth on Schedule 3.15
hereto, the contracts listed as exhibits to the Company's Annual Report on Form
10-K for the year ended December 31, 1997, the Company's Quarterly Report on
Form 10-Q for the three months ended March 31, 1998, the Company's Quarterly
Report on Form 10-Q for the three months ended June 30, 1998, are all of the
material contracts (as defined in the Securities Exchange Act of 1934 as
amended) to which the Company is a party or by which it or its assets may be
bound. The Company is, and, to the best of the Company's knowledge, all other
parties to such material contracts are, in compliance in all material respects
with their obligations thereunder.
3.16 Title to Properties and Assets, Liens, etc. The Company
has good and marketable title to its properties and assets, and good title to
its leasehold estates, in each case subject to no mortgage, pledge, lien, lease,
encumbrance, or charge, other than (i) those resulting from taxes which have not
yet become delinquent, (ii) minor liens and encumbrances which do not materially
detract from the value of the property subject thereto or have a material
adverse effect on the Company, and (iii) those that have otherwise arisen in the
ordinary course of business.
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3.17 Patents and Trademarks. To the best of the Company's
knowledge, the Company has sufficient title and ownership of or rights to use
such trade names, copyrights, trade secrets, information, patents, trademarks,
service marks, rights and processes (including all applications therefor) as are
necessary for its business as now conducted and as proposed to be conducted,
without any conflict with or infringement of the rights of others. Except as set
forth in the exhibit list to the Company's 1997 Form 10-K, there are no material
options, licenses, or agreements of any kind relating to the foregoing, nor is
the Company bound by or a party to any material options, licenses or agreements
of any kind with respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, proprietary rights and processes of any
other person or entity. The Company has not received any communications alleging
that the Company has violated or, by conducting its business as now conducted or
proposed, would violate any of the patents, trademarks, service marks, trade
names, copyrights or trade secrets or other proprietary rights of any other
person or entity. The Company is not aware that any of its employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of his or
her best efforts to promote the interests of the Company or that would conflict
with the Company's business as now conducted or proposed to be conducted. To the
best of the Company's knowledge, no person or entity is infringing or
threatening to infringe the patents, trademarks, service marks, trade names,
copyrights or trade secrets or other proprietary rights of the Company. All
employees, officers and directors, other than those employees who are not privy
to any of the Company's confidential information, are bound by confidentiality
and assignment of intellectual property and technology agreements and such
agreements and obligations do not confer on any such person any rights of the
intellectual property of the Company.
3.18 Labor Matters. The Company has no collective bargaining
agreement with any of its employees and, to the Company's knowledge, there is no
labor union organizing activity pending or threatened with respect to the
Company. There are no disputes pending or, to the knowledge of the Company,
threatened between the Company, on the one hand, and any of its employees, on
the other hand, other than employee grievances arising in the ordinary course of
business which would not, individually or in the aggregate, have a material
adverse effect on the Company.
3.19. Form S-3 Eligibility. The Company is eligible to file a
Registration Statement on Form S-3, or any successor form, pursuant to Section
3(a) of the Registration Rights Agreement. The Company is not aware of any facts
that would prevent or destroy such eligibility.
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, partners 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
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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, trust or partnership (as the case may be) 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 the Purchased Shares and the Warrant being acquired by it hereunder,
and will acquire any Warrant Shares issued by the Company upon exercise of such
Purchaser's Warrant, for investment, for its own account, and not for resale or
with a view to distribution thereof in violation of the Securities Act.
4.3 Investor Status; Etc. Such Purchaser certifies and
represents to the Company that, at the time such Purchaser acquires any of the
Purchased Shares and the Warrants, such Purchaser will be an "Accredited
Investor" as defined in Rule 501 of Regulation D promulgated under the
Securities Act. Such Purchaser's financial condition is such that it is able to
bear the risk of holding any and all of the Securities acquired by it 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 the Company and its
business and this investment, and has also been afforded the opportunity to
review any relevant documents and records concerning the business of the
Company. Such Purchaser has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of an
investment in the Company. This representation shall not be deemed to limit the
Company's representations and warranties contained in Section 3 of this
Agreement.
4.4 Securities Not Registered. Such Purchaser understands that
because the Securities are issued by the Company in a transaction exempt from
the registration requirements of the Securities Act, the Securities have not
been registered under the Securities Act, and that the Securities 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 Additional Investment Representations. Such Purchaser
shall deliver to the Company a Certificate of Additional Investment
Representations in the form of Exhibit C hereto (in each case, an "Investment
Representations Certificate"). Such Purchaser acknowledges that the Company is
relying on the truth and accuracy of the representations and warranties
contained in its Investment Representations Certificate in the offering of those
Purchased Shares being offered for sale to such Purchaser without having first
registered such Purchased Shares under the Securities Act.
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4.6 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.
4.7 Consents. All consents, approvals, orders and
authorizations required on the part of such Purchaser in connection with the
execution, delivery or performance of this Agreement and the consummation of the
transactions contemplated herein have been obtained or will be obtained prior to
the Closing.
4.8 Brokers. Such Purchaser has not retained, utilized or been
represented by any broker or finder in connection with the transactions
contemplated by this Agreement.
5. Conditions Precedent.
5.1 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 the Purchased 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.
(b) The Registration Rights Agreement shall have been executed
and delivered by the Company, and the Warrant issuable to such Purchaser
hereunder shall have been executed and delivered to such Purchaser 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) Such Purchaser shall have received from Xxxxxxx Xxxx LLP,
counsel to the Company, an opinion addressed to the Purchasers, dated the
Closing Date and substantially in the form of Exhibit D hereto.
(e) The Company shall not have received a letter from Nasdaq
stating that the approvals obtained by the Company from certain of its
stockholders in connection with the transactions contemplated hereunder do
not satisfy the stockholder approval requirements set forth in Sections
4460(i)(1)(B) and 4460(i)(1)(D)(ii) of the Nasdaq rules and regulations.
(f) Each of DSV Partners IV, International Biotechnology Trust
and Xxxxxxxxx & Xxxxx shall have entered into a Lock-up Agreement in the form of
Exhibit E hereto
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with the Company agreeing not to sell any shares of the Company's Common Stock
within 180 days following the Closing.
(g) No proceeding challenging this Agreement, the Warrants or
the Registration Rights Agreement or the transactions contemplated hereby or
thereby, 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.
(h) The purchase of and payment for the Purchased Shares by
the Purchasers and the issuance of the Warrants to 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 by the Agreement and the Warrants shall have been duly obtained or
made and shall be in full force and effect.
(i) All instruments and corporate proceedings in connection
with the transactions contemplated by this Agreement, the Warrants and the
Registration Rights 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.
(j) The aggregate price paid for Purchased Shares by
Purchasers shall not be less than $12,000,000, a minimum of $3,000,000 of which
shall be paid by Purchasers who were shareholders of the Company prior to the
Closing Date.
(k) The offer and sale of the Purchased Shares and the
Warrants to the Purchasers pursuant to this Agreement shall be exempt from
registration under the Securities Act.
(l) The Company shall have delivered to the Purchasers a
certificate dated as of the Closing Date signed by an authorized officer of the
Company certifying the satisfaction of the conditions set forth in Section
5.1(a) and that the Company has performed all obligations and conditions herein
required to be performed or observed by it on or prior to the Closing Date.
5.2 Conditions to the Obligation of the Company to Consummate
the Closing. The obligation of the Company to consummate the Closing and to
issue to each Purchaser the Purchased Shares and the Warrant to be purchased by
it at the Closing is subject to the satisfaction of the following conditions
precedent:
(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.
(b) Such Purchaser shall have performed all obligations and
conditions herein required to be performed or observed by such Purchaser on or
prior to the Closing Date.
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(c) The Registration Rights Agreement shall have been executed
and delivered by such Purchaser.
(d) Such Purchaser shall have executed and delivered to the
Company such Purchaser's Investment Representations Certificate.
(e) The Company shall not have received a letter from Nasdaq
stating that the approvals obtained by the Company from certain of its
stockholders in connection with the transactions contemplated hereunder do not
satisfy the stockholder approval requirements set forth in Sections
4460(i)(1)(B) and 4460(i)(1)(D)(ii) of the Nasdaq rules and regulations.
(f) 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.
(g) The sale and/or issuance of any of the Securities by the
Company shall not be prohibited by any law or governmental order or regulation.
(h) Such Purchaser shall have delivered to the Company a
certificate dated as of the Closing Date signed by an authorized officer of such
Purchaser certifying the satisfaction of the conditions set forth in Section
5.2(a) and that such Purchaser has performed all obligations and conditions
herein required to be performed or observed by it on or prior to the Closing
Date.
6. Conduct of Business Pending Closing. The Company covenants and
agrees that, between the date of this Agreement and the earlier of the
termination of this Agreement or the Closing Date, unless the Majority
Purchasers shall otherwise agree in writing, the businesses of the Company shall
be conducted only in, and the Company shall not take any action except in, the
ordinary course of business and in a manner consistent with past practice. By
way of amplification and not limitation, except as contemplated by this
Agreement, the Company shall not, between the date of this Agreement and the
earlier of the termination of this Agreement or the Closing Date, directly or
indirectly do, or propose to do, any of the following without the prior written
consent of the Majority Purchasers:
(a) amend or otherwise change the Company's Certificate of
Incorporation or By-laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or
authorize the issuance, sale, pledge, disposition, grant or encumbrance of any
shares of Common Stock, or Preferred Stock, or any options, warrants,
convertible securities or other rights of any kind to acquire shares of Common
Stock or Preferred Stock, or any other ownership interest (including, without
limitation, any phantom interest), of the Company; at a purchase price per share
that is less than the purchase price per Purchased Share to be paid by the
Purchasers:
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock;
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(d) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any corporation, partnership,
other business organization or any division thereof or any material amount of
assets; (ii) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an accommodation
become responsible for, the obligations of any person, or make any loans or
advances, except in the ordinary course of business and consistent with past
practice; (iii) enter into any contract or agreement material to the business,
results of operations or financial condition of the Company other than in the
ordinary course of business, consistent with past practice; (iv) authorize any
capital expenditure; or (v) enter into or amend any contract, agreement,
commitment or arrangement with respect to any matter set forth in this
subsection (e);
(f) sell, assign or otherwise transfer all or substantially
all of the assets of the Company;
(g) take any action, other than reasonable and usual actions
in the ordinary course of business and consistent with past practice, with
respect to accounting policies or procedures;
7. Restrictions on Transfer; Delivery of Purchased Shares and Warrant
Shares.
7.1 Restrictions on Transfer of the Purchased Shares.
(a) No Purchaser shall offer, sell, assign, transfer, endorse,
pledge, mortgage, hypothecate or otherwise convey or dispose of any of the
Purchased Shares purchased by it, or any interest therein, unless (i) any such
offer, sale, assignment, transfer, endorsement, pledge, mortgage, hypothecation
or other conveyance or disposition shall be effected (A) pursuant to and in
conformity with an effective registration statement under the Securities Act (a
"Registered Sale") or any then available exemption from the registration
requirements of the Securities Act, and (B) pursuant to and in conformity with
any applicable state securities or blue sky laws, and (ii) in the case of any
offer, sale, assignment, transfer, endorsement, pledge, mortgage, hypothecation
or other conveyance or disposition other than pursuant to a Registered Sale, if
requested by the Company, such Purchaser shall have obtained and delivered to
the Company a written legal opinion of counsel (reasonably satisfactory to the
Company as to such counsel and as to the substance of such opinion) to the
effect that any such proposed offer, sale, assignment, transfer, endorsement,
pledge, mortgage, hypothecation or other conveyance or disposition by such
Purchaser does not violate the registration provisions of the Securities Act and
any applicable state securities or blue sky law.
(b) No Purchaser shall sell, assign, transfer, endorse,
pledge, mortgage, hypothecate or otherwise convey or dispose of any of the
Purchased Shares purchased by it, or any interest therein, unless the proposed
transferee thereof shall have executed and delivered to the Company a written
agreement or instrument, in form and substance satisfactory to the
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Company, providing for such proposed transferee's written acknowledgment and
agreement that he, she or it shall be bound by all of the provisions of this
Section 7, provided, however, that if such sale, assignment, transfer,
endorsement, pledge, mortgage, hypothecation or other conveyance or disposition
is made pursuant to a Registered Sale or in accordance with Rule 144 of the
Securities Act, such written agreement or instrument shall not be required.
7.2 Effect of Violation of Transfer Restrictions; Preventive
Measures. Any offer, sale, assignment, transfer, endorsement, pledge, mortgage,
hypothecation, or other conveyance or disposition of any Purchased Shares, or of
any interest therein, in violation of this Section 7 shall be null and void. The
Company may make a notation on its records or give instructions to any of its
transfer agents in order to implement the restrictions on transfer set forth in
this Section 7. The Company shall not incur any liability for any delay in
recognizing any transfer of any Purchased Shares if the Company reasonably
believes that any such transfer may have been or would be in violation of the
provisions of the Securities Act, applicable blue sky laws or this Section 7.
7.3 Restrictions on Transfer of the Warrants and the Warrant
Shares. Each Warrant and any Warrant Shares issued and/or issuable upon exercise
of such Warrant shall be subject to the restrictions on transfer set forth in
such Warrant.
7.4 Legends.
(a) Each certificate evidencing any of the Purchased Shares
shall be endorsed with the legend set forth below, and each Purchaser covenants
that, except to the extent such restrictions are waived by the Company, it shall
not transfer the Purchased 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, AS AMENDED, OR
THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD,
ASSIGNED, TRANSFERRED, ENDORSED, PLEDGED, MORTGAGED,
HYPOTHECATED OR OTHERWISE CONVEYED OR DISPOSED OF, UNLESS SUCH
SHARES ARE (1) SO REGISTERED OR (2) AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE AND, IF REQUESTED BY THE COMPANY, A
WRITTEN LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE COMPANY IS PROVIDED BY THE TRANSFEROR. IF THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE NOT TRANSFERRED PURSUANT
TO AND IN CONFORMITY WITH AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 OR IN ACCORDANCE WITH RULE
144 OF THE SECURITIES ACT OF 1933, SUCH SHARES ARE ALSO
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN
SECTION 7 OF A SECURITIES PURCHASE AGREEMENT DATED SEPTEMBER
10, 1998, AND NO TRANSFER OF SUCH SHARES SHALL BE VALID
-15-
OR EFFECTIVE IF IT IS NOT EFFECTED IN COMPLIANCE WITH ALL OF
SUCH RESTRICTIONS ON TRANSFER. A COPY OF SUCH SECURITIES
PURCHASE AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF SUCH SHARES TO THE
SECRETARY OF CUBIST PHARMACEUTICALS, INC."
(b) The Warrants that are issued by the Company shall be
endorsed with the legend set forth below, and each Purchaser covenants that,
except to the extent such restrictions are waived by the Company, it shall not
transfer the Warrants without complying with the restrictions on transfer
described in the legends endorsed on such Warrants:
"NEITHER THIS WARRANT NOR THE SHARES ISSUED OR ISSUABLE UPON
EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
ENDORSED, PLEDGED, MORTGAGED, HYPOTHECATED OR OTHERWISE
CONVEYED OR DISPOSED OF, UNLESS THEY ARE (1) SO REGISTERED OR
(2) AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND IF
REQUESTED BY THE COMPANY, A WRITTEN LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY IS PROVIDED BY THE
TRANSFEROR. THIS WARRANT AND THE SHARES ISSUED OR ISSUABLE
UPON EXERCISE OF THIS WARRANT IF NOT TRANSFERRED PURSUANT TO
AND IN CONFORMITY WITH AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 OR IN ACCORDANCE WITH RULE
144 OF THE SECURITIES ACT OF 1933 ARE ALSO SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 9 OF THIS
WARRANT, AND NO TRANSFER OF THIS WARRANT AND/OR SUCH SHARES
SHALL BE VALID OR EFFECTIVE IF IT IS NOT EFFECTED IN
COMPLIANCE WITH SUCH RESTRICTIONS ON TRANSFER."
(c) Each certificate evidencing any of the Purchased Shares
and each Warrant shall be endorsed with any legend required under any applicable
state securities or blue sky laws.
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7.5 Purchaser Buy-In Rights.
(a) If after receipt from any Purchaser of all of the
documentation necessary to consummate the exercise of such Purchaser's Warrant,
the Company fails to timely deliver the requisite Warrant Shares to such
Purchaser, or as such Purchaser may direct, and, because of such failure to so
timely deliver, (i) such Purchaser consummates a sale through a registered
broker/dealer of the number of shares of Common Stock such Purchaser anticipated
to receive upon exercise of such Purchaser's Warrant (the "Section 7.5(a) Sold
Shares") and (ii) at any time following such sale of the Section 7.5(a) Sold
Shares and the settlement of the transactions relating to such sale of the
Section 7.5(a) Sold Shares, such Purchaser is required by such broker/dealer to
purchase (in an open market transaction or otherwise at the market price then in
effect) shares of Common Stock to replace such Section 7.5(a) Sold Shares (the
"Section 7.5(a) Cover Shares"), then, subject to Section 7.5(c) and 7.5(d)
below, the Company shall pay (in addition to the Company's continuing obligation
to deliver the Warrant Shares) to such Purchaser the amount by which (x) such
Purchaser's total purchase price (including brokerage commissions, if any) for
the Section 7.5(a) Cover Shares shall exceed (y) the net proceeds received by
such Purchaser from the sale of the Section 7.5(a) Sold Shares. In addition, the
Company shall indemnify and save and hold harmless such Purchaser from and
against any and all loss, liability, damage, cost and expense (collectively, the
"Loss") resulting from the foregoing, it being understood that such Loss shall
take into account (i) whether or not the Company subsequently delivers the
requisite Warrant Shares and if delivered, the date on which same are delivered
to such Purchaser, and (ii) any amount previously paid by the Company to such
Purchaser under this Section 7.5(a) in respect of the failure to deliver such
requisite Warrant Shares.
(b) If after receipt by the Company from any Purchaser of all
of the documentation necessary to properly remove the restrictive legends from
any of such Purchaser's Purchased Shares or Warrant Shares, as the case may be,
the Company fails to timely deliver unlegended certificates representing such
Purchased Shares or Warrant Shares, as the case may be, to such Purchaser, or as
such Purchaser may direct, and, because of such failure to so timely deliver,
(i) the Purchaser consummates a sale through a registered broker/dealer of the
number of shares of Common Stock that would have been represented by such
unlegended certificates that the Company failed to deliver to such Purchaser on
a timely basis (the "Section 7.5(b) Sold Shares") and (ii) at any time following
such sale of the Section 7.5(b) Sold Shares and the settlement of the
transactions relating to such sale of the Section 7.5(b) Sold Shares, the
Purchaser is required by such broker/dealer to purchase (in an open market
transaction or otherwise at the market price then in effect) unlegended shares
of Common Stock to replace such Section 7.5(b) Sold Shares (the "Section 7.5(b)
Cover Shares" and, collectively with the Section 7.5(a) Cover Shares, herein
referred to as "Cover Shares"), then, subject to Section 7.5(c) and 7.5(d)
below, the Company shall pay (in addition to the Company's continuing obligation
to deliver unlegended certificates representing the Purchased Shares or Warrant
Shares, as the case may be) to such Purchaser the amount by which (x) such
Purchaser's total purchase price (including brokerage commissions, if any) for
the Section 7.5(b) Cover Shares shall exceed (y) the net proceeds received by
such Purchaser from the sale of the Section 7.5(b) Sold Shares. In addition, the
Company shall indemnify and save and hold harmless such Purchaser from and
against any and all Loss resulting from the foregoing, it being understood that
such Loss shall take into account (i) whether or not the Company subsequently
delivers the requisite unlegended
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certificates representing Purchased Shares and/or Warrant Shares, as the case
may be, and if delivered, the date on which same are delivered to such
Purchaser, and (ii) any amount previously paid by the Company to such Purchaser
under this Section 7.5(b) in respect of the failure to deliver such unlegended
certificates representing Purchased Shares and/or Warrant Shares, as the case
may be.
(c) The Company shall make any payments required by Section
7.5(a) or 7.5(b) within five business days after receipt of written notice from
any Purchaser stating that the purchase by the Purchaser of Cover Shares has
occurred (together with evidence satisfactory to the Company that such purchase
has occurred) and setting forth the calculation of the amount due pursuant to
either Section 7.5(a) or 7.5(b).
(d) Notwithstanding any of the foregoing, the Company shall
not be required to make any payment under Sections 7.5(a) or 7.5(b) in the event
that the Company delivers the Warrant Shares or unlegended certificates
representing Purchased Shares or Warrant Shares, as the case may be, to such
Purchaser prior to the trade date with respect to the purchase of Cover Shares.
(e) Notwithstanding the indemnification obligation provided
for in the last sentence of each of Section 7.5(a) and 7.5(b), in no event shall
the aggregate amount to which any Purchaser shall be entitled to recover from
the Company pursuant thereto exceed the maximum amount which such Purchaser
would have otherwise been entitled to recover from the Company in any suit
brought by such Purchaser against the Company on account of the Company's breach
of its obligation to timely deliver any Warrant Shares to such Purchaser upon
exercise of such Purchaser's Warrant or on account of the Company's breach of
its obligation to timely deliver any unlegended certificates representing any of
such Purchaser's Purchased Shares or Warrant Shares.
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 any Purchaser, upon notice to the Company if the
Closing has not occurred on or prior to October 11, 1998; provided, however,
that the right to terminate this Agreement pursuant to this Section 8(a) shall
not be available to any Purchaser whose failure to fulfill any obligation of
such Purchaser under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or prior to such date; or
(b) by the Company, upon notice to the Purchasers if the
Closing has not occurred on or prior to October 11, 1998; provided, however,
that the right to terminate this Agreement pursuant to this Section 8(b) shall
not be available to the Company if the Company's failure to fulfill any
obligation of the Company under this Agreement has been the cause of, or
resulted in, the failure of the Closing to occur on or prior to such date; or
(c) at any time by mutual agreement of the Company and the
Purchasers; or
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(d) by any Purchaser in respect of the Purchased Shares to be
purchased by such Purchaser, if there has been any material breach of any
representation, warranty or covenant of the Company contained herein and the
same has not been cured prior to October 11, 1998; or
(e) by the Company in respect of the Purchased Shares to be
purchased by a Purchaser, if there has been any material breach of any
representation, warranty or covenant of such Purchaser contained herein and the
same has not been cured prior to October 11, 1998.
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. Notwithstanding the foregoing, no termination
pursuant to this Section 8 shall relieve the Company of its obligation to
reimburse Sofinov for its accountable costs and expenses incurred in
satisfaction of its legal, scientific and patent due diligence and its legal
review of the closing documents.
9. Election of Sofinov Nominee and Other Purchasers' Nominee to Board
of Directors.
9.1 Initial Election of Sofinov Nominee and Other Purchasers'
Nominee to Board of Directors; Obligation to Nominate. The Company shall take
all steps as are necessary and appropriate and otherwise use its best efforts to
cause one individual designated by Sofinov and one individual designated by the
Majority Other Purchasers (which designation shall be made by Sofinov or the
Majority Other Purchasers, as the case may be, in accordance with the provisions
set forth below in this Section 9) (such individual so initially designated by
Sofinov and each other individual from time to time designated by Sofinov
pursuant to, and in accordance with, the provisions set forth below in this
Section 9 in replacement of the individual theretofore designated by Sofinov
being referred to herein as the "Sofinov Nominee"; such individual so initially
designated by the Majority Other Purchasers and each other individual from time
to time designated by the Majority Other Purchasers pursuant to, and in
accordance with, the provisions set forth below in this Section 9 in replacement
of the individual theretofore designated by the Majority Other Purchasers being
referred to herein as the "Other Purchasers' Nominee") to be duly and properly
elected on the Closing Date to a seat on the Board of Directors of the Company.
Thereafter, until the Nomination Termination Date (as defined below in Section
9.4 hereof), 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 Sofinov Nominee and/or the
Other Purchasers' Nominee theretofore serving as a director of the Company
(whether upon the expiration of the Sofinov Nominee's or the Other Purchasers'
Nominee's, as the case may be, term as a director of the Company or otherwise),
the Company shall nominate the Sofinov Nominee and/or the Other Purchasers'
Nominee for election to the Board of Directors.
9.2 Vacancy; Expense Reimbursement; D&O Insurance. Until the
Nomination Termination Date, in the event that the individuals at anytime
serving on the Board of Directors of the Company as the Sofinov Nominee or the
Other Purchasers' Nominee shall, for any reason, cease or be unable so to serve,
the Company shall take all steps as are necessary
-19-
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 Sofinov Nominee or another Other
Purchasers' Nominee, as the case may be. The individuals serving on the Board of
Directors of the Company as the Sofinov Nominee and the Other Purchasers'
Nominee shall be entitled to reimbursement of costs and expenses and payment of
fees on terms no less favorable than those available to other outside directors
of the Company. In addition, the individuals serving on the Board of Directors
of the Company as the Sofinov Nominee and the Other Purchasers' Nominee shall be
entitled to directors' insurance and indemnification coverage on terms no less
favorable than those available to other outside directors of the Company.
9.3 Limitation on Right of Sofinov and Other Purchasers to
Designate. Notwithstanding anything in this Section 9 to the contrary, without
the prior written consent of the Company, in no event shall Sofinov or the
Majority Other Purchasers designate any individual as the Sofinov Nominee or the
Other Purchasers' Nominee, as the case may be, if such individual is an officer,
director, employee, consultant or major stockholder of (A) any business, person
or entity that is a competitor, vendor, supplier or customer of the Company or
(B) any Affiliate of any business, person or entity referred to in the foregoing
clause (A). 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 Sofinov Nominee or the
Other Purchasers' Nominee, as the case may be, 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 Sofinov Nominee or the Other Purchasers' Nominee, as
the case may be.
9.4 Termination. The provisions of this Section 9 shall
automatically terminate on the Nomination Termination Date. The term "Nomination
Termination Date" shall mean (i) with respect to the rights granted to Sofinov
to nominate a Sofinov Nominee under this Section 9, the date on which Sofinov
and/or any of its Affiliates ceases to own at least thirty three and one-third
percent (33 1/3%) of those Purchased Shares purchased by Sofinov at the Closing,
pursuant to this Agreement (subject to proportionate adjustment upon any stock
split, stock dividend, reverse stock split or like event), and (ii) with respect
to the rights granted to the Majority Other Purchasers to nominate an Other
Purchasers' Nominee under this Section 9, the date on which the Other Purchasers
and/or any of their Affiliates cease to own, in the aggregate, at least thirty
three and one-third percent (33 1/3%) of those Purchased Shares purchased by the
Other Purchasers 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
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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 10.1 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 parties, 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, and to use its best efforts to cause the
conditions precedent set forth in Sections 5.1 and 5.2 to be satisfied.
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 courier (overnight or same day) or telecopy or
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 LLP
000 Xxxxxxx Xxxxxx
-00-
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
and
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.
(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.
10.8 Governing Law. 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.
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; provided however, the Company agrees
to reimburse Sofinov for its accountable costs and expenses incurred in
satisfaction of its legal, scientific and patent due diligence review and its
legal review of the closing documents.
10.11 Assignment. The rights and obligations of the parties
hereto shall inure to the benefit of and shall be binding upon the successors
and permitted assigns of each party. No Purchaser may assign its rights or
obligations under this Agreement or designate another person other than an
Affiliate of such Purchaser (i) to perform all or part of such Purchaser's
obligations under this Agreement or (ii) to have all or part of such Purchaser's
rights and benefits under this Agreement, in each case without the prior written
consent of the Company. The Company may not 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 Purchasers. Notwithstanding anything expressed or implied in this
Agreement to the contrary,
-22-
Sofinov's or the Other Purchasers' rights under Section 9 hereof may not be
assigned or transferred to, or exercised by, any other person other than an
Affiliate of Sofinov or such Other Purchasers, respectively.
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 indefinitely, 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; provided, however, that the provisions of
Section 9 of this Agreement may be amended, modified, altered, waived or
changed, in the case of the Sofinov Nominee, with the prior written consent of
the Company and Sofinov, and, in the case of the Other Purchaser's Nominee, with
the prior written consent of the Company and the Majority Other Purchasers.
10.14 Use of Proceeds. The proceeds from the sale of the
Securities hereunder will be used by the Company for working capital and for
general corporate purposes.
10.15 Information Rights. For so long as such Purchaser holds
any of the Securities, the Company shall deliver to each of such Purchaser,
copies of its quarterly and annual disclosure statements (including financial
statements) as filed by the Company with the SEC and all press releases issued
by the Company.
10.16 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
10.17 Listing of Shares. The Company shall list for trading on
the Nasdaq Stock Market a sufficient number of shares to cover the Purchased
Shares and the Warrant Shares.
10.18 Limitation of H&Q Liability. The parties hereto
acknowledge that the names H&Q Healthcare Investors and H&Q Life Sciences
Investors (collectively, the "H&Q Trusts") are the designation of the Trustees
for the time being under Declarations of Trust dated April 21, 1987, as amended,
and February 20, 1992, as amended, respectively, and all persons dealing with
either H&Q Trust must look solely to the trust property of such H&Q Trust for
the enforcement of any claim against such H&Q Trust, as neither the respective
Trustees, officers nor shareholders of either H&Q Trust assume any personal
liability for the obligations entered into on behalf of such H&Q Trust.
-23-
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
-----------------------------------
Xxxxx X. Xxxxxxxx,
President and Chief Executive Officer
PURCHASERS:
SOFINOV SOCIETE FINANCIERE
D'INNOVATION INC.
By: /s/ Denis Dionnne
-----------------------------------
Name: Xxxxx Xxxxxx
Title: President
By: /s/ Xxx Xxxxxxxxxx
-----------------------------------
Name: Xxx Xxxxxxxxxx
Title: Director
ROVENT II LIMITED PARTNERSHIP
By: Advent International Limited Partnership,
General Partner
By: Advent International Corporation,
General Partner
By: /s/ Xxxxx Fisherman
-----------------------------------
Name: Xxxxx Fisherman
Title: Vice President
BIOTECHNOLOGY DEVELOPMENT
FUND, L.P.
By: /s/ Xxxxx Xxxx
-----------------------------------
Name: Xxxxx Xxxx
Title: Managing Partner
BIOCAPITAL INVESTMENTS LIMITED
PARTNERSHIP
By: /s/ Xxxxxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: General Partner, President and CEO
-24-
CLARION CAPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman
SPECIAL SITUATIONS PRIVATE EQUITY
FUND, L.P.
By: MG Advisers, L.L.C.,
General Partner
By: /s/ Xxxxx X. Greenhouse
-----------------------------------
Name: Xxxxx X. Greenhouse
Title:
SPECIAL SITUATIONS FUND III, L.P.
By: MGP Advisers, Limited Partnership,
General Partner
By: AWM Investment Company, Inc.,
General Partner
By: /s/ Xxxxx X. Greenhouse
-----------------------------------
Name: Xxxxx X. Greenhouse
Title:
SPECIAL SITUATIONS CAYMAN FUND, L.P.
By: AWM Investment Company, Inc.,
General Partner
By: /s/ Xxxxx X. Greenhouse
-----------------------------------
Name: Xxxxx X. Greenhouse
Title:
-25-
INTERNATIONAL BIOTECHNOLOGY
TRUST plc
By: /s/ Xxxxxx X. Xxxxxxx Xxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx Xxxx
Title: Director
H & Q HEALTHCARE INVESTORS, INC.
By: /s/ Xxxx X. Xxxx
-----------------------------------
Name: Xxxx X. Xxxx
Title: President
H & Q LIFE SCIENCES INVESTORS, INC.
By: /s/ Xxxx X. Xxxx
-----------------------------------
Name: Xxxx X. Xxxx
Title: President
-26-
LANCASTER INVESTMENT PARTNERS
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Manager, General Partner
CPR (USA) INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Administrative Officer and General
Counsel
NEW YORK LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Director, Venture Capital
XXXXXX PARTNERS, L.P.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: General Partner
XXXXXXX X. XXXXXXX TRUST, NEW
TECHNOLOGIES FUND
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx, TTEE
Title: Trustee
-27-
BIOTECHNOLOGY DEVELOPMENT
FUND III, L.P.
By: /s/ Xxxxx Xxxx
-----------------------------------
Name: Xxxxx Xxxx
Title: Managing Partner
-28-
Exhibit A
PURCHASERS
Number of
Purchased Shares Number of
Purchaser to be Purchased Warrant Shares Purchase Price
--------- --------------- -------------- --------------
SOFINOV SOCIETE FINANCIERE D'INNOVATION 2,222,223 1,111,112 $5,000,001.75
INC.
Address:
1981, Avenue XxXxxx College
7e etage
Xxxxxxxx, Xxxxxx X0X 0X0
ROVENT II LIMITED PARTNERSHIP 333,334 166,667 $750,001.50
Address:
c/o Advent International
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
BIOTECHNOLOGY DEVELOPMENT FUND, L.P. 81,480 40,740 $183,330
Address:
c/o BioAsia
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
BIOTECHNOLOGY DEVELOPMENT FUND III, L.P. 29,632 14,816 $66,672
Address:
c/o BioAsia
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
BIOCAPITAL INVESTMENTS LIMITED PARTNERSHIP 150,000 75,000 $337,500
Address:
0000, xxx xx xx Xxxxxxxx
Xxxxxxxx, X0X 000 XXXXXX
CLARION CAPITAL CORPORATION 155,556 77,778 $350,001
Address:
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, XX 00000
-29-
Exhibit A (cont.)
Number of
Purchased Shares Number of
Purchaser to be Purchased Warrant Shares Purchase Price
--------- --------------- -------------- --------------
SPECIAL SITUATIONS PRIVATE EQUITY FUND, 266,667 133,334 $600,000.75
L.P.
Address:
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
SPECIAL SITUATIONS FUND III, L.P. 466,667 233,334 $1,050,000.75
Address:
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
SPECIAL SITUATIONS CAYMAN FUND, L.P. 155,556 77,778 $350,001
Address:
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
INTERNATIONAL BIOTECHNOLOGY TRUST plc 222,223 111,112 $500,001.75
Address:
c/o Rothschild Asset Management
0 Xxxxxx Xxxxx
Xx. Xxxxxxx'x Xxxx
Xxxxxx, XX00 XX XXXXXXX
H & Q HEALTHCARE INVESTORS, INC. 400,001 200,001 $900,002.25
Address:
x/x Xxxxxxxxx & Xxxxx Group
00 Xxxxx Xxxxx
Xxxxxx, XX 00000-0000
H & Q LIFE SCIENCES INVESTORS, INC. 266,666 133,333 $599,998.50
Address:
x/x Xxxxxxxxx & Xxxxx Group
00 Xxxxx Xxxxx
Xxxxxx, XX 00000-0000
-30-
Exhibit A (cont.)
Number of
Purchased Shares Number of
Purchaser to be Purchased Warrant Shares Purchase Price
--------- --------------- -------------- --------------
LANCASTER INVESTMENT PARTNERS 100,000 50,000 $225,000
Address:
000 X. Xxxxx, Xxxxx 000
Xxxx xx Xxxxxxx, XX 00000
CPR (USA) INC. 100,000 50,000 $225,000
Address:
c/o Liberty View Capital
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
NEW YORK LIFE INSURANCE COMPANY 888,888 444,444 $1,999,998
Address:
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
XXXXXX PARTNERS, L.P. 100,000 50,000 $225,000
Address:
000 Xxxxxxxxx Xxxxxx, Xxxxx 000X
Xxxx Xxxxxx, XX 00000
XXXXXXX X. XXXXXXX TRUSTEE, 126,667 63,334 $285,000.75
NEW TECHNOLOGIES FUND
Address:
c/o Emerging Growth MGMT Co.
Xxx Xxxxxxxxxxx Xxxxxx, Xxx 0000
Xxx Xxxxxxxxx, XX 00000
------------------------ ----------------------- ------------------------
Total: 6,065,560 3,032,783 $13,647,510
