Novartis Pharma AG AND Momenta Pharmaceuticals, Inc. INVESTOR RIGHTS AGREEMENT
Exhibit
2
Novartis
Pharma AG
AND
Momenta
Pharmaceuticals, Inc.
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THIS
INVESTOR RIGHTS AGREEMENT
(this
“Agreement”)
is
made as of July 25, 2006, by and between Novartis
Pharma AG
(the
“Investor”),
a
corporation organized under the laws of Switzerland, with its principal place
of
business at Xxxxxxxxxxx
00, XX 0000 Xxxxx BS,
and
Momenta Pharmaceuticals, Inc. (the “Company”),
a
Delaware corporation with its principal place of business at 000 Xxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000.
WHEREAS,
the Company proposes to issue and sell to the Investor shares of its Common
Stock, par value $0.0001 per share (the “Common
Stock”),
pursuant to the Stock Purchase Agreement dated as of July 25, 2006 (the
“Purchase
Agreement”);
and
WHEREAS,
as a condition to consummating the transactions contemplated by the Purchase
Agreement, the Investor and the Company have agreed upon registration rights
and
certain other rights and restrictions as set forth herein.
NOW,
THEREFORE, in consideration of the premises and mutual agreements hereinafter
set forth, and for other valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions.
As
used
in this Agreement, the following terms shall have the following meanings:
(a) The
term
“Affiliate”
means,
with respect to any Person, any other Person that directly or indirectly,
controls, is controlled by or is under common control with such Person. For
the
purposes of this definition, “control” (including with correlative meanings, the
terms “controlled by” and “under common control with”) shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
(b) The
term
“Agreement”
shall
have the meaning set forth in the Preamble to this Agreement.
(c) The
term
“Collaboration
and License Agreement”
means
that certain Collaboration and License Agreement to be entered into between
the
Company and the Investor contemplated by the memorandum of understanding among
the Company and the Investor (or an affiliate of the Investor) dated the date
hereof.
(d) The
term
“Common
Stock”
shall
have the meaning set forth in the recitals to this Agreement.
(e) The
term
“Demand
Registration Request”
has
the
meaning set forth in Section 7.
(f) The
term
“Effectiveness
Period”
has
the
meaning set forth in Section 3(a).
(g) The
term
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
(h) The
term
“Existing
Registration Rights Agreement”
means
the Second Amended and Restated Investors’ Rights Agreement, dated as of
February 27, 2004, by and among the Purchasers listed therein, the Founders
listed therein and the Company, as amended by Amendment No. 1 to such Agreement
dated June 10, 2004.
(i) The
term
“Holder”
means
the Investor for so long as it owns Registrable Shares and any Person to whom
the Investor transfers Registrable Shares in accordance with the terms and
conditions of this Agreement. If Registrable Shares are held by a nominee for
the beneficial owner thereof, the beneficial owner thereof may, at its option,
be treated as the Holder of such Registrable Shares for purposes of any request
or other action by any Holder or Holders of Registrable Shares pursuant to
this
Agreement (or any determination of any number or percentage of shares
constituting Registrable Shares held by any Holder or Holders of Registrable
Shares contemplated by this Agreement), provided that the Company shall have
received assurances reasonably satisfactory to it of such beneficial
ownership.
(j) The
term
“Notices”
has
the
meaning set forth in Section 21.
(k) The
term
“Investor”
shall
have the meaning set forth in the Preamble to this Agreement.
(l) The
term
“Person”
means
any individual, corporation, association, partnership, joint venture, entity,
trust, estate, limited liability company, limited partnership, joint stock
company, unincorporated organization or government or any agency or political
subdivision.
(m) The
term
“Purchase
Agreement”
shall
have the meaning set forth in the recitals to this Agreement.
(n) The
terms
“register,”
“registered,”
and
“registration”
refer
to a registration effected by preparing and filing a registration statement
in
compliance with the Securities Act and the declaration or ordering of
effectiveness of such registration statement.
(o) The
term
“Registrable
Shares”
means
(i) the Common Stock purchased by the Investor pursuant to the Purchase
Agreement and (ii) any Common Stock of the Company issued as a dividend or
other distribution with respect to, or in exchange or in replacement of, such
Common Stock after the date hereof; provided,
however,
that
shares of Common Stock which are Registrable Shares shall cease to be
Registrable Shares (A) upon any sale pursuant to a registration statement
under the Securities Act or (B) upon any sale or transfer in any manner to
a Person or entity which is not entitled, pursuant to Section 11, to the
rights under this Agreement.
(p) The
term
“Rule
144”
means
Rule 144 promulgated under the Securities Act.
(q) The
term
“SEC”
means
the Securities and Exchange Commission.
(r) The
term
“Securities
Act”
means
the Securities Act of 1933, as amended.
(s) The
term
“Similarly
Situated Person”
means
any third party that (i) has entered into a collaboration agreement with the
Company or one of its subsidiaries that is required to be filed by the Company
in accordance with Item 601 of Regulation S-K of the Securities Act and (ii)
in
connection with such collaboration, acquires equity securities of the Company
equal to ten percent (10%) or more of the then outstanding equity securities
of
the Company.
(t) The
term
“Subsequent
Registration”
has
the
meaning set forth in Section 7(c).
(u) The
term
“Termination
Date”
means
the
earliest of (a) the date on which the Company (i) enters into a definitive
agreement with an unaffiliated third party or parties to merge, consolidate
or
otherwise combine, with such third party or parties in a transaction where
the
holders of the Company’s outstanding shares immediately prior to such merger or
consolidation would hold, in the aggregate, securities possessing less than
fifty percent (50%) of the total combined voting power of the combined or
surviving entity immediately after such merger or consolidation, or to sell
all
or substantially all of the Company’s business or assets or securities
representing a majority of the then outstanding voting power of the Company’s
securities, (ii) makes a public announcement that it is negotiating a
transaction with an unaffiliated third party or parties covered by the foregoing
clause (a)(i), or (iii) consummates a transaction with an unaffiliated third
party or parties covered by the foregoing clause (a)(i); or (b) the date a
third
party or group (as defined above) (i) acquires beneficial ownership of voting
securities (including those convertible or exchangeable into such voting
securities) of the Company representing twenty percent (20%) or more of the
then
outstanding voting securities of the Company; or (ii) announces or commences
a
tender or exchange offer to acquire voting securities of the Company which,
if
successful, would result in such Person or group owning, when combined with
any
other voting securities of the Company owned by such Person or group, twenty
percent (20%) or more of the then outstanding voting securities of the
Company.
(v)
The
term “Valid
Business Reason”
has
the
meaning set forth in Section 7.
2. Company
Registration.
If
(but without any obligation to do so) the Company proposes to register any
of
its stock or other securities under the Securities Act in connection with the
public offering of such securities solely for cash, other than (a) a
registration relating solely to the sale of securities to participants in a
stock plan, or (b) a registration on Form S-4 (or any successor form)
relating solely to a transaction pursuant to the SEC’s Rule 145, the
Company shall, at such time, promptly give each Holder written notice of such
registration. Upon the written request of each Holder given within fifteen
(15) days after receipt by such Holder of such notice by the Company in
accordance with Section 21, the Company shall, subject to the provisions of
Section 5, cause to be registered under the Securities Act all of the
Registrable Shares that each such Holder has requested to be registered;
provided, that the Company shall have the right to postpone or withdraw any
registration statement relating to an offering in which the Holders are eligible
to participate under this Section 2 without any liability or obligation to
the Holders under this Section 2. Any Holder shall have the right to
withdraw its request for inclusion of its Registrable Shares in any registration
statement pursuant to this Section 2 by giving written notice to the
Company of its request to withdraw; provided, however, that (i) such
request must be made in writing prior to the earlier of the execution of the
underwriting agreement or the execution of the custody agreement with respect
to
such registration and (ii) such withdrawal shall be irrevocable and, after
making such withdrawal, a Holder
shall no longer have any right to include Registrable Shares in the registration
as to which such withdrawal was made.
3. Obligations
of the Company.
Whenever
required under Section 2 or Section 7 to use its reasonable best
efforts to effect the registration of any Registrable Shares, the Company shall,
as expeditiously as reasonably possible:
(a)
Prepare and file with the SEC a registration statement with respect to such
Registrable Shares and use its reasonable best efforts to cause such
registration statement to become and remain effective for twelve
(12) months from the effective date or such lesser period until the
distribution thereof has been completed (the “Effectiveness
Period”).
(b)
Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the
Securities Act with respect to the disposition of all securities covered by
such
registration statement.
(c)
Furnish,
without charge, to the selling Holders at
least
one photocopy of a signed copy, of the registration statement and any
post-effective amendments thereto, including financial statements and schedules,
all documents incorporated therein by reference, all exhibits (including those
incorporated by reference) and any free writing prospectus utilized in
connection therewith and such
reasonable numbers of copies of the registration statement, each amendment
and
supplement thereto, each prospectus, related there to including a preliminary
prospectus, related thereto in conformity with the requirements of the
Securities Act, each free writing prospectus utilized in connection therewith,
and such other documents as they may reasonably request in order to facilitate
the disposition of such Registrable Shares owned by them.
(d)
Use
its reasonable best efforts to register and qualify the Registrable Shares
covered by such registration statement under such other securities or “blue sky”
laws of such states as shall be reasonably appropriate for the distribution
of
the securities covered by the registration statement and do any and all other
acts and things which may be reasonably necessary or advisable to enable the
selling Holders or underwriter, if any, to consummate the disposition of the
Registrable Shares in such jurisdictions, provided that the Company shall not
be
required in connection therewith or as a condition thereto to qualify to do
business, to amend its certificate of incorporation or by-laws in a manner
that
the Board of Directors of the Company determines is inadvisable or to file
a
general consent to service of process in any such states or jurisdictions,
and
further provided that (anything in this Agreement to the contrary
notwithstanding with respect to the bearing of expenses) if any jurisdiction
in
which the securities shall be qualified shall require that expenses incurred
in
connection with the qualification of the securities in that jurisdiction be
borne by selling stockholders, then such expenses shall be payable by selling
stockholders on a pro rata basis, to the extent required by such
jurisdiction.
(e)
Provide a transfer agent and registrar for the Common Stock no later than the
effective date of the first registration of any Registrable Shares.
(f)
Otherwise use its reasonable best efforts to comply with all applicable rules
and regulations of the SEC.
(g)
Use
its reasonable best efforts to cause all such Registrable Shares to be listed
on
a national securities exchange (if such securities are not already so listed)
and on each additional national securities exchange on which similar securities
issued by the Company are then listed, if the listing of such securities is
then
permitted under the rules of such exchange.
(h)
Enter
into such customary agreements (including an underwriting agreement in customary
form) and take such other actions as the selling Holders of Registrable Shares
shall reasonably request in order to expedite or facilitate the disposition
of
such Registrable Shares.
(i)
(x) Make generally available to its security holders, as soon as reasonably
practicable after the effective date of the registration statement (and in
any
event within 90 days after the end of such twelve month period described
hereafter), an earnings statement (which need not be audited) covering the
period of at least twelve consecutive months beginning with the first day of
the
Company’s first calendar quarter after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder and
(y) make
available for inspection by any selling Holder of Registrable Shares, by any
managing underwriter participating in any disposition to be effected pursuant
to
such registration statement and by any attorney, accountant or other agent
retained by any such selling Holder or any such underwriter, all pertinent
financial and other records and pertinent corporate documents and properties
of
the Company, and cause all of the Company’s officers, directors and employees to
supply all information reasonably requested by any such selling Holder,
underwriter, attorney, accountant or agent in connection with such registration
statement.
(j)
Use
reasonable best efforts to prevent the issuance of any stop order suspending
the
effectiveness of such registration statement or of any order preventing or
suspending the use of any preliminary prospectus and, if any such order is
issued, to obtain the lifting thereof at the earliest reasonable
time.
(k)
In
the case of an underwritten offering, use its reasonable best efforts to obtain
an opinion from the Company’s counsel and a “cold comfort” letter from the
Company’s independent public accountants in customary form and covering such
matters as are customarily covered by such opinions and “cold comfort” letters
delivered to underwriters in underwritten public offerings, which opinion and
letter shall be reasonably satisfactory to the underwriter, if any, and furnish
to each Holder participating in the offering to the extent possible and to
each
underwriter, if any, a copy of such opinion and letter addressed to such Holder
or underwriter;
(l)
Deliver promptly to each Holder participating in the offering and each
underwriter, if any, copies of all correspondence between the SEC and the
Company, its counsel or auditors and all memoranda relating to discussions
with
the SEC or its staff with respect to the registration statement, other than
those portions of any such memoranda which contain information subject to
attorney-client privilege with respect to the Company.
(m)
Cooperate with the sellers of Registrable Shares and the managing underwriter,
if any, to facilitate the timely preparation and delivery of certificates not
bearing any restrictive legends representing the Registrable Shares to be sold,
and cause such Registrable Shares to be issued in such denominations and
registered in such names in accordance with the underwriting agreement prior
to
any sale of Registrable Shares to the underwriters or, if not an underwritten
offering, in accordance with the instructions of the sellers of Registrable
Shares at least three business days prior to any sale of Registrable Shares
and
instruct any transfer agent and registrar of Registrable Shares to release
any
stop transfer orders in respect thereof.
(n)
Take
all such other commercially reasonable actions as are necessary or advisable
in
order to expedite or facilitate the disposition of such Registrable
Shares.
(o)
(A) Include in such registration statement and prospectus any information
or disclosure related to a Holder as a selling stockholder thereunder reasonably
requested by such Holder as may be necessary in the opinion of counsel to such
Holder to ensure compliance with applicable securities laws and
(B) consider in good faith whether or not to include in such registration
statement and prospectus any information or disclosure not related to a Holder
as a selling stockholder thereunder reasonably requested by such Holder as
may
be necessary in the opinion of counsel to such Holder to ensure compliance
with
applicable securities laws.
(p)
Take
all reasonable action to ensure that any free writing prospectus prepared,
authorized or approved by the Company and utilized in connection with any
registration complies in all material respects with the Securities Act, is
filed
in accordance with the Securities Act to the extent required thereby, and is
retained in accordance with the Securities Act to the extent required
thereby.
If
the
Company has delivered a prospectus to the selling Holders of Registrable Shares
and after having done so such prospectus is amended to comply with the
requirements of the Securities Act, the Company shall promptly notify the
selling Holders of Registrable Shares and, if requested, the selling Holders
of
Registrable Shares shall immediately cease making offers of Registrable Shares
and return all prospectuses to the Company. The Company shall promptly provide
the selling Holders of Registrable Shares with revised prospectuses and,
following receipt of the revised prospectuses, the selling Holders of
Registrable Shares shall be free to resume making offers of the Registrable
Shares.
No
Holder
shall have any right to take any action to restrain, enjoin, or otherwise delay
any registration as the result of any controversy that might arise with respect
to the interpretation or implementation of this Agreement.
(a)
It shall be a condition precedent to the obligations of the Company to take
any
action pursuant to this Agreement with respect to the registration of any
Holder’s Registrable Shares that such Holder shall take such actions and furnish
to the Company such information regarding itself, the Registrable Shares held
by
it, and the intended method of disposition of such securities, as may then
be
customarily provided by selling stockholders as the Company shall reasonably
request and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement, including, without
limitation (i) in connection with an underwritten offering, enter into an
appropriate underwriting agreement containing terms and provisions then
customary in agreements of that nature (it being understood that the Holders
of
the Registrable Shares which are to be distributed by any underwriters may,
at
their option, require that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement shall be
conditions precedent to the obligations of such Holder), (ii) enter into
such custody agreements, powers of attorney and related documents at such time
and on such terms and conditions as may then be customarily
required in connection with such offering and (iii) distribute the
Registrable Shares only in accordance with and in the manner of the distribution
contemplated by the applicable registration statement and prospectus. In
addition, the Holders shall promptly notify the Company of any request by the
SEC or any state securities commission or agency for additional information
or
for such registration statement or prospectus to be amended or
supplemented.
(b)
If
any such registration statement or comparable statement under “blue sky” laws
refers to any Holder by name or otherwise as the Holder of any securities of
the
Company, then such Holder shall have the right to require (i) the insertion
therein of language, in form and substance reasonably satisfactory to such
Holder and the Company, to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company’s securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event that such
reference to such Holder by name or otherwise is not in the judgment of the
Company, as advised by counsel, required by the Securities Act or any similar
federal statute or any state “blue sky” or securities law then in force, the
deletion of the reference to such Holder.
(c)
The
Company covenants that (i) so long as it remains subject to the reporting
provisions of the Exchange Act, it will timely file the reports required to
be
filed by it under the Securities Act or the Exchange Act (including, but not
limited to, the reports under Sections 13 and 15(d) of the Exchange Act
referred to in subparagraph (c)(1) of Rule 144 under the Securities
Act), and (ii) will take such further action as any Holder of Registrable
Shares may reasonably request, all to the extent required from time to time
to
enable such Holder to sell Registrable Shares without registration under the
Securities Act within the limitation of the exemptions provided by (A) Rule
144 under the Securities Act, as such Rule may be amended from time to time,
or
(B) any similar rule or regulation hereafter adopted by the SEC. Upon the
request of any Holder of Registrable Shares, the Company will deliver to such
Holder a written statement as to whether it has complied with such
requirements.
(a)
In connection with any offering under Section 2 involving an underwriting
of shares being issued by the Company, the Company shall not be required to
include any Holder’s Registrable Shares in such underwriting unless such Holder
accepts the terms of the underwriting as agreed upon between the Company and
the
underwriters selected by it (and enters into an underwriting agreement with
the
underwriters on customary terms) (it being understood that the Holders of the
Registrable Shares which are to be distributed by any underwriters may, at
their
option, require that any or all of the conditions precedent to the obligations
of such underwriters under such underwriting agreement shall be conditions
precedent to the obligations of such Holder), and then only in such quantity
as
will not, in the reasonable opinion of the underwriters, jeopardize the success
of the offering by the Company. If the total amount of securities, including
Registrable Shares, requested by stockholders to be included in such offering
exceeds
the
amount of securities to be sold (other than by
the Company) that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Shares, which the underwriters determine in their sole discretion
will not jeopardize the success of the offering; provided, however, there shall
first be excluded from such registration statement all
shares of Common Stock sought to be included therein by (i) any director,
consultant, officer, or employee of the Company or any subsidiary of the Company
other than Xxx Xxxxxxxxxxxx, Xxxxxx X. Xxxxxx, Xx., Xxxxxx Xxxxxxxxxxxx and
Xxxx
X. Xxxxx, (ii) stockholders exercising any contractual or incidental
registration rights subordinate and junior to the rights of the Preferred
Holders of Registrable Securities (each as defined in the Existing Registration
Rights Agreement) and the Holders and (iii) stockholders who do not have
contractual registration rights. If after such shares are excluded and any
Registrable Shares remain to be included in the offering, the underwriters
shall
determine in their sole discretion that the number of securities which remain
to
be included in the offering exceeds the amount of securities to be sold that
the
underwriters determine is compatible with the success of the offering, then
(a)
in the context of a Section 2 offering, prior to excluding any shares for the
account of one or more securityholders party to the Existing Registration Rights
Agreement, the Company shall first exclude, on a pro rata basis, that number
of
Registrable Shares and securities to be registered for the account of holders
of
registration rights granted after the date hereof which the underwriters
determine in their sole discretion will jeopardize the success of the offering
and (b) in the context of a Section 7 offering, prior to excluding any shares
for the account of any Holder, all securities to be registered for the account
of holders of registration rights granted after the date hereof shall be
excluded from such registration statement. Any Registrable Shares to be included
in the offering shall be apportioned pro rata among the Holders providing notice
of their desire to participate in the offering according to the total amount
of
securities entitled to be included therein owned by each selling Holder or
in
such other proportions as shall mutually be agreed to by such Holders. For
purposes of the preceding two sentences and the last sentence of the following
paragraph concerning apportionment, for any selling Holder or other stockholder
which is a partnership, limited liability company or corporation, the partners,
members, retired members, retired partners, and stockholders of such Holder
or
stockholder, or the estates and family members of any such partners, members,
retired members and retired partners and any trusts for the benefit of any
of
the foregoing Persons shall be deemed to be a single “selling Holder” or
“selling stockholder” and any pro rata reduction with respect to such “selling
Holder” or “selling stockholder” shall be based upon the aggregate amount of
shares carrying registration rights owned by all entities and individuals
included in such “selling Holder” or “selling stockholder,” as defined in this
sentence.
(b)
If
the total amount of securities requested by stockholders to be included in
an
offering for the account of one or more securityholders party to the Existing
Registration Rights Agreement, including Registrable Shares so requested to
be
included in such offering, exceeds the amount of securities to be sold that
the
underwriters determine in their sole discretion is compatible with the success
of the offering, then all Registrable Shares shall be excluded from such
registration statement. Any Registrable Shares to be included in the offering
shall be apportioned pro rata among the Holders providing notice of their desire
to participate in the offering according to the total amount of securities
entitled to be included therein owned by each selling Holder or in such other
proportions as shall mutually be agreed to by such Holders.
(c)
If,
as a result of the proration provisions of this Section, any Holder shall not
be
entitled to include all Registrable Shares in a registration that such Holder
has requested be included, such Holder may elect to withdraw its request to
include Registrable Shares in such registration or may reduce the number
requested to be included; provided, however, that (x) such request must be
made in writing prior to the earlier of the execution of the underwriting
agreement
or the execution of the custody agreement with respect to such registration
and
(y) such withdrawal shall be irrevocable and, after making such withdrawal,
such Holder shall no longer have any right to include Registrable Shares in
the
registration as to which such withdrawal was made.
(d)
In
connection with any underwritings of shares to be registered under
Section 2, the Company shall have the right to designate the managing
underwriter or underwriters.
6. Company
Registration Expenses.
All expenses incurred in connection with any registration pursuant to
Section 2, including, without limitation, any additional registration and
qualification fees and any additional fees and disbursements of counsel to
the
Company that result from the inclusion of securities held by the selling Holders
in such registration, shall be borne by the Company. Notwithstanding the
foregoing, expenses to be borne by the Company in connection with any
registration pursuant to Section 2 shall exclude underwriters’ discounts
and commissions and the fees and disbursements of attorneys (other than the
reasonable fees and disbursements of one special counsel for the selling Holders
collectively in an amount not to exceed $25,000), accountants and other agents
of the Holders and those expenses set forth in Section 3(d) incurred in
connection with the qualification of securities in certain jurisdictions that
are required to be borne by selling stockholders.
(a)
If
(i) the Company shall receive a written request (specifying that it is
being made pursuant to this Section 7) from one or more Holders that the
Company file a registration statement on Form S-3 (or any successor form to
Form S-3 regardless of its designation) (or, if the Company is not then a
registrant entitled at such time to use Form S-3 (or any form to Form S-3
regardless of its designation) to register such shares, a Form S-1 (or any
successor form to Form S-1 regardless of designation) for a public offering
of
Registrable Shares (whether by underwriting or otherwise) the reasonable
anticipated aggregate price to the public of which would equal or exceed
$3,000,000 (a “Demand
Registration Request”),
then
the Company shall promptly notify all other Holders of such request and shall
use its reasonable best efforts to cause all Registrable Shares that Holders,
within fifteen (15) days after receipt of any such written notice, have
requested be registered to be registered as soon as reasonably practicable
thereafter.
(b)
Notwithstanding the foregoing, (i) the Company shall not be obligated to
effect a registration pursuant to Section 7(a) during the period starting
with the date ninety (90) days prior to the Company’s estimated date of
filing of, and ending on a date ninety (90) days following the effective
date of, a registration statement pertaining to an underwritten public offering
of securities for the account of the Company, provided, that the Company is
actively employing in good faith its commercially reasonable efforts to cause
such registration statement to become effective and that the Company’s estimate
of the date of filing such registration statement is made in good faith;
provided, however, that the Company shall file a registration statement upon
the
request of one or more Holders pursuant to Section 7(a) after ninety
(90) days have elapsed after the estimated date of filing of such
registration statement pertaining to an underwritten public offering of
securities for the account of the Company; and provided, further, that the
Company shall only be permitted to delay pursuant to this Section 7(b)(i)
the filing of a registration statement requested to be filed by one or more
Holders pursuant
to Section 7(a) once in any 12-month period; (ii) the Company shall
not be obligated to effect (x) more than three registrations pursuant to
Section 7(a) on Form S-1 (or any successor form) and (y) more than two
registrations pursuant to Section 7(a) in any twelve month period, and
(iii) if the Company shall furnish to the Holders a certificate signed by
the President of the Company stating that in the good faith judgment of the
Board of Directors it would be seriously detrimental to the Company or its
stockholders for a registration statement to be filed (a “Valid
Business Reason”)
in the
near future, then the Company’s obligation to use its reasonable best efforts to
file a registration statement shall be deferred until such Valid Business Reason
no longer exists; provided that Company may exercise its right to delay filing
a
registration statement pursuant to this Section 7(b)(iii) or to suspend the
use of a prospectus included in an effective registration statement pursuant
to
Section 13(f) for an aggregate period not to exceed ninety (90) days
in any 12-month period. The Company shall give notice of its determination
to
delay or suspend a registration statement and of the fact that the Valid
Business Reason for such delay or suspension no longer exists, in each case,
promptly after the occurrence thereof.
(c)
If
any registration statement pursuant to this Section 7 or any Subsequent
Registration (as defined below) ceases to be effective for any reason at any
time during the Effectiveness Period, the Company shall use reasonable best
efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within forty-five (45) days
of such cessation of effectiveness amend such registration statement in a manner
to obtain the withdrawal of the order suspending the effectiveness thereof,
or
file an additional registration statement, covering all of the Registrable
Shares covered by such prior registration statement (a “Subsequent
Registration”).
If a
Subsequent Registration is filed, the Company shall use reasonable best efforts
to cause the Subsequent Registration to be declared effective under the
Securities Act as soon as practicable after such filing and to keep such
Subsequent Registration continuously effective for the remainder of the
Effectiveness Period plus the number of days during which the registration
statement replaced by the Subsequent Registration ceased to be effective.
Notwithstanding anything to the contrary contained herein the filing by the
Company of a Subsequent Registration shall not be counted for purposes of
limitations on the number of registration statements the Company is required
to
effect pursuant to this Section 7.
(d)
If
the Company files any shelf registration statement for the benefit of the
holders of any of its securities other than the Holders, the Company agrees
that
it shall include in such registration statement such disclosures as may be
required by Rule 430B (referring to the unnamed selling security holders in
a generic manner by identifying the initial offering of the securities to the
Holders) in order to ensure that the Holders may be added to such shelf
registration statement, if the Company so elects, at a later time through the
filing of a prospectus supplement rather than a post-effective
amendment.
(e)
The
Holders’ rights to registration under this Section 7 are in addition to,
and not in lieu of, their rights to registration under Section 2 of this
Agreement.
(a)
If
the Holders intend to distribute the Registrable Shares covered by their request
by means of an underwriting, they shall so advise the Company as a part of
their
request made pursuant to Section 7(a), and the Company shall include such
information in its written notice
referred to in Section 7(a). In such event, (i) the right of any other
Holder to include its Registrable Shares in such registration pursuant to
Section 2 or 7(a), as the case may be, shall be conditioned upon such other
Holder’s participation in such underwriting on the terms set forth herein, and
(ii) all Holders including Registrable Shares in such registration shall
enter into an underwriting agreement upon customary terms with the underwriter
or underwriters managing the offering on the terms set forth herein. In
connection with any offering under Section 7(a) involving an underwritten
registration, if the managing underwriter determines that the total amount
of
Registrable Shares requested by the Holders, together with other securities
requested by stockholders to be included in such offering, exceeds the amount
of
securities that the managing underwriter determines in its reasonable judgment
is compatible with the success of the offering, then the number of Registrable
Shares to be included in such offering shall be allocated in accordance with
the
provisions of Section 5.
(b)
In
connection with any underwritings of shares to be registered under
Section 7(a), a majority in interest of the Holders participating in such
registration shall have the right to designate the managing underwriter or
underwriters (such managing underwriter or underwriters to be reasonably
acceptable to the Company).
9. Expenses
of Demand Registration.
All expenses incurred in connection with any registration pursuant to
Section 7, including, without limitation, all registration and
qualification fees, printers’ and accounting fees, fees and disbursements of
counsel for the Company, shall be borne by the Company. Notwithstanding the
foregoing, expenses to be borne by the Company in connection with any
registration pursuant to Section 7 shall exclude underwriters’ discounts
and commissions and the fees and disbursements of attorneys (other than the
reasonable fees and disbursements of one special counsel for the selling Holders
collectively in an amount not to exceed $25,000), accountants and other agents
of the Holders.
10. Indemnification.
In the event any Registrable Shares are included in a registration statement
under this Agreement:
(a)
To
the extent permitted by law, the Company will indemnify and hold harmless each
Holder owning Registrable Shares included in a registration statement pursuant
to this Agreement, any underwriter (as defined in the Securities Act) for a
Holder, and each Person, if any, who controls any such Holder or underwriter
within the meaning of the Securities Act, against any losses, claims, damages
or
liabilities, joint or several, and expenses (including reasonable fees of
counsel and any amounts paid in any settlement effected with the Company’s
consent) to which they may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based on (i) any untrue or alleged untrue
statement of any material fact contained in any registration statement,
including, without limitation, any preliminary prospectus, “issuer free writing
prospectus” (as defined in the Securities Act) or final prospectus contained
therein or any amendments or supplements thereto, together with the documents
incorporated by reference therein, (ii) the omission or alleged omission to
state therein a material fact required to be stated
therein,
or necessary to make the statements therein
not misleading, or (iii) any violation by the Company of the Securities
Act, the Exchange Act, any state securities laws or any rule or regulation
promulgated under any thereof relating to action or inaction by the Company
in
connection with any such registration; and will promptly reimburse each such
Holder, underwriter, or controlling Person or other Person for any legal or
other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability, or action as such expenses are incurred, provided, however,
that the indemnity agreement contained in this Section 10(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement does not include a release of the Company from
all
liability in respect of such claim and is effected without the consent of the
Company (which consent shall not be unreasonably withheld or delayed) nor shall
the Company be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it (i) arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in connection with such registration statement, preliminary
prospectus, issuer free writing prospectus, final prospectus, or amendments
or
supplements thereto, in reliance upon and in conformity with written information
furnished to the Company expressly for use in connection with such registration
by or on behalf of any such Holder, underwriter or controlling Person,
(ii) is caused by the failure of a Holder to deliver, at or prior to
written confirmation of the sale of such securities to such Person, a copy
of
the preliminary prospectus, as then amended or supplemented, relating to such
Registrable Shares, in connection with a purchase, if the Company had previously
furnished copies thereof to such Holder or (iii) is caused by such Holder’s
disposition of Registrable Shares during any period during which such Holder
is
obligated to discontinue any disposition of Registrable Shares under
Section 13. Such indemnity and reimbursement of expenses shall remain in
full force and effect regardless of any investigation made by or on behalf
of
such indemnified party and shall survive the transfer of such securities by
such
Holder.
(b)
To
the extent permitted by law, each Holder owning Registrable Shares included
in a
registration statement pursuant to this Agreement will, severally and not
jointly, indemnify and hold harmless the Company, each of its directors and
officers, each underwriter (within the meaning of the Securities Act), if any,
for the Company, and each Person, if any, who controls the Company or any
underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities to which the Company or any such director,
officer, controlling Person or underwriter may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based on
(i) any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, including any preliminary prospectus,
issuer free writing prospectus or final prospectus contained therein or any
amendments or supplements thereto or (ii) the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to
make the statements therein not misleading, in each case to the extent, but
only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information relating to and furnished to the Company by such Holder
expressly for use in connection with such registration; and will promptly
reimburse the Company or any such director, officer, controlling Person or
underwriter for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 10(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement does not
include a release of such Holder from all liability in respect of such claim
and
is effected without the consent of such Holder (which consent shall not be
unreasonably withheld or delayed) and, provided, further, that no Holder shall
have any liability under this Section 10(b) in excess of the net proceeds
actually received by such Holder in the relevant public offering. Such indemnity
and
reimbursement of expenses shall remain in full force and effect regardless
of
any investigation made by or on behalf of such indemnified party and shall
survive the transfer of such securities by such Holder.
(c)
Promptly after receipt by an indemnified party under this Section 10 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under
this
Section 10, notify the indemnifying party in writing of the commencement
thereof and the indemnifying party shall have the right to participate in,
and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the indemnified parties (which consent shall not be
unreasonably withheld), provided, that if in the reasonable opinion of outside
counsel to any indemnified party a conflict of interest between any indemnified
and indemnifying parties may exist in respect of such claim, the indemnified
party shall have the right to continue its own defense of such claim and retain
one firm of counsel in connection therewith and the indemnifying party shall
be
liable for any expenses therefor. The failure to notify an indemnifying party
promptly of the commencement of any such action, if materially prejudicial
to
such party’s ability to defend such action, shall relieve such indemnifying
party of any liability to the indemnified party under this Section 10 to
the extent of such material prejudice, but the omission so to notify the
indemnifying party will not relieve an indemnifying party of any liability
that
such party may have to any indemnified party otherwise than under this
Section 10.
(d)
If
the indemnification provided for in this Section 10 is required by its
terms but is for any reason held to be unavailable to or otherwise insufficient
to hold harmless an indemnified party under Section 10(a) or
Section 10(b) in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred to herein
(i) in such proportion as is appropriate to reflect the relative faults of
the Company and the selling Holders in connection with the statements or
omissions described in such Section 10(a) or Section 10(b) which
resulted in such losses, claims, damages, liabilities or expenses, or
(ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only
the
relative faults referred to in clause (i) above but also the relative benefits
received by the Company and the selling Holders from the offering of securities
as well as any other relevant equitable considerations. The respective relative
benefits received by the Company and the selling Holders shall be deemed to
be
in the same proportion as the total price paid to the Company and the selling
Holders, respectively, for the securities sold by them in the offering. The
relative fault of the Company and the selling Holders shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material
fact
relates to information supplied by the Company or the selling Holders and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by
a
party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in this Section 10, any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim. The provisions set forth in Section 10(c) with respect to notice
of commencement of any action shall apply if a claim for contribution is to
be
made under this Section 10(d);
provided, however, that no additional notice shall be required with respect
to
any action for which notice has been given under Section 10(c) for purposes
of indemnification. The Company and the selling Holders agree that it would
not
be just and equitable if contribution pursuant to this Section 10 were
determined solely by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in
this
Section. Notwithstanding the provisions of this Section 10(d), no Holder
shall be required to contribute an amount in excess of the net proceeds actually
received by such Holder in the relevant public offering, less the amount of any
indemnification payment made by such indemnifying party pursuant to
Section 10. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(e)
Notwithstanding the foregoing, to the extent that the provisions on
indemnification contained in the underwriting agreements entered into among
the
Holders, the Company and the underwriters in connection with an underwritten
public offering are in conflict with the foregoing provisions, the provisions
in
the underwriting agreement shall be controlling as to the Registrable Shares
included in the public offering.
(f)
The
indemnity and contribution agreements contained herein shall be in addition
to
any other rights to indemnification or contribution which any indemnified party
may have pursuant to law or contract and shall remain operative and in full
force and effect regardless of any investigation made or omitted by or on behalf
of any indemnified party and shall survive the transfer of the Registrable
Shares by any such party.
(g)
The
indemnification and contribution required by this Section 10 shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
11. Transfer
of Registration Rights.
The registration rights and obligations of the Investor under this Agreement
with respect to any Registrable Shares may be transferred only to one or more
Affiliates of the Investor; provided, however, that (a) the Company shall
be given written notice by the Investor at the time of any permitted transfer
stating the name and address of the transferee and identifying the securities
with respect to which the rights and obligations under this Agreement are being
assigned and (b) the transferee shall execute an agreement to be bound by
the terms of this Agreement. For the avoidance of doubt, this Section 11 shall
not restrict the Holders ability to sell or otherwise transfer any Registrable
Shares.
12. Mergers,
Etc.
The Company shall not, directly or indirectly, enter into any merger,
consolidation or reorganization in which the Company shall not be the surviving
corporation unless the proposed surviving corporation shall, prior to such
merger, consolidation or reorganization, agree in writing to assume the
obligations of the Company under this Agreement to register Registrable Shares
(but not any other obligations hereunder), and for that purpose references
hereunder to “Registrable Shares” shall be deemed to be references to the
securities which the Holders would be entitled to receive in exchange for
Registrable Shares under any such merger, consolidation or reorganization;
provided, however, that the provisions of this Agreement shall not apply in
the
event of any merger, consolidation or reorganization in which the Company is
not
the surviving corporation if the holders of Registrable Shares are entitled
to receive in exchange therefor (i) cash or (ii) securities of the
acquiring corporation which may be immediately sold to the public without
registration under the Securities Act.
13. Future
Events.
The Company will notify each Holder participating in a registration of the
occurrence of any of the following events of which the Company is actually
aware, and (in the case of clauses (c) through (f) below) when so notified,
each
Holder will immediately discontinue any disposition of Registrable Shares until
notified by the Company that such event is no longer applicable:
(a)
when
the registration statement, any pre-effective amendment, the prospectus or
any
prospectus supplement related thereto, any post-effective amendment to the
registration statement or any free writing prospectus has been filed and, with
respect to the registration statement or any post-effective amendment, when
the
same has become effective;
(b)
of
any request by the SEC or state securities authority for amendments or
supplements to the registration statement or the prospectus related thereto
or
for additional information;
(c)
if at
any time the representations and warranties contemplated by any underwriting
agreement, securities sale agreement or other similar agreement relating to
the
offering shall cease to be true and correct in all material
respects;
(d)
the
issuance by the SEC or any state securities commission or agency of any stop
order suspending the effectiveness of the registration statement or the
initiation of any proceedings for that purpose (in which case the Company will
use its reasonable best efforts to obtain the withdrawal of any such order
or
the cessation of any such proceedings);
(e)
the
existence of any fact which makes untrue any material statement made in the
registration statement or prospectus or any document incorporated therein by
reference or any free writing prospectus or the information conveyed to any
purchaser at the time of sale to such purchaser or which requires the making
of
any changes in the registration statement or prospectus or any document
incorporated therein by reference or any free writing prospectus or the
information conveyed to any purchaser at the time of sale to such purchaser
in
order to make the statements therein not misleading (in which case the Company
will use its reasonable best efforts to amend the applicable document to correct
the deficiency); or
(f)
in
the event that, in the judgment of the Company, it is advisable to suspend
use
of a prospectus included in a registration statement due to pending material
developments or other events that have not yet been publicly disclosed and
as to
which the Company believes public disclosure would be detrimental to the
Company; provided, however, that Company may exercise its right to suspend
the
use of a prospectus included in an effective registration statement pursuant
to
this Section 13(f) or to delay filing a registration statement pursuant to
Section 7(b)(iii) for an aggregate period not to exceed ninety
(90) days in any 12-month period.
14. Termination.
Sections 2 through 13 and Sections 15 through 17 of this Agreement shall
terminate on the date on which no Holder holds any Registrable Shares. All
other
provisions of this Agreement shall terminate in accordance with their respective
terms.
15. Stand-Off
Agreement.
Each Holder agrees that in the event the Company proposes to file a registration
statement for an underwritten public offering of its securities, upon the
request of the underwriters managing such public offering, such Holder will
execute a customary lock-up agreement, whereby such Holder shall agree not
to
sell or otherwise dispose the Registrable Shares or other securities of the
Company held by such Holder (other than as part of such registration) without
the prior written consent of the underwriters for a period not to exceed ninety
(90) days from the effective date of the registration; provided, however,
that all officers and directors of the Company and stockholders holding in
excess of 5% of the Common Stock enter into similar agreements. Any Holder
receiving any written notice from the Company regarding the Company’s plans to
file a registration statement shall treat such notice confidentially and shall
not disclose such information to any Person.
16. Other
Registration Rights Agreements.
The Company agrees that if any other registration rights agreement entered
into
after the date of this Agreement with respect to any of its securities contains
terms which are more favorable to, or less restrictive on, the other party
thereto than the terms and conditions contained in Sections 2 through 10,
Section 12, Section 13 and Section 15 of this Agreement are to the Holders,
then
the Company shall provide the Holders the option to replace the terms and
conditions contained in Sections 2 through 10, Section 12, Section 13 and
Section 15 of this Agreement in their entirety with the terms and conditions
of
such other registration right agreement relating to registration.
17. Inspection.
The Company shall, upon reasonable prior notice to the Company, permit
authorized representatives of the Holders (x) to visit and inspect any of the
properties of the Company including its books of accounts (and to make copies
thereof and take extracts therefrom), and to discuss the affairs, finances
and
accounts of the Company with its officers, administrative employees and
independent accountants and (y) at least twice per year, to meet with the
Chairman of the Company’s Board of Directors and other Directors of the Company
all at the expense of the Holders and at such reasonable times and as often
as
may be reasonably. Investor’s right to receive the information described herein
shall not apply to, and the Company have the right to omit certain information,
if the Company’s Board of Directors determines that such exclusion or omission
is necessary: (i) in order to preserve the Company’s attorney-client privilege;
(ii) in order to fulfill the Company’s obligations with respect to confidential
or proprietary information of third parties (provided that the Company shall
use
its commercially reasonable efforts to obtain waivers or implement requisite
procedures to enable reasonable access to such information without violating
such confidentiality); or (iii) because such information relates to any
particular matter in which the Investor or its Affiliates have an interest
that
conflicts with the business of the Company. Investor agrees not to (A) use
such
information for any purpose other than monitoring its investment in the Company,
or (B) reveal to any Person outside of Investor and its advisors any
confidential information learned as a result of the rights granted by this
Section 17.
18. Standstill.
Except as permitted by the terms of this Agreement, the Purchase Agreement
or
the Collaboration and License Agreement or any other collaboration agreement
between the Company or any of its subsidiaries and the Investor or any of its
Affiliates, for a period commencing with the date of this Agreement and ending
on the earliest of (a) the termination of the MOU (or, if later entered into,
the Collaboration and License Agreement), (b) the Termination Date and (c)
24
months from the date of the Closing (as defined the
Purchase Agreement), Investor shall not, without the prior written consent
of
the Company or the Company’s Board of Directors: (i) acquire, offer to acquire,
or agree to acquire, directly or indirectly, by purchase or otherwise, voting
securities or direct or indirect rights to acquire any voting securities of
the
Company (A) during such time that Investor beneficially owns (for purposes
of
Section 13(d) of the Exchange Act) 13.5% or more of the voting power of the
Company, or (B) which when added to the Common Stock then owned by Investor
and
its Affiliates, would result in Investor and its Affiliates beneficially owning
(for purposes of Section 13(d) of the Exchange Act) more than 13.5% of the
voting power of the Company (it being understood, for the avoidance of doubt,
that for purposes of this clause (i) that the Investor shall not be deemed
to
have acquired any such securities of the Company as the result of an acquisition
of voting securities by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned
by
the Investor or its Affiliates to 13.5% or more of the shares of the voting
securities of the Company then outstanding); (ii) make, or in any way
participate, directly or indirectly, in any “solicitation” of “proxies” to vote
(as such terms are used in the Exchange Act), or seek to advise or influence
any
Person or entity with respect to the voting of any voting securities of the
Company; (iii) make any public announcement with respect to, or make any public
proposal for, or public offer of (with or without conditions) any merger,
business combination, recapitalization, restructuring or other extraordinary
transaction involving the Company or any of its securities or material assets
(it being understood that the Company’s Board of Directors may reject in its
sole discretion any non public proposal or offer); (iv) form, join or in any
way
participate in a “group” as defined in Section 13(d)(3) of the Exchange Act in
connection with any of the foregoing; (v) otherwise act or seek to control
or
influence the management, Board of Directors or policies of the Company (other
than as contemplated by the Collaboration and License Agreement or any other
collaboration agreement or undertaking, whether or not in writing, among the
Company or any o its subsidiaries and the Investor or any of its Affiliates);
(vi) take any action that could reasonably be expected to require the Company
to
make a public announcement regarding the possibility of any of the events
described in clauses (i) through (v) above; or (vii) request the Company,
directly or indirectly, to amend or waive any provision of this Section;
provided, that the restrictions imposed by this Section 18 shall not apply
to
passive investments by the Investor or any of its Affiliates, or by an
affiliated pension or employee benefit plan or trust, in publicly traded
securities of the Company or its subsidiaries, or to interest in such securities
comprising part of a broad based, publicly traded market basket or index of
stock approved for any such a plan or trust in which such plan or trust invests,
so long as such investments or interests (together with any securities of the
Company or its subsidiaries into which such investments or interests are
convertible or exchangeable) do not, in the aggregate, exceed 2% of then
outstanding publicly traded securities of the Company and its subsidiaries.
The
Company agrees that upon publicly disclosing or filing (a) any “standstill”
restrictions in respect of the Company entered into after the date of this
Agreement binding upon any Similarly Situated Person or (b) any amendment to
any
“standstill” restrictions in respect of the Company binding upon any Similarly
Situated Person, in each case, that contains terms which are more favorable
to,
or less restrictive on, the Similarly Situated Person than the terms and
conditions contained in this Section are to the Investor, then the Company
will
promptly (but in any event within 4 business days) provide to the Investor
an
amendment to this Section 18 reflecting any such more favorable or less
restrictive terms or conditions, which upon the written concurrence of the
Investor shall be deemed to constitute an amendment hereof.
19. No
Required Sale.
Nothing in this Agreement shall be deemed to create an independent obligation
on
the part of any Holder to sell any Registrable Shares pursuant to any effective
registration statement.
20. Legends.
Investor agrees and consents to (a) the entry of stop transfer instructions
with the Company’s transfer agent and registrar against the transfer of, and/or
(b) the placement of legends on certificates representing Investor’s
Securities held by the Investor, if necessary, with respect to the restrictions
set forth in Section 11.
21. Notices.
Unless
otherwise provided, all notices, requests, consents and other communications
hereunder (“Notices”)
to any
party shall be given in writing and shall be deemed effectively given upon
personal delivery to the party to be notified or five business days after
being duly sent by first class registered or certified mail, or other courier
service, postage prepaid, or the following business day after being faxed with
a
confirmation copy by regular mail, and addressed or faxed to the party to be
notified at the address or fax number indicated for such party, as the case
may
be, set forth below or such other address or fax number, as the case may be,
as
may hereafter be designated in writing by the addressees to the addressor
listing all parties:
To
the
Company:
Momenta
Pharmaceuticals, Inc.
000
Xxxx
Xxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxxxxxxxx 00000
Attention: Chief
Executive Officer
Fax: (000)
000-0000
With
a
copy (which shall not constitute notice) to:
Xxxxxx
Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
00
Xxxxx
Xxxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
Xxxxxx X. Xxxxxx, Esq.
Fax: (000)
000-0000
To
the
Investor:
Novartis
Pharma AG
Xxxxxxxxxxx
00
XX
0000
Xxxxx BS
Attention
Xxxxx Xxxxxxxxx
Fax: x00
00 0000000
With
a
copy (which shall not constitute notice) to:
Cravath,
Swaine & Xxxxx LLP
Worldwide
Plaza
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx, 00000
Attention: Xxxxxx
X. Xxxxxxx, Esq.
Fax: (000)
000-0000
22. Miscellaneous.
(a)
This Agreement and the other writings referred to herein or delivered pursuant
hereto which form a part hereof contain the entire agreement among the parties
with respect to the subject matter hereof and thereof and supersede all prior
and contemporaneous arrangements or understandings, whether written or oral,
with respect thereto.
(b)
The rights, powers and remedies of the parties under this Agreement are
cumulative and not exclusive of any other right, power or remedy which such
parties may have under any other agreement or law. No single or partial
assertion or exercise of any right, power or remedy of a party hereunder shall
preclude any other or further assertion or exercise thereof.
(c)
This Agreement may be amended, and compliance with any provision of this
Agreement may be omitted or waived, only by the written agreement of the Company
and the holders of a majority of the Registrable Shares, provided that
Sections 11, 17 and 18 may be amended, and compliance thereof may be
omitted or waived, only by the written agreement of the Company and the
Investor.
(d)
This Agreement shall be governed by and construed under the laws of the State
of
New York (without regard to the conflict of law principles thereof). Each of
the
parties hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the exclusive jurisdiction of the Federal and state courts
of
the State of New York in any action or proceeding arising out of or relating
to
this Agreement or the agreements delivered in connection herewith or the
transactions contemplated hereby or thereby or for recognition or enforcement
of
any judgment relating thereto, and each of the parties hereby irrevocably and
unconditionally (i) agrees not to commence any such action or proceeding
except in such courts, (ii) agrees that any claim in respect of any such
action or proceeding may be heard and determined in such courts,
(iii) waives, to the fullest extent it may legally and effectively do so,
any objection which it may now or hereafter have to the laying of venue of
any
such action or proceeding in such courts, and (iv) waives, to the fullest
extent permitted by laws, the defense of an inconvenient forum to the
maintenance of such action or proceeding in such courts. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall
be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or
in any other manner provided by laws. Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in
Section 21. Nothing in this Agreement shall affect the right of any party
to this Agreement to serve process in any other manner permitted by
laws.
(e)
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS AGREEMENT MAY INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (I) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
SUCH WAIVERS, (II) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (III) IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 22.
(f)
This
Agreement may be executed in any number of counterparts, each such counterpart
shall be deemed to be an original instrument, and all such counterparts together
shall constitute but one agreement. Any such counterpart may contain one or
more
signature pages. This Agreement may be executed by facsimile signature
pages.
(g)
The titles and subtitles used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this
Agreement.
(h)
Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
names and pronouns shall include the plural and vice-versa. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”, unless the context expressly provides otherwise. All references
herein to Sections, paragraphs, subparagraphs, clauses, Exhibits or Schedules
shall be deemed references to Sections, paragraphs, subparagraphs or clauses
of,
or Exhibits or Schedules to this Agreement, unless the context requires
otherwise. Unless otherwise specified, the words “herein”, “hereof”, “hereto”
and “hereunder” and other words of similar import refer to this Agreement as a
whole and not to any particular provision of this Agreement. The term “or” is
not exclusive. The word “extent” in the phrase “to the extent” shall mean the
degree to which a subject or other thing extends, and such phrase shall not
mean
simply “if”. The phrase “date hereof” or “date of this Agreement” shall be
deemed to refer to July 25, 2006. Any contract, instrument or law defined
or referred to herein or in any contract or instrument that is referred to
herein means such contract, instrument or law as from time to time amended,
modified or supplemented, including (in the case of contracts or instruments)
by
waiver or consent and (in the case of laws) by succession of comparable
successor laws and references to all attachments thereto and instruments
incorporated therein. References to a Person are also to its permitted
successors and assigns.
(i)
If one or more provisions of this Agreement are held to be unenforceable under
applicable law, in any jurisdiction, such provision shall be ineffective, as
to
such jurisdiction, and the balance of the Agreement shall be interpreted as
if
such provision were so excluded, without invalidating the remaining provisions
of this Agreement and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction.
(j)
Neither this Agreement nor any of the rights, interests or obligations under
this Agreement (except as specifically provided in Section 11 of this
Agreement) may be assigned
or delegated, in whole or in part, by operation of law or otherwise by the
Investor or any Holder without the prior written consent of the Company, and
any
such assignment without such prior written consent shall be null and void.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of, and be enforceable by, the parties hereto and their
respective successors and permitted assigns.
(k)
The
parties hereto agree that irreparable damage would occur in the event that
any
of the provisions of this Agreement were not performed in accordance with its
specific terms or was otherwise breached. In
addition to any and all other remedies that may be available at law in the
event
of any breach of this Agreement, the parties shall be entitled to specific
performance of the agreements and obligations hereunder and to such other
injunctive or other equitable relief as may be granted by a court of competent
jurisdiction. Each
party further agrees that, in the event of any action for an injunction or
other
equitable remedy in respect of such breach or enforcement of specific
performance, it will not assert the defense that a remedy at law would be
adequate.
(l)
The Company hereby represents that the rights granted to the Holders of
Registrable Shares hereunder do not in any way conflict with and are not
inconsistent with any other agreements to which the Company is a party or by
which it is bound relating to the subject matter hereof.
(Signature
Page Follows)
IN
WITNESS WHEREOF, the parties have executed and delivered this Investor Rights
Agreement as of the date first above written.
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NOVARTIS
PHARMA AG,
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By
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/s/ Xxxxx Xxxxxxxxx |
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Title:
Authorized Signatory
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MOMENTA
PHARMACEUTICALS,
INC.
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By
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/s/
Xxxx Xxxxx
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Name:
Xxxx Xxxxx
Title:
President and CEO
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Signature
Page Investor Rights Agreement
