Exhibit 10.7
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of August 22, 1997 by
and between Centocor, Inc., a Pennsylvania corporation ("Centocor" or the
"Holder") and Centocor Diagnostics, Inc., a Pennsylvania corporation (the
"Company").
RECITALS:
Centocor is a corporation duly organized under the laws of the Commonwealth
of Pennsylvania, with its principal executive offices located in Malvern,
Pennsylvania. The Company is a corporation, formed under the laws of the
Commonwealth of Pennsylvania, with its principal executive offices located in
Malvern, Pennsylvania.
Centocor currently owns all of the outstanding shares of common stock of
the Company. The Company is contemplating the issuance of shares of the
Company's Class A Common Stock in an initial public offering pursuant to a
Registration Statement on Form S-1. After such offering, Centocor will be the
beneficial and record owner of 7,100,000 shares of the Company's Class B Common
Stock, which are convertible into 7,100,000 shares of the Class A Common Stock.
In conjunction with the offering, Centocor and the Company desire to enter
into this Agreement to provide Centocor with certain registration rights as
provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS. As used herein, each of the following terms shall have
the respective meaning assigned to it below:
"Affiliate" shall mean any Person that directly or indirectly controls, is
con trolled by, or is under common control with such Person. A Person shall be
deemed to control another Person if such Person owns 50% or more of the equity
interests in the "controlled" Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of stock or partnership interests,
by contract, agreement or understanding (whether oral or written), or otherwise.
"Class A Common Stock" shall mean the Company's $.01 par value Class A
Common Stock.
"Class B Common Stock" shall mean the Company's $.01 par value Class B
Common Stock.
"Designated Transferee" shall have the meaning set forth in Section 10
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
or any successor act then in effect.
"Holders" shall mean Centocor, any Affiliate of Centocor (other than the
Company) and any Designated Transferees who are holders of record of any
Registrable Shares, and any combination of one or more such Holders.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Person" shall mean any individual, corporation, association, partnership,
group (as defined in Section 13(d)(3) of the Exchange Act), limited liability
company, joint venture, business trust or unincorporated organization, or a
government or any agency or political subdivision thereof.
"Registrable Shares" shall mean (i) the 7,100,000 shares of Class A Common
Stock that would result upon the conversion of the 7,100,000 shares of Class B
Common Stock owned by Centocor on the date of this Agreement, and (ii) any
shares of Class A Common Stock acquired by a Holder directly or upon exercise of
conversion of any equity securities of the Company issued or distributed after
the date of this Agreement to a Holder in respect of Registrable Shares by way
of any stock dividend, stock split or other distribution or any recapitalization
or reclassification. As to any particular Registrable Share, such Registrable
Share shall cease to be a Registrable Share when (x) it shall have been sold,
transferred or otherwise disposed of or exchanged pursuant to a registration
statement under the Securities Act; (y) it shall have been distributed to the
public pursuant to Rule 144 (or any successor provision) under the Securities
Act; or (z) it shall have been sold or transferred to a Person other than a
Designated Transferee in a private transaction effected other than pursuant to a
registration statement.
"Registration Expenses" shall have the meaning set forth in Section 7(a)
hereof.
"SEC" shall mean the United States Securities and Exchange Commission or
any successor agency thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
successor act then in effect.
2. REGISTRATION ON REQUEST.
(A) REQUEST BY HOLDERS. Upon the written request of the Holders of at
least 10% of the Registrable Shares then outstanding that the Company effect the
registration under the Securities Act of all or part of such Holders'
Registrable Shares, and specifying the amount (which shall not be less than 10%
of the Registrable Shares
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then outstanding in the aggregate) and the intended method of disposition
thereof, the Company shall, as expeditiously as possible, use its best efforts
to effect the registration under the Securities Act of: (i) the Registrable
Shares that the Company has been so requested to register by Holders of at least
10% of the Registrable Shares; and (ii) all other Registrable Shares that the
Company has been requested to register by any other Holder thereof by written
request received by the Company within 30 days after the giving of such written
notice by the Company (which request shall specify the intended method of
disposition of such Registrable Shares); provided, however, that the Company
shall not be obligated to file a registration statement relating to a
registration request under this Section 2(a) if the registration request is
delivered (x) after delivery of a notice by the Company of an intended
registration and prior to the effective date of the registration statement
referred to in such notice, or (y) within a period of 90 days after the
effective date of any other registration statement of the Company requested by a
Holder pursuant to this Section 2 or pursuant to which the Holders included
Registrable Shares.
(B) PRIORITY IN REQUESTED REGISTRATIONS. If a requested registration
pursuant to this Section 2 involves an underwritten offering and the managing
underwriter in good faith advises the Company in writing that, in its opinion,
the number of securities requested to be included in such registration
(including securities of the Company that are not Registrable Shares) exceeds
the largest number of securities that can be sold in such offering without
having an adverse effect on such offering (including the price at which such
securities can be sold), then the Company shall include in such registration (i)
first, 100% of the Registrable Shares requested to be registered pursuant to
Section 2(a) hereof (provided that if the number of Registrable Shares requested
to be registered pursuant to Section 2(a) hereof exceeds the number that the
Company has been advised can be sold in such offering without having the adverse
effect referred to above, the number of such Registrable Shares to be included
in such registration by the Holders shall be allocated pro rata among such
Holders on the basis of the relative number of Registrable Shares each such
Holder has requested to be included in such registration); (ii) second, to the
extent that the number of Registrable Shares requested to be registered pursuant
to Section 2(a) hereof is less than the number of securities that the Company
has been advised can be sold in such offering without having the adverse effect
referred to above, such number of shares of equity securities the Company
requests to be included in such registration; and (iii) third, to the extent
that the number of Registrable Shares requested to be included in such
registration pursuant to Section 2(a) hereof and the number of securities that
the Company proposes to sell for its own account are, in the aggregate, less
than the number of equity securities that the Company has been advised can be
sold in such offering without having the adverse effect referred to above, such
number of other securities proposed to be sold by any other Person that, in the
opinion of such managing underwriter, can be sold without having the adverse
effect referred to above (provided that if the number of such securities of such
other Person requested to be registered exceeds the number that the Company has
been advised can be sold in such offering without having the adverse effect
referred to
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above, the number of such securities to be included in such registration
pursuant to this Section 2(c) shall be allocated pro rata among all such other
Persons on the basis of the relative number of securities each such other Person
has requested to be included in such registration).
(C) ADDITIONAL RIGHTS. If the Company shall at any time grant to any other
holder of equity securities of the Company any rights to request the Company to
effect the registration of any such shares of equity securities on terms more
favorable to such other Person than the terms set forth in this Section 2 and in
Section 5 hereof, the terms of this Section 2 and of Section 5 hereof shall be
deemed amended or supplemented to the extent necessary to provide the Holders
such more favorable rights and benefits. In no event shall the Company grant to
any person any rights to request the Company to effect the registration of any
shares of equity securities of the Company on terms that are adverse to rights
of the Holders set forth in this Section 2 and in Section 3 hereof.
3. INCIDENTAL REGISTRATIONS.
(A) RIGHT TO INCLUDE REGISTRABLE SHARES. Each time the Company shall
determine to file a registration statement under the Securities Act in
connection with a proposed offer and sale for cash of any equity securities
(other than an offering of debt securities that are convertible into equity
securities or an offering of equity securities pursuant to a benefit plan
established for employees, directors or consultants of the Company) either by
it or by any holders of its outstanding equity securities, the Company shall
give prompt written notice of its determination to each Holder and of such
Holder's rights under this Section 3, at least 60 days prior to the anticipated
filing date of such registration statement. Upon the written request of any
Holder made within 30 days after the receipt of any such notice from the
Company (which request shall specify the number of Registrable Shares intended
to be disposed of by such Holder), the Company shall use its best efforts to
effect the registration under the Securities Act of all Registrable Shares that
the Company has been so requested to register by the Holders thereof, to the
extent required to permit the disposition of the Registrable Shares so to be
registered; provided, however, that (i) if, at any time after giving written
notice of its intention to register any securities and prior to the effective
date of the registration statement filed in connection with such registration,
the Company shall determine for any reason not to proceed with the proposed
registration of the securities to be sold by it, the Company may, at its
election, give written notice of such determination to each Holder of
Registrable Shares and thereupon shall be relieved of its obligation to register
any Registrable Shares in connection with such registration (but not from its
obligation to pay the Registration Expenses in connection therewith); and (ii)
if such registration involves an underwritten offering, all Holders of
Registrable Shares requesting to be included in the Company's registration must
sell their Registrable Shares to the underwriters on the same terms and
conditions as apply to the Company, with such differences, including any with
respect to indemnification and liability insurance, as may be
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customary or appropriate in combined primary and secondary offerings. If a
registration requested pursuant to this Section 3(a) involves an underwritten
public offering, any Holder of Registrable Shares requesting to be included in
such registration may elect, in writing prior to the effective date of the
registration statement filed in connection with such registration, not to
register such securities in connection with such registration. No registration
effected under this Section 3 shall relieve the Company of its obligations to
effect registrations upon request under Section 2 hereof.
(B) PRIORITY IN INCIDENTAL REGISTRATIONS. If a registration pursuant to
this Section 3 involves an underwritten offering and the managing underwriter in
good faith advises the Company in writing that, in its opinion, the number of
securities that the Company, the Holders and any other Persons intend to include
in such registration exceeds the largest number of securities that can be sold
in such offering without having an adverse effect on such offering (including
the price at which such securities can be sold), then the Company shall include
in such registration (i) first, 100% of the securities the Company proposes to
sell for its own account; (ii) second, to the extent that the number of
securities that the Company proposes to sell is less than the number of
securities that the Company has been advised can be sold in such offering
without having the adverse effect referred to above, such number of Registrable
Shares that the Holders have requested to be included in such registration
pursuant to Section 3(a) hereof and that, in the opinion of such managing
underwriter, can be sold without having the adverse effect referred to above;
and (iii) third, to the extent that the number of securities that are to be
included in such registration pursuant to clauses (i) and (ii) is, in the
aggregate, less than the number of securities that the Company has been advised
can be sold in such offering without having the adverse effect referred to
above, such number of other securities requested to be included in the offering
for the account of any other Persons that, in the opinion of such managing
underwriter, can be sold without having the adverse effect referred to above.
4. HOLDBACK AGREEMENTS.
(A) AGREEMENTS OF THE HOLDERS. If any registration of Registrable Shares
shall be in connection with an underwritten public offering, the Holders shall
not effect any public sale or distribution (except in connection with such
public offering) of any equity securities of the Company, or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (in each case, other than as part of such underwritten public offering),
during the 180-day period (or such lesser period as the managing underwriter may
permit) beginning on the effective date of such registration, if, and to the
extent, the managing underwriter of any such offering determines such action is
necessary or desirable to effect such offering; provided, however, that each
Holder has received the written notice required by Section 3(a) hereof;
provided, however, that each Holder shall not be obligated to comply with such
restrictions arising as a result of an underwritten public offering subject to
Section 4 hereof more than once in any 12-month period.
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(B) AGREEMENT OF THE COMPANY. If any registration of Registrable Shares
shall be in connection with any underwritten public offering, the Company shall
not effect any public sale or distribution (except in connection with such
public offering) of any of its equity securities or of any security convertible
into or exchangeable or exercisable for any of its equity securities (in each
case other than as part of such underwritten public offering) during the 180-day
period (or such lesser period as the managing underwriter may permit) beginning
on the effective date of such registration, and the Company shall use its best
efforts to cause each member of the management of the Company who holds any
equity security and each other holder of 5% or more of the outstanding shares of
any equity security, or of any security convertible into or exchangeable or
exercisable for any equity security, of the Company purchased from the Company
(at any time other than in a public offering) to so agree.
5. REGISTRATION PROCEDURES.
(A) REGISTRATION. If and whenever the Company is required by the
provisions of Sections 2 or 3 hereof to use its best efforts to effect or cause
the registration of Registrable Shares, the Company shall as expeditiously as
possible:
(i) prepare and, in any event within 60 days after the end of the 30-day
period within which a request for registration may be given to the Company as
specified in Sections 2(a) and 3(a) hereof, file with the SEC a registration
statement with respect to such Registrable Shares and use its best efforts to
cause such registration statement to become effective;
(ii) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period not in
excess of 270 days and to comply with the provisions of the Securities Act, the
Exchange Act, and the rules and regulations promulgated thereunder with respect
to the disposition of all the securities covered by such registration statement
during such period in accordance with the intended methods of disposition by the
Holders thereof set forth in such registration statement; provided, however,
that (A) before filing a registration statement (including an initial filing) or
prospectus, or any amendments or supplements thereto, the Company shall furnish
to one counsel selected by the Holders of a majority of the Registrable Shares
covered by such registration statement copies of all documents proposed to be
filed, which documents shall be subject to the review and comment of such
counsel, and (B) the Company shall notify each Holder of Registrable Shares
covered by such registration statement of any stop order issued or threatened by
the SEC, any other order suspending the use of any preliminary prospectus or of
the suspension of the qualification of the registration statement for offering
or sale in any jurisdiction, and take all reasonable actions required to prevent
the entry of such stop order, other order or suspension or to remove it if
entered;
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(iii) furnish to each Holder and each underwriter, if applicable, of
Registrable Shares covered by such registration statement such number of copies
of the registration statement and of each amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and summary prospectus), in conformity with the requirements of the Securities
Act, and such other documents as each Holder of Registrable Shares covered by
such registration statement may reasonably request in order to facilitate the
disposition of the Registrable Shares by such Holder;
(iv) use its best efforts to register or qualify such Registrable Shares
covered by such registration statement under the state securities or blue sky
laws of such jurisdictions as each Holder of Registrable Shares covered by such
registration statement and, if applicable, each underwriter, may reasonably
request, and do any and all other acts and things which may be reasonably
necessary to consummate the disposition in such jurisdictions of the Registrable
Shares owned by such Holder, except that the Company shall not for any purpose
be required to qualify generally to do business as a foreign corporation in any
jurisdiction where, but for the requirements of this clause (iv), it would not
be obligated to be so qualified;
(v) use its best efforts to cause such Registrable Shares covered by such
registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the Holders
thereof to consummate the disposition of such Registrable Shares;
(vi) if at any time when a prospectus relating to the Registrable Shares
is required to be delivered under the Securities Act, any event shall have
occurred as the result of which any such prospectus as then in effect would
include an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, immediately give written notice thereof to each Holder and the
managing underwriter or underwriters, if any, of such Registrable Shares and
prepare and furnish to each such Holder a reasonable number of copies of an
amended or supplemental prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Shares, such prospectus shall
not include an untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading;
(vii) use its best efforts to list any portion of such Registrable Shares
not already listed on any securities exchange on which similar securities of the
Company are then listed, and enter into customary agreements including a listing
application and indemnification agreement in customary form, provided that the
applicable listing requirements are satisfied, and provide a transfer agent and
registrar for such Registrable Shares covered by such registration statement not
later than the effective date of such registration statement;
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(viii) enter into such customary agreements (including an underwriting
agreement in customary form) and take such other actions as each Holder of
Registrable Shares being sold or the underwriter or underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Shares, including customary indemnification and opinions;
(ix) use its best efforts to obtain a "cold comfort" letter or letters
from the Company's independent public accountants in customary form and covering
matters of the type customarily covered by "cold comfort" letters as the Holders
of the Registrable Shares being sold or the underwriters retained by such
Holders shall reasonably request;
(x) make available for inspection by representatives of any Holder of
Registrable Shares covered by such registration statement, by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by such
Holders or any such underwriter, all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries'
officers, directors and employees to supply all information and respond to all
inquiries reasonably requested by such Holders or any such representative,
underwriter, attorney, accountant or agent in connection with such registration
statement;
(xi) promptly prior to the filing of any document that is to be
incorporated by reference into the registration statement or the prospectus
(after initial filing of the registration statement), provide copies of such
document to counsel to the Holders of Registrable Shares covered by such
registration statement and to the managing underwriter, if any, make the
Company's representatives available for discussion of such document and make
such changes in such document prior to the filing thereof as counsel for such
Holders or underwriter may reasonably request;
(xii) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC and make available to its security holders, as
soon as reasonably practicable after the effective date of the registration
statement, an earnings statement which shall satisfy the provisions of Section
11(a) of the Securities Act and the rules and regulations promulgated
thereunder;
(xiii) not later than the effective date of the applicable registration
statement, use its best efforts to provide a CUSIP number for any portion of
such Registrable Shares not already included in a CUSIP number for similar
securities of the Company, and provide the applicable transfer agents with
printed certificates for the Registrable Shares which are in a form eligible for
deposit with the Depository Trust Company;
(xiv) notify counsel for the Holders of Registrable Shares included
in such registration statement and the managing underwriter or underwriters, if
any, immedi-
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ately and confirm the notice in writing (A) when the registration statement, or
any post-effective amendment to the registration statement, shall have become
effective, or any supplement or amendment to the prospectus shall have been
filed, (B) of the receipt of any comments from the SEC and (C) of any request of
the SEC to amend the registration statement or amend or supplement the
prospectus or for additional information; and
(xv) cooperate with each seller of Registrable Shares and each underwriter,
if any, participating in the disposition of such Registrable Shares and their
respective counsel in connection with any filings required to be made with the
NASD.
(B) SUSPENSION OF SALES OF REGISTRABLE SHARES. Each Holder of Registrable
Shares hereby agrees that, upon receipt of any notice from the Company of the
happening of any event of the type described in Section 5(a)(vi) hereof, such
Holder shall forthwith discontinue disposition of such Registrable Shares
covered by such registration statement or related prospectus until such Holder's
receipt of the copies of the supplemental or amended prospectus contemplated by
Section 5(a)(vi) hereof, and, if so directed by the Company, such Holder shall
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Shares at the time of receipt of such notice. In the
event that the Company shall give any such notice, the period mentioned in
Section 5(a)(ii) hereof shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 5(a)(vi) hereof and including the date when such Holder shall have
received the copies of the supplemental or amended prospectus contemplated by
Section 5(a)(vi) hereof. If for any other reason the effectiveness of any
registration statement filed pursuant to Section 2 hereof is suspended or
interrupted prior to the expiration of the time period regarding the maintenance
of the effectiveness of such registration statement required by Section 5(a)(ii)
hereof so that Registrable Shares may not be sold pursuant thereto, the
applicable time period shall be extended by the number of days equal to the
number of days during the period beginning with the date of such suspension or
interruption to and ending with the date when the sale of Registrable Shares
pursuant to such registration statement may be recommenced.
(C) INFORMATION REGARDING THE HOLDERS. Each Holder hereby agrees to
provide the Company, upon receipt of its request, with such information about
such Holder to enable the Company to comply with the requirements of the
Securities Act and to execute such certificates as the Company may reasonably
request in connection with such information and otherwise to satisfy any
requirements of law.
6. UNDERWRITTEN REGISTRATIONS. Subject to the provisions of Sections
2 and 3 hereof, any of the Registrable Shares covered by a registration
statement may be sold in an underwritten offering at the discretion of the
Holder thereof. In the case of an underwritten offering pursuant to Section 3
hereof, the managing underwriter that will administer the offering shall be
selected by the Company; provided, however,
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that such managing underwriter shall be reasonably satisfactory to the Holders
of a majority of the Registrable Shares to be registered. In the case of any
underwritten offering pursuant to Section 2 hereof, the managing underwriter
that will administer the offering shall be selected by the Holders of a majority
of the Registrable Shares to be registered; provided, however, that such
underwriter shall be reasonably satisfactory to the Company.
7. EXPENSES.
(A) EXPENSES PAYABLE BY THE COMPANY. Subject to Section 7(b) hereof, the
Company shall pay all fees, costs and expenses of the first three registrations
pursuant to Section 2 hereof, and of all registrations pursuant to Section 3
hereof, including all SEC and stock exchange or NASD registration and filing
fees and expenses, reasonable fees and expenses of any "qualified independent
underwriter" and its counsel as may be required by the rules of the NASD, fees
and expenses of compliance with state securities or blue sky laws (including
reasonable fees and disbursements of counsel for the underwriters, if any, in
connection with blue sky qualifications of the Registrable Shares), rating
agency fees, printing expenses (including expenses of printing certificates for
Registrable Shares and prospectuses), messenger, telephone and delivery
expenses, the fees and expenses incurred in connection with the listing of the
securities to be registered on each securities exchange or national market
system on which similar securities issued by the Company are then listed, fees
and disbursements of counsel for the Company and not more than one counsel for
the Holders whose shares are included in the respective registration statement
and all independent certified public accountants (including the expenses of any
annual audit, special audit and "cold comfort" letters required by or incident
to such performance and compliance), the fees and disbursements of the
underwriters customarily paid by issuers or sellers of securities (including
expenses relating to "road shows" and other marketing activities), the
reasonable fees and expenses of special experts required to be retained by the
Company in connection with such registration, and the reasonable fees and
expenses of other Persons required to be retained by the Company (collectively,
"Registration Expenses"); provided, however, that Registration Expenses shall
not include (i) any allocation of the overhead of the Company, including any
allocation of the compensation or benefits of employees of the Company that
assist in a registration, (ii) any other expense to the extent it would have
been incurred by the Company in the absence of any sale of securities in
connection with a registration pursuant to this Agreement (including the cost of
the Company's annual audit), or (iii) any expenses for any registration
proceeding begun pursuant to Section 2 hereof and subsequently withdrawn by the
Holder requesting such registration.
(B) FEES AND EXPENSES PAYABLE BY THE HOLDERS. The Holders shall pay the
following: (i) any underwriting discounts or commissions or transfer taxes, if
any, attributable to the sale of Registrable Shares by the Holders pursuant to
this Agreement, (ii) all fees, costs and expenses of counsel to the Holders in
connection with any registration pursuant to this Agreement except as provided
in Section 7(a) hereof, (iii)
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all fees, costs and expenses for any registration proceeding begun pursuant to
Section 2 hereto and subsequently withdrawn by the Holders requesting such
registration and (iv) all Registration Expenses for any registrations in excess
of three pursuant to Section 2 hereof.
8. INDEMNIFICATION.
(A) INDEMNIFICATION BY THE COMPANY. In the event of any registration of
any securities of the Company under the Securities Act pursuant to Sections 2 or
3 hereof, the Company shall, and it hereby does, indemnify and hold harmless, to
the extent permitted by law, each of the Holders of any Registrable Shares
covered by such registration statement, each Affiliate of such Holder (other
than the Company) and their respective directors and officers, each other Person
who participates as an underwriter in the offering or sale of such securities
and each other Person, if any, who controls such Holder or any such underwriter
within the meaning of the Securities Act (collectively, the "Indemnified
Parties"), against any and all losses, claims, damages or liabilities, joint or
several, and expenses (including any amounts paid in any settlement effected
with the Company's consent, which consent shall not be unreasonably withheld) to
which any Indemnified Party may become subject under the Securities Act, state
securities or blue sky laws, common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof,
whether or not such Indemnified Party is a party thereto) or expenses arise out
of or are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement thereof,
(ii) any 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 any federal, state or common law rule
or regulation applicable to the Company and relating to action required of or
inaction by the Company in connection with any such registration, and the
Company shall reimburse such Indemnified Party for any legal or any other
expenses reasonably incurred by it in connection with investigating or defending
any such loss, claim, liability, action or proceeding; provided, however, that
the Company shall not be liable to any Indemnified Party in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement or amendment or supplement thereof or in any such
preliminary, final or summary prospectus in reliance upon and in conformity with
written information with respect to such Holder furnished to the Company by such
Holder specifically for use in the preparation thereof. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Holder or any Indemnified Party and shall survive the transfer of
such securities by such Holder.
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(B) INDEMNIFICATION BY THE HOLDERS AND THE UNDERWRITERS. The Company
may require, as a condition to including any Registrable Shares in any
registration statement filed in accordance with Section 2 or 3 hereof, that the
Company shall have received an undertaking reasonably satisfactory to it from
the Holders of such Registrable Shares or any underwriter to indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section 8(a)
hereof) the Company with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary,
final or summary prospectus contained therein, or any amendment or supplement,
if such statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information with respect to the
Holders of the Registrable Shares being registered or such underwriter furnished
to the Company by such Holders or such underwriter specifically for use in the
preparation of such registration statement, preliminary, final or summary
prospectus or amendment or supplement, or a document incorporated by reference
into any of the foregoing; provided, however, that no such Holder shall be
liable for any indemnity claims in excess of the amount of the net proceeds
received by such Holder from the sale of Registrable Shares. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Company or any of the Holders, or any of their respective
Affiliates (other than the Company), directors, officers or controlling Persons,
and shall survive the transfer of such securities by such Holder.
(C) NOTICES OF CLAIMS, ETC. Promptly after receipt by an Indemnified
Party hereunder of written notice of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 8, such Indemnified Party shall, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action; provided, however, that the failure
of the Indemnified Party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Section 8, except to the extent
that the indemnifying party is actually materially prejudiced by such failure to
give notice. In case any such action is brought against an Indemnified Party,
the indemnifying party shall be entitled to participate in and to assume the
defense thereof, with counsel satisfactory to such Indemnified Party, and after
notice from the indemnifying party to such Indemnified Party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such Indemnified Party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Indemnified Party shall have the
right, at the sole cost and expense of the indemnifying party, to employ counsel
to represent the Indemnified Party and its respective controlling persons,
directors, officers, employees or agents who may be subject to liability arising
out of any claim in respect of which indemnity may be sought by the Indemnified
Party against such indemnifying party under this Section 8 if (i) the employment
of such counsel shall have been authorized in writing by such indemnifying party
in connection with the defense of such action, (ii) the indemnifying party shall
not have promptly employed counsel reasonably satisfactory
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to the Indemnified Party to assume the defense of such action or counsel, or
(iii) any Indemnified Party shall have reasonably concluded that there may be
defenses available to such Indemnified Party or its respective controlling
persons, directors, officers, employees or agents which are in conflict with or
in addition to those available to an indemnifying party; provided, further,
that the indemnifying party shall not be obligated to pay for more than the
expenses of one firm of separate counsel for the Indemnified Party (in addition
to the reasonable fees and expenses of one firm serving as local counsel). No
indemnifying party shall consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
(D) CONTRIBUTION. If the indemnification provided for in this Section
8 shall for any reason be unavailable to any Indemnified Party under Section
8(a) or 8(b) hereof or is insufficient to hold it harmless in respect of any
loss, claim, damage or liability, or any action in respect of any loss, claim,
damage or liability, or any action in respect thereof referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or liability, or
action in respect thereof (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Indemnified Party and indemnifying
party 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 benefits referred to in clause (i) but also the relative fault of the
Indemnified Party and indemnifying party with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations.
Notwithstanding any other provision of this Section 8(d), no Holder of
Registrable Shares shall be required to contribute an amount greater than the
dollar amount of the proceeds received by such Holder with respect to the sale
of any such Registrable Shares. 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) OTHER INDEMNIFICATION. Indemnification similar to that specified
in the preceding subdivisions of this Section 8 (with appropriate modifications)
shall be given by the Company and each Holder of Registrable Shares with respect
to any required registration or other qualification of securities under any
federal or state law or regulation other than the Securities Act.
(F) NON-EXCLUSIVITY. The obligations of the parties under this
Section 8 shall be in addition to any liability that any party may otherwise
have to any other party.
9. RULE 144. The Company covenants that it will file in a timely
manner the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations promulgated thereunder (or, if the
Company is not
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required to file such reports, it will, upon the request of any Holder of
Registrable Shares, make publicly available such information), and it 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 shall deliver to such Holder a written statement
as to whether it has complied with such requirements.
10. ASSIGNABILITY. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and permitted
assigns. Except as provided herein, neither party may assign any of its rights
or delegate any of its duties under this Agreement without the express consent
of the other party hereto. In addition, and whether or not any express
assignment shall have been made, the provisions of this Agreement that are for
the benefit of the Holder hereto other than the Company shall also be for the
benefit of and enforceable by any of the subsequent Holders of any Registrable
Shares, subject to the provisions contained herein. Any of the Holders may
assign any of its rights or delegate any of its duties under this Agreement, in
whole or in part, without any prior consent of the Company only to a Person (a
"Designated Transferee") who is either (a) an Affiliate of Centocor or (b) is a
transferee of Registrable Shares (whether through purchase, share exchange,
bequest or otherwise) and who agrees to be bound by the terms of this Agreement.
11. NOTICES. Any and all notices, designations, consents, offers,
acceptances or any other communications shall be given in writing by either (a)
personal delivery to and receipted for by the addressee or by (b) telecopy or
registered or certified mail which shall be addressed, in the case of the
Company, to: 000 Xxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000-0000,
attention: Chief Financial Officer; in the case of Holders, to the address or
addresses thereof appearing on the books of the Company or of the transfer agent
and registrar for its Class A Common Stock or Class B Common Stock, as the case
may be. All such notices and communications shall be deemed to have been duly
given and effective (x) when delivered by hand, if personally delivered; (y) two
business days after being deposited in the mail, postage prepaid, if mailed; and
(z) when receipt is confirmed, if telecopied.
12. NO INCONSISTENT AGREEMENTS. The Company shall not hereafter enter into
any agreement with respect to its securities which is inconsistent with the
rights granted to the Holders in this Agreement.
13. SPECIFIC PERFORMANCE. The Company acknowledges that the rights granted
to the Holders in this Agreement are of a special, unique and extraordinary
character, and that any breach of this Agreement by the Company could not be
compensated for by damages. Accordingly, if the Company breaches its obligations
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under this Agreement, the Holders shall be entitled, in addition to any other
remedies that they may have, to enforcement of this Agreement by a decree of
specific performance requiring the Company to fulfill its obligations under
this Agreement.
14. SEVERABILITY. If any provision of this Agreement or any portion
thereof is finally determined by a court of competent jurisdiction to be
unlawful or unenforceable, such provision or portion thereof shall in no way
affect any other provision of this Agreement, the application of any such
provision and any other circumstances, and any portion of such invalidated
provision that is not invalidated by such a determination shall remain in full
force and effect.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which,
together, shall constitute one and the same instrument.
16. DEFAULTS. A default by any party to this Agreement in such party's
compliance with any of the conditions or covenants hereof or performance of any
of the obligations of such party hereunder shall not constitute a default by any
other party.
17. AMENDMENTS, WAIVERS. This Agreement may not be amended, modified
or supplemented and no waivers of or consents to or departures from the
provisions hereof may be given unless consented to in writing by the Company and
the holders of a majority of the Registrable Shares; provided, however, that no
such amendment, supplement, modification or waiver shall deprive any Holder of
any rights under Section 2 or 3 hereof without the consent of such Holder.
18. CONSTRUCTION. The captions contained in this Agreement are for
reference purposes only and shall not constitute a part of this Agreement.
Unless the context requires otherwise, the use of the masculine shall include
the feminine, and the use of the singular shall include the plural.
19. THIRD PARTY BENEFICIARIES. Except as expressly provided in this
Agreement, the parties hereto intend that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any person other than the
parties hereto.
20. ENTIRE AGREEMENT. This Agreement contains the entire agreement
among the parties hereto with respect to the transactions contemplated herein
and understandings among the parties relating to the subject matter hereof.
Any and all previous agreements and understandings between or among the parties
hereto regarding the subject matter hereof are, whether written or oral,
superseded by this Agreement.
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21. GOVERNING LAW. This Agreement is made pursuant to and shall be
construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to that state's conflicts of laws principles. The parties hereto
submit to the non-exclusive jurisdiction of the Courts of the Commonwealth of
Pennsylvania in any action or proceeding arising out of or relating to this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date first written
above.
CENTOCOR DIAGNOSTICS, INC.
By: /s/ R. Xxxxx Xxxxxx
-------------------------------
Title: President
-------------------------
CENTOCOR, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Title: Vice President - Finance
and Chief Financial Officer
----------------------------
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