Exhibit 4.1
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SHAREHOLDER'S AGREEMENT
Between
RAKEPOLL FINANCE N.V.
and
GENSIA, INC.
Dated as of November 12, 1996
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS.............................. 4
SECTION 1.1. Definitions...................................... 4
ARTICLE II
ANTI-DILUTION RIGHTS.......................... 7
SECTION 2.1. Anti-Dilution Rights of Rakepoll................. 7
ARTICLE III
PURCHASE OF COMMON STOCK........................ 8
SECTION 3.1. Purchase of Common Stock by Rakepoll............. 8
ARTICLE IV
CORPORATE GOVERNANCE.......................... 8
SECTION 4.1. Composition of the Board of Directors............ 8
SECTION 4.2. Solicitation and Voting of Shares................ 10
SECTION 4.3. Management of the Company........................ 11
SECTION 4.4. Approval of Investor Directors Required
for Certain Actions..................... 11
SECTION 4.5. Certificate of Incorporation and By-Laws........ 12
SECTION 4.6. Funding Plan.................................... 12
SECTION 4.7. Issuance of Equity Securities During
Standstill Period....................... 12
SECTION 4.8. Management of the Subsidiaries.................. 12
SECTION 4.9. Failure to Comply with this Article IV.......... 13
ARTICLE V
TRANSFER OF COMMON STOCK....................... 13
SECTION 5.1. Transfer of Common Stock........................ 13
ARTICLE VI
REGISTRATION RIGHTS......................... 14
SECTION 6.1. Request for Registration........................ 14
SECTION 6.2. Incidental Registration......................... 16
SECTION 6.3. Registration on Form S-3........................ 17
SECTION 6.4. Obligations of the Company...................... 18
SECTION 6.5. Furnish Information............................. 22
SECTION 6.6. Expenses of Registration........................ 22
SECTION 6.7. Underwriting Requirements....................... 23
SECTION 6.8. Rule 144 and Rule 144A Information.............. 23
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SECTION 6.9. Delay of Registration........................... 23
SECTION 6.10. Indemnification................................. 23
SECTION 6.11. Lock-up in connection with a Registration
of Securities........................... 26
SECTION 6.12. Transfer of Registration Rights................. 27
SECTION 6.13. Selection of Counsel............................ 27
ARTICLE VII
REPRESENTATIONS AND WARRANTIES.................... 27
SECTION 7.1. Representations of the Company.................. 27
SECTION 7.2. Representations of Rakepoll..................... 28
ARTICLE VIII
MISCELLANEOUS............................ 29
SECTION 8.1. Notices......................................... 29
SECTION 8.2. Amendments; No Waivers.......................... 30
SECTION 8.3. Severability.................................... 30
SECTION 8.4. Entire Agreement; Assignment.................... 31
SECTION 8.5. Parties in Interest............................. 31
SECTION 8.6. Specific Performance............................ 31
SECTION 8.7. Governing Law; Consent to Jurisdiction.......... 31
SECTION 8.8. Headings........................................ 32
SECTION 8.9. Counterparts.................................... 32
SECTION 8.10. Effectiveness; Termination...................... 32
SECTION 8.11. Waiver of Jury Trial............................ 32
SCHEDULES
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Schedule 2.1 - Securities Outstanding on Closing Date
Schedule 4.1(b) - Directors to Resign
EXHIBITS
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Exhibit A - Composition of the Board of Directors
Exhibit B - Form of Amended and Restated Certificate of
Incorporation
Exhibit C - Form of Amended By-Laws
Exhibit D - Composition of Boards of Directors and Senior
Management of Subsidiaries
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SHAREHOLDER'S AGREEMENT, dated as of November 12, 1996, between
Rakepoll Finance N.V., a corporation organized under the laws of the Netherlands
Antilles ("Rakepoll"), and Gensia, Inc., a corporation organized under the laws
of the state of Delaware (the "Company").
W I T N E S S E T H
WHEREAS, concurrently herewith, Rakepoll and the Company are entering
into a Stock Exchange Agreement of even date herewith (the "Stock Exchange
Agreement"); and
WHEREAS, the Boards of Directors of Rakepoll and the Company have each
determined to engage in the transactions contemplated by the Stock Exchange
Agreement, pursuant to which the Company will purchase from the stock of
Rakepoll Holding B.V. a corporation organized under the laws of the Netherlands
in consideration for shares of Common Stock and certain additional consideration
(as defined herein); and
WHEREAS, Rakepoll and the Company desire to establish in this
Agreement certain terms and conditions concerning the corporate governance of
the Company after the Closing Date (as defined in the Stock Exchange Agreement)
and certain terms and conditions concerning the acquisition and disposition of
securities of the Company by Rakepoll and its Affiliates.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and agreements contained herein, Rakepoll and the Company hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. As used in this
Agreement, the following terms have the following meanings:
(a) "Affiliate" has the same meaning as in Rule 12b-2 promulgated
under the Exchange Act.
(b) "Associate" has the same meaning as in Rule 12b-2 promulgated
under the Exchange Act.
(c) "Beneficial owner" and to "beneficially own" has the same meaning
as in Rule 13d-3 promulgated under the Exchange Act.
(d) "Board of Directors" means the Board of Directors of the
Company.
(e) "Common Stock" means the common stock, par value $.01 per
share, of the Company.
(f) "Director" means a member of the Board of Directors.
(g) "Equity Security" means any (i) Common Stock, (ii) securities
of the Company convertible into or exchangeable for Common Stock, and
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(iii) options, rights, warrants and similar securities issued by the
Company to acquire Common Stock.
(h) "Exchange Act" means the United States Securities Exchange Act
of 1934, and the rules and regulations promulgated thereunder, as
amended.
(i) "Exon-Xxxxxx" means Section 5021 of the United States Omnibus
Trade and Competitiveness Act of 1988, as amended, and the rules and
regulations thereunder.
(j) "Fair Market Value" means: (i) in the case of a security, the
average of the closing sale prices during the thirty day period immediately
preceding the date in question of such security on the Composite Tape of
the New York Stock Exchange ("NYSE") or, if such security is not quoted on
the Composite Tape, on the NYSE or, if such security is not listed on the
NYSE, on the principal United States securities exchange registered under
the Exchange Act on which such security is listed or, if such Security is
not listed on any such exchange, the average of the closing sale prices or
the average of the closing bid and the asking quotations of such security
during the thirty day period preceding the date of determination on the
Nasdaq National Market or any system then in use or, if no such quotations
are available, the fair market value on the date in question of such
security as determined by a majority of Independent Directors in good
faith; and (ii) in the case of property other than cash or a security, the
fair market value of such property on the date in question as determined by
a majority of Independent Directors in good faith.
(k) "Holder" shall mean any holder of Registrable Securities.
(l) "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations thereunder.
(m) "Independent Director" means a director of the Company (i) who is
not and has never been an officer or employee of the Company, any Affiliate
or Associate of the Company or an entity that derived 10% or more of its
revenues or earnings in its most recent fiscal year from transactions
involving the Company or any Affiliate or Associate of the Company, (ii)
who is not and has never been an officer, employee or director of Rakepoll
any Affiliate or Associate of Rakepoll or an entity that derived more than
10% of its revenues or earnings in its most recent fiscal year from
transactions involving Rakepoll or any Affiliate or Associate of Rakepoll,
(iii) who is not and has never been a professional advisor, including
without limitation, attorneys, accountants and financial advisors, to any
of the Company, Rakepoll or any Affiliate or Associate of either of them,
and (iv) who was on the Closing Date deemed to be, or on or after the
Closing Date was designated as, an Independent Director in accordance with
Section 4.1.
(n) "Investor Directors" means Directors who are designated for such
position by Rakepoll in accordance with Section 4.1.
(o) "Lock-up Period" means the period of time commencing at the
Closing Date and terminating on the date which is 12 months after the
Closing Date.
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(p) "Management Directors" means, at the Closing Date, Directors who
were deemed to be Management Directors in accordance with Section 4.1(b)
and, after the Closing Date, Directors who are designated for
such position in accordance with Section 4.1.
(q) "Preferred Stock" means the Company's $3.75 Convertible
Exchangeable Preferred Stock.
(r) "Rakepoll's Initial Interest" means the number of shares of
outstanding Common Stock that is controlled directly or indirectly by
Rakepoll and the Rakepoll Affiliates immediately upon consummation of the
transactions contemplated by the Stock Exchange Agreement.
(s) "Rakepoll's Interest" means, at any time, the number of shares of
outstanding Common Stock that is controlled directly or indirectly by
Rakepoll and the Rakepoll Affiliates.
(t) "Rakepoll's Initial Percentage Interest" means the percentage of
outstanding Common Stock that is controlled directly or indirectly by
Rakepoll and the Rakepoll Affiliates immediately upon consummation of the
transactions contemplated by the Stock Exchange Agreement.
(u) "Rakepoll's Percentage Interest" means, at any time, the
percentage of outstanding Common Stock that is controlled directly or
indirectly by Rakepoll and the Rakepoll Affiliates.
(v) "Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act and the declaration
or ordering of effectiveness of such registration statement or document.
(w) "Registrable Securities" shall mean (i) any Equity Security held
by Rakepoll that was issued to Rakepoll by the Company pursuant to, or
otherwise acquired by Rakepoll in accordance with, the terms of this
Agreement or the Stock Exchange Agreement, (ii) any common stock issued as
(or issuable upon the conversion or exercise of any warrant, right, option
or other convertible security which is issued as) a dividend or other
distribution with respect to, or in exchange for, or in replacement of,
such Equity Security, and (iii) any common stock issued by way of a stock
split of the Equity Security referred to in clauses (i) or (ii) above. For
purposes of this Agreement, any Registrable Securities shall cease to be
Registrable Securities when (A) a registration statement covering such
Registrable Securities has been declared effective and such Registrable
Securities have been disposed of pursuant to such effective registration
statement, (B) such Registrable Securities shall have been distributed
pursuant to Rule 144 (or any similar provision then in effect) under the
Securities Act, (C) such Registrable Securities are sold by a person in a
transaction in which the rights under the provisions of this Agreement are
not assigned, or (D) such Registrable Securities shall cease to be
outstanding.
(x) "Registration Expenses" shall mean any and all expenses incident
to performance of or compliance with this Agreement, including, without
limitation, (i) all SEC and securities exchange or National Association of
Securities Dealers, Inc. registration and filing fees, (ii) all fees and
expenses of complying with securities or blue sky laws
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(including fees and disbursements of counsel for the underwriters in
connection with blue sky qualifications of the Registrable Securities),
(iii) all printing, messenger and delivery expenses, (iv) all fees and
expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange pursuant to Section 6.4(h), (v) the
fees and disbursements of counsel for the Company and of its independent
public accountants, including the expenses of any special audits and/or
"cold comfort" letters required by or incident to such performance and
compliance, (vi) the reasonable fees and disbursements of one counsel,
other than the Company's counsel, selected by the Holders of a majority of
the Registrable Securities being registered to represent all Holders of the
Registrable Securities being registered in connection with each such
registration (it being understood that any Holder may, at its own expense,
retain separate counsel to represent it in connection with such
registration), and (vii) any fees and disbursements of underwriters
customarily paid by the issuers or sellers of securities, and the
reasonable fees and expenses of any special experts retained in connection
with the requested registration, but excluding underwriting discounts and
commissions and transfer taxes, if any.
(y) "SEC" means the United States Securities and Exchange
Commission.
(z) "Securities Act" means the United States Securities Act of 1933,
and the rules and regulations promulgated thereunder, as amended.
(aa) "Standstill Period" means the period of time commencing at the
Closing Date and terminating on the date which is 12 months after the
Closing Date.
(ab) "Subsidiary" has the same meaning as in Rule 12b-2 promulgated
under the Exchange Act.
(ac) A "Substantial Part" of the Company means more than 33 1/3% of
the Fair Market Value of the total assets of the Company and its
Subsidiaries as of the end of its most recent fiscal quarter ending prior
to the time the determination is made.
ARTICLE II
ANTI-DILUTION RIGHTS
SECTION 2.1. Anti-Dilution Rights of Rakepoll. Subject to Section 3.1
of this Agreement, if at any time the Board of Directors shall authorize the
issuance of Equity Securities (other than the issuance of securities to
officers, employees or directors of the Company or its Subsidiaries pursuant to
any employee compensation or benefit plan approved by the Board of Directors or
pursuant to the terms of securities outstanding on the Closing Date, as set
forth on Schedule 2.1 hereto), then Rakepoll shall have the right to acquire, in
the open market, as permitted by applicable law, up to that number of shares of
Common Stock so that Rakepoll's Percentage Interest after such issuance of
Equity Securities is equal to, but not greater than, Rakepoll's Initial
Percentage Interest.
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ARTICLE III
PURCHASE OF COMMON STOCK
SECTION 3.1. Purchase of Common Stock by Rakepoll. (a) During the
Standstill Period, Rakepoll and the Rakepoll Affiliates shall not directly or
indirectly purchase or otherwise acquire, or propose or offer to purchase or
otherwise acquire, any Common Stock or other securities of the Company, whether
by tender offer, market purchase, privately negotiated purchase, business
combination or otherwise, except (i) with the consent of a majority of the
Independent Directors or (ii) as set forth in subsection (b) below.
(b) The prohibitions contained in Section 3.1(a) shall not apply (i)
in the event of any issuance by the Company of any Equity Securities not
contemplated by the business plan previously agreed to by the parties hereto
(the "Business Plan"), or (ii) following (X) the commencement by any third party
of (1) a bona fide tender or exchange offer to purchase in excess of 20% of the
outstanding shares of Common Stock that the Board of Directors either recommends
acceptance of, expresses no opinion and remains neutral toward or is unable to
take a position with respect to, (2) a bona fide proposal to acquire all or
substantially all of the assets of the Company that the Board of Directors is
actively entertaining and the consummation of which would require approval by
the Stockholders of the Company pursuant to Delaware law or (3) a bona fide
proposal to enter into any other similar business combination transaction with
the Company that the Board of Directors is actively entertaining, in the case of
each of clauses (1)-(3), which shall not have been approved in advance by the
Company or the Board of Directors, or (Y) the Company entering into (or
announcing its intention to do so) a definitive agreement, or an agreement
contemplating a definitive agreement, for any of the transactions described in
clauses (1)-(3) above.
ARTICLE IV
CORPORATE GOVERNANCE
SECTION 4.1. Composition of the Board of Directors. (a) Except as
otherwise provided herein, the Board of Directors shall consist of ten Directors
(of whom at least two shall be independent directors as required by the rules of
the Nasdaq National Market System and who shall be deemed to be Independent
Directors hereunder).
(b) Effective as of the Closing Date, the Company shall cause those of
the current Directors set forth in Schedule 4.1(b) to resign from the Board of
Directors. The Company will cause the Board of Directors to take all necessary
action so that at the Closing Date, the Board of Directors shall consist of (i)
two Directors who are executive officers of the Company (not affiliated with
Rakepoll), who shall be Management Directors hereunder; (ii) three Investor
Directors designated by Rakepoll and (iii) five Independent Directors designated
jointly by the Management Directors and Investor Directors; provided, however,
that in the event that on or prior to the Closing Date the holders of the
Preferred Stock of the Company (other than Rakepoll and its Affiliates) become
entitled to appoint 2 directors (the "Preferred Directors") to the Board of
Directors in accordance with the terms of the Preferred Stock, then (x) the
Board of Directors shall be increased from 10 to 12 Directors and (y) Rakepoll
shall thereafter be entitled to designate an additional Investor Director and
one Independent Director shall
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resign so that up to 4 of the 12 Directors will be Investor Directors. The names
of the members of the Board of Directors at the Closing Date shall be as set
forth in Part 1 of Exhibit A hereto. After the Closing, the composition of the
Board of Directors shall be determined in compliance with Section 4.1(c).
Management Directors, Investor Directors and Independent Directors shall be
apportioned, to the extent possible, equally among the three classes of
Directors.
(c) At all times during the term of this Agreement that Rakepoll's
Interest is:
(i) 50% or above of Rakepoll's Initial Interest, Rakepoll shall
have the right to designate for nomination and approval three Investor
Directors; the Management Directors shall have the right to designate
for nomination and approval two Management Directors; and the five
Independent Directors shall be designated for nomination and approval
jointly by the Management Directors and the Investor Directors;
(ii) 25% or above but less than 50% of Rakepoll's Initial
Interest, Rakepoll shall have the right to designate for nomination
and approval two Investor Directors; and there shall be four
Independent Directors who shall be designated for nomination and
approval jointly by the Management Directors and the Investor
Directors;
(iii) 10% or above but less than 25% of Rakepoll's Initial
Interest, Rakepoll shall have the right to designate for nomination
and approval one Investor Director; and there shall be three
Independent Directors who shall be designated for nomination and
approval jointly by the Management Director and the Investor Director;
and
(iv) below 10% of Rakepoll's Initial Interest, Vermouth shall have
no right to designate any Investor Directors or Independent Directors,
and the Management Directors shall have no right to designate any
Management Directors or Independent Directors;
in each case as set forth in Part 2 of Exhibit A hereto. Either (A) at any time
prior to the Closing or (B) after the Closing, if the Investor Directors have
voted for the payment of the dividend owed on the Preferred Stock, in the event
that the holders of the Preferred Stock become entitled to appoint the Preferred
Directors, for so long as such holders are entitled to appoint the Preferred
Directors, the composition of the Board of Directors in the case of each of
(i)-(iv) above shall be as set forth in Part 3 of Exhibit A hereto.
If at any time the Rakepoll Interest should be reduced with the result that, in
accordance with paragraphs (i) through (iv) above, the number of directors which
Rakepoll is entitled to designate is reduced, then such entitlement reduction
shall extinguish any right Rakepoll may have hereunder to designate a greater
number of directors, notwithstanding any increase in the Rakepoll Interest which
may occur after such entitlement reduction.
Vacancies on the Board of Directors which result from a reduction in Rakepoll's
and the Management Directors' entitlement to designate directors in accordance
with the foregoing shall be filled by election by the
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stockholders at large of the Company, in accordance with applicable law, the
Company's Certificate of Incorporation and its Bylaws.
(d) If at any time the number of Investor Directors or Management
Directors on the Board of Directors exceeds the number of such Directors that
Rakepoll or the Management Directors, as the case may be, has the right to
designate in accordance with this Section 4.1, then Rakepoll or the Management
Directors, as appropriate, shall promptly cause to resign, and take all other
action reasonably necessary to cause the prompt removal of, such number of
Investor Directors or Management Directors, as appropriate, necessary to cause
the composition of the Board of Directors to conform to the provisions of
Section 4.1(c). In the event that additional Investor Directors or Management
Directors are required to be designated so that the composition of the Board of
Directors conforms hereto, then the Investor Directors or the Management
Directors, as appropriate, shall designate replacement directors in accordance
with Section 4.1(c).
(e) Subject to Section 4.1(d), Rakepoll and the Management Directors,
respectively, shall have the right to designate any replacement for any Investor
Director or Management Director, as applicable, designated in accordance with
Section 4.1 by Rakepoll or the Management Directors, respectively, at the
termination of such director's term or upon death, resignation, retirement,
disqualification, removal from office or other cause; provided, however, that if
at any time there are no Management Directors remaining on the Board of
Directors, then the Independent Directors shall designate a member of the senior
management of the Company who is not an affiliate of Rakepoll (other than by
virtue of being a senior manager of the Company) as a replacement(s) for such
Management Director.
(f) No individual who is an officer, director, partner or principal
stockholder of any "competitor" of the Company or any of its Subsidiaries (other
than Rakepoll, its Affiliates or officers, directors, partners or principal
stockholders thereof) shall serve as a Director.
For purposes hereof, an entity shall be deemed to be a "competitor" of the
Company if such entity (i) is engaged in the production of injectable generic
pharmaceuticals or fine chemical finished products, or (ii) actually
manufactures any product which is substantially similar in use or purpose to any
product manufactured by the Company, in development by the Company, or in the
funding plan agreed to by the parties hereto (the ("Funding Plan") for
development by the Company or (iii) engaged in the field of oncology or (iv) is
engaged in a business such that the reasonable inference is that such entity is
engaged in substantially the same business as the Company.
SECTION 4.2. Solicitation and Voting of Shares. (a) The Company shall
use its best efforts to solicit from the stockholders of the Company eligible to
vote for the election of Directors proxies in favor of the nominees designated
in accordance with Section 4.1.
(b) In any election of Directors or any meeting of the stockholders of
the Company called expressly for the removal of Directors, Rakepoll and its
Affiliates will vote all of their shares of Common Stock (i) in favor of any
Director or nominee as provided in Section 4.1, (ii) in favor of the removal of
any Director as provided in Section 4.1(d), and (iii) otherwise against the
removal of any director designated under Section 4.1, provided that no director
shall be required to breach his fiduciary duties as a result of this clause
(iii). In addition Rakepoll shall, and shall use its
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best efforts to cause its Affiliates to, take such actions as are necessary as
stockholders of the Company to give effect to the provisions of this Agreement.
Subject to Section 4.8, in all other matters submitted to a vote of the Company
stockholders, Rakepoll and its Affiliates may vote any or all of their shares in
their sole discretion.
SECTION 4.3. Management of the Company. (a) At the Closing Date, (i)
An Independent Director shall serve as the non-executive Chairman of the Board
of Directors upon the mutual agreement of the Investor Directors and the
Management Directors; (ii) Xxxxx X. Xxxx shall serve as President and Chief
Executive Officer of the Company; and (iii) Xxxxxxx X. Xxxxxx shall serve as
Executive Vice President of the Company. Each of the Chairman of the Board,
Xxxxx X. Xxxx and Xxxxxxx X. Xxxxxx shall serve in accordance with the
Certificate of Incorporation and By-laws of the Company.
(b) All necessary action to give effect to Section 4.3(a), including
the resignation of Xxxxx X. Xxxx as Chairman of the Board of Directors effective
as of the Closing, shall be taken, or caused to be taken, by the Company.
(c) At the Closing Date, an Executive Operating Committee, which
shall be a management committee and not a committee of the Board of
Directors, shall be established, consisting of Xxxxx Xxxxx, the President and
Chief Executive Officer, the President of Gensia Laboratories, Inc. and the
Executive Vice President. Xxxxx Xxxxx shall serve as Chairman of the
Executive Operating Committee.
SECTION 4.4. Approval of Investor Directors Required for Certain
Actions. At all such times that Rakepoll's Interest is greater than or equal to
50% of Rakepoll's Initial Interest, the approval of the Investor Directors shall
be required for the Board of Directors to approve and authorize any of
the following:
(a) the entry by the Company or any of its Subsidiaries into any
merger or consolidation, or the acquisition by the Company or any of its
Subsidiaries of any business or assets that would constitute a Substantial
Part of the business or assets of the Company, whether such acquisition be
by merger or consolidation or the purchase or sale of stock or assets or
otherwise;
(b) the sale, lease, pledge, grant of security interest in, license,
transfer or other disposal by the Company or any of its Subsidiaries of all
or substantially all of the business or assets of the Company;
(c) the dissolution of the Company; the adoption of a plan of
liquidation of the Company; any action by the Company or any Significant
Subsidiary (as such term is defined in Rule 12b-2 promulgated under the
Exchange Act) thereof to commence any suit, case, proceeding or other
action (A) under any existing or future law of any jurisdiction relating to
bankruptcy, insolvency, reorganization or relief of debtors seeking to have
an order for relief entered with respect to the Company or any Significant
Subsidiary thereof, or seeking to adjudicate the Company or any Significant
Subsidiary thereof a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to the Company or any Significant Subsidiary
thereof, or (B) seeking appointment of a
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receiver, trustee, custodian or other similar official for the Company or
any Significant Subsidiary thereof, or for all or any Substantial Part of
the assets of the Company or any Significant Subsidiary thereof, or making
a general assignment for the benefit of the creditors of the Company or any
Significant Subsidiary thereof;
(d) the payment of any extraordinary dividend by the Company;
(e) the issuance of debt securities by the Company such that the
principal amount of such debt securities outstanding subsequent to such
issuance is equal to or greater than one hundred and ten percent (110%) of
the aggregate principal amount of debt securities contemplated to be
outstanding at such time under the Business Plan;
(f) the issuance of Equity Securities by the Company such that the
number of shares of such Equity Securities outstanding subsequent to such
issuance is equal to or greater than one hundred and ten percent (110%) of
the aggregate number of Equity Securities contemplated to be outstanding at
such time under the Business Plan; and
(g) the issuance of any debt or equity securities or other capital
stock of any of its Subsidiaries, except the issuance of shares of capital
stock of the Company or options to purchase such shares pursuant to any
employee compensation or benefit plan approved by the Board of Directors or
pursuant to the terms of securities outstanding on the Closing Date, as set
forth in Schedule 2.1 hereto.
If the Company enters into governance arrangements with respect to Automedics
Development, Inc. ("Automedics") which are acceptable to the Investor Directors,
then Automedics will not constitute a Subsidiary for purposes of
this Section 4.4.
SECTION 4.5. Certificate of Incorporation and By-Laws. The Company
shall take or cause to be taken all lawful action necessary to ensure at all
times that the Company's Certificate of Incorporation and By-Laws are not, at
any time, inconsistent with the provisions of this Agreement. In furtherance of
the foregoing, at the special stockholders meeting called to approve the Stock
Exchange Agreement and the transactions set forth therein, the Company agrees to
submit to its stockholders, certain amendments to the Company's Certificate of
Incorporation and By-Laws substantially in the form of Exhibits B and C hereto.
SECTION 4.6. Funding Plan. The Funding Plan sets forth the funding
plan for the Company for the 3-year period beginning on the date hereof. The
Funding Plan shall be a rolling funding plan and shall be reviewed at least once
a year by the Board of Directors so as to ensure a rolling three-year business
plan. The Funding Plan may be modified only with the approval of the Board of
Directors.
SECTION 4.7. Issuance of Equity Securities During Standstill Period.
No issuance of Equity Securities shall take place during the Standstill Period
except (i) in accordance with the Funding Plan or (ii) with the approval of the
Investor Directors pursuant to Section 4.4(d).
SECTION 4.8. Management of the Subsidiaries. (a) (i) Rakepoll
shall initially have the right to designate a majority of the directors and
the senior managers of each of SICOR S.p.A., Sintesis Xxxxx X.X. de C.V. and
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Lermery S.A. de C.V. and (ii) the Management Directors shall be entitled to
designate the balance of the directors and senior managers of each such company,
each of whom shall serve at the pleasure of the Board of Directors of the
Company. The Investor Directors shall have the right to nominate for the
consideration of the Board of Directors replacements for all the directors and
senior managers designated by Rakepoll in accordance with the previous sentence.
The composition at the Closing Date of the board of directors and senior
management of each such company is set forth in Part 1 of Exhibit D hereto.
(b) With respect to Gensia Laboratories, Inc., Rakepoll shall have the
right to designate one director. The composition at the Closing Date of the
board of directors of Gensia Laboratories, Inc. is set forth in Part 2 of
Exhibit D hereto.
SECTION 4.9. Failure to Comply with this Article IV. In addition to
any other remedy at law or in equity which Rakepoll may have, in the event that
any action is taken or omitted to be taken in violation of this Article IV which
results in the failure to nominate or solicit proxies for the election of the
Investor Directors or the failure to elect Investor Directors, in each case as
set forth herein, the taking of any action specified in Section 4.4(a), or
Section 4.4(b) without the required approvals specified therein, or the failure
to comply with Sections 4.1(d) and 4.1(e) hereof, the provisions of Section
4.2(b) and Articles III and V hereof shall as of the date of such occurrence or
omission be of no further force or effect.
ARTICLE V
TRANSFER OF COMMON STOCK
SECTION 5.1. Transfer of Common Stock. (a) During the Lock-Up
Period, Rakepoll will not, and will not permit any Rakepoll Affiliate,
directly or indirectly, to sell, transfer or otherwise dispose of any shares
of Common Stock.
(b) During the Lock-Up Period, Rakepoll shall not sell, transfer or
otherwise dispose of any of the capital stock of any Subsidiary of Rakepoll that
owns shares of Common Stock, except to an Affiliate of Rakepoll; provided that
such Affiliate agrees in writing to be bound by the terms and conditions of this
Agreement.
(c) The prohibitions in Sections 5.1(a) and 5.1(b) shall not apply
following the commencement by any third party of a bona fide tender or exchange
offer to purchase in excess of 20% of the outstanding shares of Common Stock
that the Board of Directors either recommends acceptance of, expresses no
opinion and remains neutral towards, or is unable to take a position with
respect to.
(d) Rakepoll and its Affiliates may not sell, transfer or otherwise
convey to any single third party or single group acting in concert all of
Rakepoll's Initial Interest without obtaining the approval of at least a
majority of the Independent Directors of such sale to such single third party or
group, such approval not to be unreasonably withheld and such determination of
the Independent Directors to be given to Rakepoll within 10
13
days of notification to the Board of Directors by Rakepoll of such
contemplated sale.
(e) Proposed transfers of shares of Common Stock that are not in
compliance with this Article V shall be of no force or effect and the Company
shall not be required to register on its stock records any such transfer.
ARTICLE VI
REGISTRATION RIGHTS
SECTION 6.1. Request for Registration. (a) At any time and from time
to time on and after the first anniversary of the Closing Date, the Holders of
Common Stock that are subject to this Agreement (the "Initiating Holders") may
request in a written notice that the Company file a registration statement under
the Securities Act (or a similar document pursuant to any other statute then in
effect corresponding to the Securities Act) covering the registration of
Registrable Securities held by such Initiating Holders (constituting in the
aggregate at least 5% of the aggregate Common Stock outstanding immediately upon
consummation of the transaction contemplated by the Stock Exchange Agreement);
such notice shall specify whether the Initiating Holders require the Registrable
Securities to be distributed by means of an underwriting. Following receipt of
any notice under this Section 6.1, the Company shall (x) within ten days notify
all other Holders of such request in writing and (y) thereupon as expeditiously
as possible, use its best efforts to cause to be registered under the Securities
Act all Registrable Securities that the Initiating Holders and such other
Holders have, within ten days after the Company has given such notice, requested
be registered in accordance with the manner of disposition specified in such
notice by the Initiating Holders; provided, that the Company shall not be
obligated to file a registration statement relating to any registration request
under this Section 6.1, (i) if two registration statements relating to
registration requests under this Section 6.1 have previously been filed and
declared effective by the SEC in the calendar year in which such registration
request is made or, (ii) if five registration statements relating to
registration requests under this Section 6.1 have previously been filed and
declared effective by the SEC.
(b) If the Initiating Holders intend to have the Registrable
Securities distributed by means of an underwritten offering, the Company shall
include such information in the written notice referred to in clause (x) of
Section 6.1(a) above. In such event, the right of any Holder to include its
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwritten offering and the inclusion of such
Holder's Registrable Securities in the underwritten offering (unless otherwise
mutually agreed by a majority in interest of the Initiating Holders and such
Holder) to the extent provided below. All Holders proposing to distribute
Registrable Securities through such underwritten offering shall enter (together
with the Company, as provided in Subsection 6.4(j)) into an underwriting
agreement in customary form with the underwriter or underwriters. No Holder
shall be required to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such Holder, the Registrable Securities of such Holder and
such Holder's intended method of distribution and any other representations
required by law
14
or reasonably required by the underwriter. If any Holder of Registrable
Securities disapproves of the terms of the underwriting, such Holder may elect
to withdraw all its Registrable Securities by written notice to the Company, the
managing underwriter and the Initiating Holders. The securities so withdrawn
also shall be withdrawn from registration.
(c) A registration requested pursuant to this section 6.1 shall not be
deemed to have been effected pursuant this Section 6.1 for purposes of Section
6.6 unless (i) it has been declared effective by the SEC, (ii) it has remained
effective for the period set forth in Section 6.4(a), and (iii) the offering of
Registrable Securities pursuant to such registration is not subject to any stop
order, injunction or other order or requirement of the SEC (other than any such
stop order, injunction, or other requirement of the SEC prompted by any act or
omission of Holders of Registrable Securities).
(d) Selection of Underwriters. If a requested registration pursuant to
this Section 6.1 involves an underwritten offering, the Company shall have the
right to select the investment banker or bankers and managers to administer the
offering; provided, however, that such investment banker or bankers and managers
shall be reasonably satisfactory to Holders of a majority of the Registrable
Securities which the Company has been requested to register.
(e) Subject to the following sentence, if a requested registration
pursuant to this Section 6.1 involves an underwritten offering and the managing
underwriter 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 which are not Registrable Securities) exceeds the number that can
be sold in such offering at a price reasonably related to the then current
market value of such securities, the Company will include in such registration
only the Registrable Securities requested to be included in such registration.
In the event that the number of Registrable Securities requested to be included
in such registration exceeds the number which, in the opinion of such managing
underwriter, may be sold at a price reasonably related to the then current
market value of such securities, the number of such Registrable Securities to be
included in such registration shall be allocated pro rata among all requesting
Holders on the basis of the relative number of shares of Registrable Securities
then held by each such Holder (provided that any shares hereby allocated to any
such Holder that exceed such Holder's request shall be reallocated among the
remaining requesting Holders in like manner). In the event that the number of
Registrable Securities requested to be included in such registration is less
than the number which, in the opinion of the managing underwriter, may be sold
at a price reasonably related to the then current market value of such
securities, the Company may include in such registration the securities the
Company proposes to sell up to the number of securities that, in the opinion of
the managing underwriter, may be sold at a price reasonably related to the then
current market value of such securities. The Company will not include in any
requested registration pursuant to this Section 6.1 any securities which are not
Registrable Securities (other than securities of the Company) without the prior
written consent of the Holders of at least a majority of the Registrable
Securities included in such registration.
(f) If the Board of Directors of the Company, in its good faith
judgment, determines that any registration of Registrable Securities should not
be made or continued due to a valid need not to disclose confidential
information or because it would materially interfere with any material
15
financing, acquisition, corporate reorganization or merger or other transaction
involving the Company (collectively, a "Valid Business Reason"), the Company may
postpone filing a registration statement relating to a request for registration
under this Section 6.1 for a period of up to 90 days from the date of the Delay
Notice (as defined herein). If any such registration statement has been filed,
the Company may, with respect to a registration effected pursuant to this
Section 6.1 or Section 6.3, postpone amending or supplementing such registration
statement for a period of up to 90 days from the date of the Delay Notice. If
the Company decides to postpone filing a registration statement or an amendment
or supplement thereto, then the Company shall give prompt written notice (a
"Delay Notice") to any holder of Registrable Securities included or to be
included in any such registration statement of its determination to postpone a
registration statement. To be valid, a Delay Notice shall include in reasonable
detail the nature of the Valid Business Reasons occasioning such postponement.
In addition, if prior to the end of the 90-day delay period the Valid Business
Reason should cease to exist, then the Company shall give prompt written notice
to those parties to whom a Delay Notice was delivered stating that the Valid
Business Reason for such postponement no longer exists. Notwithstanding the
foregoing, and without regard to whether the Valid Business Reason continues or
not, at the end of the 90-day period from the delivery of a Delay Notice, the
Company shall cause such registration statement, amendment or supplement, to be
filed with the SEC. Notwithstanding the foregoing the Company shall be entitled
to serve only one Delay Notice within any 12 month period.
SECTION 6.2. Incidental Registration. Subject to Section 6.7, if at
any time after the first anniversary of the Closing Date the Company proposes to
file a registration statement under the Securities Act (other than a
registration statement on a Form S-4 or S-8 or any successor or similar forms)
on any form that would permit the registration of the Registrable Securities,
whether or not such filing is to be on its behalf, each such time the Company
shall give to each Holder prompt written notice of such determination setting
forth the date on which the Company proposes to file such registration
statement, which date shall be no earlier than twenty-one days from the date of
such notice, and advising each Holder of its right under this Section 6.2 to
have Registrable Securities included in such registration. Upon the written
request of any Holder received by the Company no later than thirty days after
the date of the Company's notice (which request shall specify the Registrable
Securities intended to be included in such registration by such Holder), the
Company shall use its best efforts to cause to be registered under the
Securities Act all of the Registrable Securities that each such Holder has so
requested to be registered; provided that 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 Securities and, thereupon, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of any Holder to request
such registration to be effected as a registration under Section 6.1. If a
proposed registration pursuant to this Section 6.2 involves an underwritten
public offering, any Holders making a request under this Section 6.2 in
connection with such registration may elect in writing, prior to the effective
date of the registration statement filed
16
in connection with such registration, to withdraw such request and not to have
such securities registered in connection with such registration. If, in the
written opinion of the managing underwriter (or, in the case of a
non-underwritten offering, in the written opinion of the Company), the total
amount of such securities to be so registered, including such Registrable
Securities, will exceed the maximum amount of the Company's securities that can
be marketed at a price reasonably related to the then current market value of
such securities, then the Company shall include in such registration (i) first,
all the securities the Company proposes to sell for its own account or is
required to register on behalf of any third party exercising rights similar to
those granted in Section 6.1(a) and without having the adverse effect referred
to above, and (ii) second, to the extent that the number of securities which the
Company proposes to sell for its own account pursuant to this Section 6.2, or is
required to register on behalf of any third party exercising rights similar to
those granted in Section 6.1(a), is less than the number of equity securities
which the Company has been advised can be sold in such offering without having
the adverse effect referred to above, all Registrable Securities requested to be
included in such registration by the Holders pursuant to this Section 6.2 and
all shares of Common Stock requested to be included by third parties exercising
the rights similar to those granted in this Section 6.2; provided that if the
number of Registrable Securities and other shares of Common Stock requested to
be included in such registration by the Holders pursuant to this Section 6.2 and
third parties exercising rights similar to those granted in this Section 6.2,
together with the number of securities to be included in such registration
pursuant to clause (i) of this Section 6.2, exceeds the number which the Company
has been advised can be sold in such offering without having the adverse effect
referred to above, the number of such Registerable Securities requested to be
included in such registration by the Holders pursuant to this Section 6.2 shall
be limited to such extent and shall be allocated pro rata among all such
requesting Holders and third parties exercising rights similar to those granted
in this Section 6.2 on the basis of the relative number of Registrable
Securities each such Holder has requested to be included in such registration
and the number of shares of Common Stock requested to be included in such
registration by such third parties.
SECTION 6.3. Registration on Form S-3. If at any time after the first
anniversary of the Closing Date (a) any Holder requests in writing that the
Company file a registration statement on Form S-3 or any successor thereto for a
public offering of all or any portion of the Registrable Securities held by such
requesting Holder and (b) the Company is a registrant entitled to use Form S-3
or any successor thereto, then the Company shall use its best efforts to
register under the Securities Act on Form S-3 or any successor thereto, for
public sale in accordance with the method of disposition specified in such
request, including, without limitation, pursuant to Rule 415 under the
Securities Act, the Registrable Securities specified in such request. Whenever
the Company is required by this Section 6.3 to use its best efforts to effect
the registration of Registrable Securities, each of the limitations, procedures
and requirements of Section 6.1(b), (e) and (f) (including but not limited to
the requirement that the Company notify all Holders from whom a request has not
been received and provide them with the opportunity to participate in the
offering) shall apply to such registration. Notwithstanding the foregoing, the
Company shall not be obligated to effect any such registration, qualification or
compliance pursuant to this Section 6.3: (i) if the Holders, together with the
holders of any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other
17
securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $10,000,000; (ii) if the
Company has, within the twelve-month period preceding the date of such request,
already effected two registration on Form S-3 on behalf of the Holders; (iii) in
any jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting such
registration qualification or compliance;
SECTION 6.4. Obligations of the Company. Whenever required under
Section 6.1 or Section 6.3 to use its best efforts to effect the registration of
any Registrable Securities, the Company shall, as expeditiously as possible:
(a) prepare and, in any event with 45 days after, (i) the end of the
period specified in section 6.2 or, (ii) receipt by the Company of a
request under Section 6.1 or 6.3, as the case may be, file with the SEC a
registration statement with respect to such Registrable Securities on any
form for which the Company then qualifies or which counsel for the Company
shall deem appropriate, and which form shall be available for the sale of
the Registrable Securities in accordance with the intended methods of
distribution thereof, and use its best efforts to cause such registration
statement to become and remain effective for the period of the distribution
contemplated thereby determined as provided in subsection 6.4(b) below;
provided, however, that the Company may discontinue any registration of its
securities which is being effected pursuant to Section 6.2 at any time
prior to the effective date of the registration statement relating thereto;
(b) 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 of 180 days or such lesser period of time as the Company or any
Holder may be required under the Securities Act to deliver a prospectus in
connection with any sale of Registrable Securities, and to comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such registration statement, and furnish
to each Holder of such Registrable Securities and one counsel acting on
behalf of the Holders, such number of copies of any such amendments and
supplements in conformity with the requirements of the Securities Act prior
to their being used or filed with the SEC, which documents will be subject
to the review of such counsel;
(c) furnish to each Holder and the managing underwriter, if any, such
number of copies of the registration statement and the prospectus included
therein (including each preliminary prospectus and any amendments or
supplements thereto) in conformity with the requirements of the Securities
Act and such other documents and information as they may reasonably request
and make available for inspection by the parties referred to in Section
6.4(d) below such financial and other information and books and records of
the Company, and cause the officers, directors, employees, counsel and
independent certified public accountants of the Company to respond to such
inquiries, as shall be reasonably necessary, in the judgment of the
respective counsel referred to in such Section, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act;
18
(d) provide (i) the Holders of the Registrable Securities to be
included in such registration statement, (ii) the underwriters (which term,
for purposes of this Agreement, shall include a person deemed to be an
underwriter within the meaning of Section 2(11) of the Securities Act), if
any, thereof, (iii) the sales or placement agent, if any, therefor, (iv)
counsel for such underwriters or agent, and (v) not more than one counsel
for all the Holders of such Registrable Securities the opportunity to
participate in the preparation of such registration statement, each
prospectus included therein or filed with the SEC, and each amendment or
supplement thereto;
(e) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as each Holder shall
reasonably request to keep such registration or qualification in effect for
so long as such registration statement remains in effect, and do any and
all other acts and things which may be reasonably necessary or advisable to
enable such Holder to consummate the disposition in such jurisdictions of
the Registrable Securities owned by such Holder; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business in or to file a general consent to
service of process in any jurisdiction wherein it would not, but for the
requirements of this paragraph (e), be obligated to do so; and provided
further that the Company shall not be required to qualify such Registrable
Securities in any jurisdiction in which the securities regulatory authority
requires that any Holder submit its Registrable Securities to the terms,
provisions and restrictions of any escrow, lockup or similar agreement(s)
for consent to sell Registrable Securities in such jurisdiction unless such
Holder agrees to do so;
(f) promptly notify counsel for each of the selling Holders of
Registrable Securities, the sales or placement agent, if any, therefor and
the managing underwriter or underwriters, if any, thereof and confirm such
advice in writing, (i) when such registration statement or the prospectus
included therein or any prospectus amendment or supplement or
post-effective amendment has been filed, and, with respect to such
registration statement or any post-effective amendment, when the same has
become effective, (ii) of any comments by the SEC or by any Blue Sky or
securities commissioner or regulator of any state with respect thereto or
any request by the SEC for amendments or supplements to such registration
statement or prospectus or for additional information, (iii) of the
issuance by the SEC of any stop order suspending the effectiveness of such
registration statement or the initiation or threatening of any proceedings
for that purpose, (iv) if at any time the representations and warranties of
the Company contained in any underwriting agreement or other customary
agreement cease to be true and correct in all material respects or (v) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purpose;
(g) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of such registration statement or any
post-effective amendment thereto, or the lifting of any suspension of the
qualification of any of the registered Common Stock for sale in any
jurisdiction at the earliest possible date;
19
(h) promptly notify each Holder for whom such Registrable Securities
are covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of
the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make, in light of the circumstances
under which they were made, the statements therein not misleading, and at
the request of any such Holder promptly prepare and furnish to such Holder
a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make, in light of the circumstances under
which they were made, the statements therein not misleading;
(i) furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to Section 6.1 or Section 6.3, if the
method of distribution is by means of an underwriting, on the date that the
Registrable Securities are delivered to the underwriters for sale pursuant
to such registration, or if such Registrable Securities are not being sold
through underwriters, on the date that the registration statement with
respect to such Registrable Securities becomes effective, (1) a signed
opinion, dated such date, of the independent legal counsel representing the
Company for the purpose of such registration, addressed to the
underwriters, if any, and if such Registrable Securities are not being sold
through underwriters, then to the Holders making such request, as to such
matters as such underwriters or the Holders holding a majority of the
Registrable Securities included in such registration, as the case may be,
may reasonably request and as would be customary in such a transaction; and
(2) letters dated such date and the date the offering is priced from the
independent certified public accountants of the Company, addressed to the
underwriters, if any, and if such Registrable Securities are not being sold
through underwriters, then to the Holders making such request and, if such
accountants refuse to deliver such letters to such Holders, then to the
Company (i) stating that they are independent certified public accountants
within the meaning of the Securities Act and that, in the opinion of such
accountants, the financial statements and other financial data of the
Company included in the registration statement or the prospectus, or any
amendment or supplement thereto, comply as to form in all material respects
with the applicable accounting requirements of the Securities Act and (ii)
covering such other financial matters (including information as to the
period ending not more than five business days prior to the date of such
letters) with respect to the registration in respect of which such letter
is being given as such underwriters or the Holders holding a majority of
the Registrable Securities included in such registration, as the case may
be, may reasonably request and as would be customary in such a transaction;
(j) enter into customary agreements (including if the method of
distribution is by means of an underwriting, an underwriting agreement in
customary form, including, without limitation, customary indemnification
provisions consistent with Section 6.11) and take such other actions as are
reasonably required in order to expedite or
20
facilitate the disposition of the Registrable Securities to be so
included in the registration statement;
(k) use its best efforts to obtain the consent or approval of each
governmental agency or authority, whether federal, state or local, which
may be required to effect registration or the offering or sale in
connection therewith or to enable the selling Holder or Holders to offer,
or to consummate the disposition of, their Registrable Securities;
(l) cooperate with the Holders of the Registrable Securities and the
managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold,
which certificates shall be printed, lithographed or engraved, or produced
by any combination of such methods, steel engraved borders, if required,
and which shall not bear any restrictive legends; and, in the case of an
underwritten offering, enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters may
request at least two business days prior to any sale of the Registrable
Securities;
(m) otherwise comply with all applicable rules and regulations of the
SEC, and make available to its security holders, as soon as reasonably
practicable (but not later than eighteen months) after the effective date
of the registration statement, an earnings statement covering the period of
at least twelve months beginning with the first full month after the
effective date of such registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act;
(n) use its best efforts to cause all such Registrable Securities to
be listed on any securities exchange on which the Common Stock is then
listed, if such Registrable Securities are not already so listed and if
such listing is then permitted under the rules of such exchange, and to
provide a transfer agent and registrar for such Registrable Securities
covered by such registration statement no later than the effective date of
such registration statement;
(o) make available for inspection by one counsel on behalf of all the
Holders of the Registrable Securities 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 pertinent financial and other records, 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 counsel, underwriter, attorney, accountant or agent in connection
with such registration statement; and
(p) use its best efforts to make available the executive officers of
the Company to participate with the Holders of Registrable Securities and
any underwriters in any "road shows" or other selling efforts that may be
reasonably requested by the Holders in connection with the methods of
distribution for the Registrable Securities.
For purposes of Sections 6.4(a) and 6.4(b), and with respect to (i) registration
required pursuant to Section 6.1, (A) the period of distribution
21
of Registrable Securities in a firm commitment underwritten public offering
shall be deemed to extend until each underwriter has completed the distribution
of all securities purchased by it and (B) the period of distribution of
Registrable Securities in any other registration shall be deemed to extend until
the earlier of the sale of all Registrable Securities covered thereby and 180
days after the effective date thereof and (ii) registrations required pursuant
to Section 6.3, the period of distribution of Registrable Securities in any
registration (firm commitment underwritten or otherwise) shall be deemed to
extend until the earlier of the sale of all Registrable Securities covered
thereby and two years after the effective date thereof.
Each Holder of Registrable Securities agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 6.4(h), such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 6.4(h), and, if so
directed by the Company, such Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice; provided, however, that any
period of time during which a Holder must discontinue disposition of Registrable
Securities shall not be included in the determination of a period of
distribution for purposes of Sections 6.4(a) and 6.4(b).
SECTION 6.5. Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Agreement
that the Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them, and the intended method of
disposition of such securities as the Company may from time to time reasonably
request in writing and as shall be required in connection with the action to be
taken by the Company.
SECTION 6.6. Expenses of Registration. All Registration Expenses in
connection with (i) each registration or attempted registration pursuant to
Section 6.2, (ii) the first five registrations effected pursuant to Section 6.1
or 6.3 and (iii) any attempted registration (or partial registration deemed not
to have been effected pursuant to Section 6.1 or 6.3 by operation of Sections
6.1(c) or (e)) occurring prior to the fifth registration effected pursuant to
Section 6.1 or 6.3 of this Agreement, excluding underwriters' discounts and
commissions, shall be paid by the Company; provided, however, that the Company
shall not be required to pay for any Registration Expenses of any registration
proceeding begun pursuant to Section 6.1 or 6.3 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the
Registrable Securities to be registered (in which case all participating Holders
shall bear such expenses), unless the Holders of a majority of the Registrable
Securities agree to forfeit their right to one demand registration pursuant to
Section 6.1; provided further, however, that if at the time of such withdrawal,
the Holders have learned of a material adverse change in the condition, business
or prospects of the Company not actually known by the Holders at the time of
their request for registration, then the Holders shall not be required to pay
any of such expenses and shall retain in full their rights pursuant to Sections
6.1 and 6.3. The foregoing provisions with respect to expenses shall in no way
limit the rights of the Holders to request registration
22
pursuant to Sections 6.1 and 6.3 or the number of registrations which may be
requested thereunder.
SECTION 6.7. Underwriting Requirements. In connection with any
underwritten offering, the Company shall not be required under Section 6.2 to
include Registrable Securities in such underwritten offering unless the Holders
of such Registrable Securities accept the terms of the underwriting of such
offering that have been reasonably agreed upon between the Company and the
underwriters selected by the Company; provided, that the Company shall not agree
to lock-up periods in excess of 120 days in connection with any such offerings.
SECTION 6.8. Rule 144 and Rule 144A Information. With a view to making
available the benefits of certain rules and regulations of the SEC which may at
any time permit the sale of the Registrable Securities to the public without
registration, at all times, the Company agrees to:
(i) make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities
Act;
(ii) use its best efforts to file with the SEC in a timely manner
all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(iii) furnish to each Holder of Registrable Securities forthwith
upon request a written statement by the Company as to its compliance
with the reporting requirements of such Rule 144 and of the Securities
Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents
so filed by the Company as such Holder may reasonably request in
availing itself of any rule or regulation of the SEC allowing such
Holder to sell any Registrable Securities without registration.
SECTION 6.9. Delay of Registration. No Holder, other than Rakepoll,
shall have any right to obtain or seek an injunction restraining or otherwise
delaying any such registration as the result of any controversy that might arise
with respect to the interpretation or implementation of this Article VI.
SECTION 6.10. Indemnification. In the event any Registrable
Securities are included in a registration statement under this Agreement:
(a) The Company shall indemnify and hold harmless each Holder, such
Holder's directors and officers, and each person, if any, who controls such
Holder or participating person within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection
with defending or investigating any such action or claim) to which they may
become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or proceedings in respect thereof)
arise out of or are based on any untrue or alleged untrue statement of a
material fact contained in such registration statement, preliminary
prospectus, final prospectus or amendments or supplements thereto or arise
out of or are
23
based upon 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; provided, however, that the indemnity agreement
contained in this Section 6.10(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld); provided further that the Company
shall not be liable to any Holder, such Holder's directors and officers or
controlling person in any such case for any such loss, claim, damage,
liability or action to the extent that it 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, final prospectus or amendments or supplements thereto, in
reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such Holder,
such Holder's directors and officers or controlling person; provided,
further, that as to any preliminary prospectus or any final prospectus this
indemnity agreement shall not inure to the benefit of any Holder, such
Holder's directors and officers or controlling persons on account of any
losses, claims, damages or liability arising from the sale of Common Stock
to any person by such Holder if such Holder or its representatives failed
to send or give a copy of the final prospectus or a prospectus supplement,
as the case may be (excluding documents incorporated by reference therein),
as the same may be amended or supplemented, to that person within the time
required by the Securities Act, and the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact in such preliminary prospectus or final prospectus was
corrected in the final prospectus or such prospectus supplement, as the
case may be (excluding documents incorporated by reference therein), unless
such failure resulted from non-compliance by the Company with Section
6.4(c). Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of any such Holder, such Holder's
directors and officers, participating person or controlling person, and
shall survive the transfer of such securities by such Holder.
(b) Each Holder requesting or joining in a registration severally and
not jointly shall indemnify and hold harmless the Company, each of its
directors and officers and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act to the same extent as the foregoing indemnity from the
Company to the Holders but only with reference to written information
relating to such Holder furnished to the Company expressly for use in
connection with such registration; provided, however, that the indemnity
agreement contained in this Section 6.10(b) shall not apply to amounts paid
in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such Holder (which consent
shall not be unreasonably withheld); and provided further that the
liability of each Holder hereunder shall be limited to the proportion of
any such loss, claim, damage, liability or expense that is equal to the
proportion that the net proceeds from the sale of the shares sold by such
Holder under such registration statement bears to the total net proceeds
from the sale of all securities sold thereunder, but not in any event to
exceed the net proceeds received by such Holder from the sale of
Registrable Securities covered by such registration statement.
24
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to either of the two preceding paragraphs, such person
(the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing 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 notified, to assume the defense thereof with
counsel mutually satisfactory to the parties. The indemnifying party shall
pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection with
any proceeding or related proceedings in the same jurisdiction, be liable
for the fees and expenses of more than one separate firm (in addition to
any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Holders, in the case of parties indemnified
pursuant to the second preceding paragraph, and by the Company, in the case
of parties indemnified pursuant to the first preceding paragraph. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or
if there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel as contemplated by the second and third sentences
of this paragraph, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than thirty days after receipt
by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such proceeding. The failure to deliver written notice to the
indemnifying party promptly following of the commencement of any such
action shall not relieve the indemnifying party of its obligations under
this Section 6.10, except to the extent that the failure so to deliver the
notice is prejudicial to the indemnifying party's ability to defend such
action.
25
(d) If the indemnification provided for in Section 6.10(a) and/or (b)
is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified party in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of
the losses, claims, damages or liabilities referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred
by such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.10(d) were determined by pro rata
allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 6.10, no Holder
shall be required to contribute any amount in excess of the amount of net
proceeds received by such Holder from the sale of Registrable Securities
covered by such registration statement. 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. The remedies provided for in this
Section 6.10 are not exclusive and shall not limit any right or remedies
that may otherwise be available to any indemnified party at law or in
equity.
SECTION 6.11. Lock-up in connection with a Registration of Securities.
Each Holder shall, in connection with any registration of the Company's
securities, upon the request of the Company or the underwriters managing any
underwritten offering of such securities, agree in writing not to effect any
sale, disposition or distribution of any Registrable Securities (other than that
included in the registration) without the prior written consent of the managing
underwriter for such reasonable and customary period of time (not to exceed 120
days) from the effective date of such registration as the Company or the
underwriters may specify; provided, however, that all executive officers and
directors of the Company (other than executive officers and directors owning an
aggregate of less than 1% of the outstanding Common Stock as of the effective
date of such registration statement) shall also have agreed not to effect any
sale, disposition or distribution of any Registrable Securities under the
circumstances and pursuant to the terms set forth in this Section 6.11.
In order to enforce the foregoing covenant in this Section 6.11, the
Company may impose stop-transfer instructions with respect to the Registrable
Securities of each Holder (and the shares or securities of every
26
other person subject to the foregoing restriction), which stop-transfer
instructions shall only be effective until the end of such reasonable and
customary period.
SECTION 6.12. Transfer of Registration Rights. The registration rights
of any Holder under this Agreement with respect to the Registrable Securities
may be transferred to any transferee of such Registrable Securities who acquires
any Registrable Securities of any Holder; provided that such registration rights
may not be transferred to a holder of less than 2.5% of the outstanding Common
Stock unless such transferee is a Rakepoll Affiliate (or a partner of a Rakepoll
Affiliate); provided, further, that (i) the transferring Holder shall give the
Company written notice at or prior to the time of such transfer stating the name
and address of the transferee and identifying the securities with respect to
which the rights under this Agreement are being transferred, (ii) such
transferee shall agree in writing, in form and substance reasonably satisfactory
to the Company, to be bound as a Holder by the provisions of this Article VI,
and (iii) immediately following such transfer the further disposition of such
securities by such transferee is restricted under the Securities Act.
SECTION 6.13. Selection of Counsel. In connection with any
registration of Registrable Securities pursuant to Sections 6.1, 6.2 and 6.3
hereof, the Holders of a majority of the Registrable Securities covered by any
such registration may select one counsel to represent all Holders of Registrable
Securities covered by such registration; provided, however, that in the event
that the counsel selected as provided above is also acting as counsel to the
Company in connection with such registration, the remaining Holders shall be
entitled to select one additional counsel to represent all such remaining
Holders.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations of the Company. As of the date hereof and
as of the Closing Date the Company represents and warrants as follows:
(a) Authority Relative to This Agreement. The Company has all
necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby (the "Transactions"). The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
Transactions have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
Transactions. This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery by Rakepoll, constitutes legal, valid and binding obligations of
the Company.
(b) No Conflict. The execution and delivery by the Company of this
Agreement do not, and the performance of this Agreement by the Company will
not, (i) conflict with or violate the Certificate of Incorporation or
By-Laws of the Company or any of its Subsidiaries, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to
the Company or any of its Subsidiaries or by which
27
any property or asset of the Company or any of its Subsidiaries is bound or
affected, or (iii) result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default)
under, or give to others any right of termination, amendment, acceleration
or cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of the Company or any of its
Subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or any property or asset of
the Company or any of its Subsidiaries is bound or affected, except for any
such breaches, defaults or other occurrences which would not, individually
or in the aggregate, have a material adverse effect on the results of
operations, financial condition or business of the Company and its
Subsidiaries, taken as a whole.
(c) Required Filings and Consents. The execution and delivery by the
Company of this Agreement do not, and the performance of this Agreement by
the Company will not, require any consent, approval, authorization or
permit of, or filing by the Company with or notification to, any
governmental or regulatory authority, domestic or foreign, except (i) for
applicable requirements, if any, of the Securities Act, the Exchange Act,
state blue sky and takeover laws, (ii) the HSR Act, (iii) Exon-Xxxxxx, and
(iv) where failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or
delay the Company from performing its obligations under this Agreement and
would not, individually or in the aggregate, have a material adverse effect
on the results of operations, financial condition or business of the
Company and its Subsidiaries, taken as a whole.
SECTION 7.2. Representations of Rakepoll. As of the date hereof
and as of the Closing Date Rakepoll represents and warrants as follows:
(a) Authority Relative to This Agreement. Rakepoll has all necessary
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the Transactions. The execution and
delivery of this Agreement by Rakepoll and the consummation by Rakepoll of
the Transactions have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of Rakepoll
are necessary to authorize this Agreement or to consummate the
Transactions. This Agreement has been duly and validly executed and
delivered by Rakepoll and, assuming the due authorization, execution and
delivery by the Company constitutes legal, valid and binding obligations of
Rakepoll.
(b) No Conflict. The execution and delivery by Rakepoll of this
Agreement do not, and the performance of this Agreement by Rakepoll will
not, (i) conflict with or violate the Certificate of Incorporation or
By-Laws of Rakepoll or any of its Subsidiaries, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to
Rakepoll or any of its Subsidiaries or by which any property or asset of
Rakepoll or any of its Subsidiaries is bound or affected, or (iii) result
in any breach of or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
right of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or other
28
encumbrance on any property or asset of Rakepoll or any of its Subsidiaries
pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to
which Rakepoll or any of its Subsidiaries is a party or by which Rakepoll
or any of its Subsidiaries or any property or asset of Rakepoll or any of
its Subsidiaries is bound or affected, except for any such breaches,
defaults or other occurrences which would not, individually or in the
aggregate, have a material adverse effect on the results of operations,
financial condition or business of Rakepoll, taken as a whole.
(c) Required Filings and Consents. The execution and delivery by
Rakepoll of this Agreement do not, and the performance of this Agreement by
Rakepoll will not, require any consent, approval, authorization or permit
of, or filing by Rakepoll with or notification to, any governmental or
regulatory authority, domestic or foreign, except for (i) applicable
requirements, if any, of the Securities Act, the Exchange Act, state blue
sky and takeover laws, (ii) the HSR Act, (iii) Exon- Xxxxxx, and (iv) where
failure to obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications, would not prevent or delay Rakepoll
from performing its obligations under this Agreement and would not,
individually or in the aggregate, have a material adverse effect on the
results of operations, financial condition or business of Rakepoll, taken
as a whole.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, by mail
(registered or certified mail, postage prepaid, return receipt requested) or by
any courier service, such as Federal Express, providing proof of delivery. All
communications hereunder shall be delivered to the respective parties at the
following addresses, or to such other address as any party hereto may hereafter
notify to the other parties hereto:
if to Rakepoll, to:
Xxxxxxxx Xxxxxxx X.X.
00 XX Xxxxxxxxxx
Xxxxxxx, Xxxxxxxxxxx Antilles
Attention: Xxxxx Xxxxx
with a copy to:
Xxxxx Xxxxx
Xxx Xxx Xxxxxxxxx, 0
Xx 0000 Xxxxxx
Xxxxxxxxxxx
29
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
21st Floor
99 Xxxxxxxxxxx
Xxxxxx, XX0X 0XX
Attention: Xxxx X. Xxxxx
if to the Company, to:
Gensia, Inc.
0000 Xxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention:
with a copy to:
Pillsbury Madison & Sutro LLP
000 Xxxxxxxxxx Xxxxxx,
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
If to a Transferee of Registrable Securities:
At the address set forth in the notice required to be delivered
pursuant to Section 6.11 hereof.
SECTION 8.2. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by Rakepoll and the Company,
or in the case of a waiver, by the party against whom the waiver is to be
effective; provided that following the Closing Date no such amendment or waiver
by the Company shall be effective without the approval of a majority of the
Independent Directors.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 8.3. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Transactions is not affected in any manner adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
Transactions be consummated as originally contemplated to the fullest extent
possible.
30
SECTION 8.4. Entire Agreement; Assignment. This Agreement and the
Stock Exchange Agreement and the agreements contemplated hereby and thereby
constitute the entire agreement among the parties with respect to the subject
matter hereof and thereof and supersede, except as set forth in the Stock
Exchange Agreement, all prior agreements and undertakings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof. This Agreement shall not be assigned by operation of law or otherwise,
except that Rakepoll, other than with respect to Article IV hereof, may assign
all or any of its rights and obligations hereunder to any of its Affiliates in
connection with a transfer of Common Stock; provided that (a) no such assignment
shall relieve Rakepoll of its obligations hereunder and (b) Rakepoll may assign
its rights to the extent and as provided in Section 6.12.
SECTION 8.5. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
SECTION 8.6. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
SECTION 8.7. Governing Law; Consent to Jurisdiction. (a) This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York applicable to contracts executed in and to be performed in
the State of New York. All actions and proceedings arising out of or relating to
this Agreement shall be heard and determined in any New York state or federal
court thereof.
(b) The parties hereto unconditionally and irrevocably agree and
consent to the exclusive jurisdiction of, and service of process and value in,
the United States District Court for the Southern District of New York and the
courts of the State of New York located in the City of New York, and waive any
objection with respect thereto, for the purpose of any action, suit or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby and further agree not to commence any such action, suit or
proceeding except in any such court. Each party irrevocably waives any
objections or immunities to jurisdiction to which it may otherwise be entitled
or become entitled (including immunity to pre-judgment attachment, post-judgment
attachment and execution) in any legal suit, action or proceeding against it
arising out of or relating to this Agreement or the transactions contemplated
hereby which is instituted in any such court. Rakepoll hereby appoints CT
Corporation System, located at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its
authorized agent (the "Rakepoll Authorized Agent") upon whom process may be
served in any such action arising out of or relating to this agreement or the
transactions contemplated hereby which may be instituted in the United States
District Court for the Southern District of New York or the courts of the State
of New York located in the City of New York by any other party hereto. Such
appointment shall be irrevocable. Rakepoll agrees to take any and all action,
that may be necessary to continue such appointment in full force and effect as
aforesaid. Service of process upon the Authorized Agent and written notice of
such service to Olive shall be deemed, in every respect, effective service of
process upon Xxxxxxxx.
00
SECTION 8.8. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.
SECTION 8.9. Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 8.10. Effectiveness; Termination. This Agreement shall become
effective as of the Closing Date and shall terminate at such time as Rakepoll
and its Affiliates no longer own any such shares. Article IV hereof shall
terminate and have no further effect at such time as Rakepoll ceases to be
entitled to designate any Investor Directors in accordance with Section 4.1.
SECTION 8.11. Waiver of Jury Trial. Rakepoll and the Company each
hereby irrevocably waive all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to this Agreement or the actions of Rakepoll or the Company in the
negotiation, administration, performance and enforcement thereof.
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
GENSIA, INC.
By: /s/ Xxxxx X. Xxxx
-----------------------------
Name: Xxxxx X. Xxxx
Title: Chairman of the Board
RAKEPOLL FINANCE N.V.
By: /s/ Xxxxx Xxxxx
-----------------------------
Name: Xxxxx Xxxxx
Title: Chairman of the Board
33
AMENDMENT NO. 1 TO SHAREHOLDER'S AGREEMENT
------------------------------------------
AMENDMENT NO. 1 (the "Amendment"), dated as of December 20, 1996, to
the Shareholder's Agreement, dated as of November 12, 1996 (the "Agreement"),
between Gensia, Inc., a corporation organized under the laws of Delaware (the
"Company"), and Rakepoll Finance N.V., a corporation organized under the laws of
the Netherlands Antilles ("Rakepoll Finance").
W I T N E S S E T H :
WHEREAS, the Company and Rakepoll Finance are parties to the
Agreement; and
WHEREAS, the Company and Rakepoll Finance wish to revise the
definition of "competitor" set forth in Section 4.1 of the Agreement; and
WHEREAS, Section 8.2(a) of the Agreement provides that the Agreement
may be amended in a writing signed by the Company and Rakepoll Finance;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions; References. Capitalized terms used in this
Amendment but not defined herein shall have the meanings ascribed to them in
the Agreement.
2. Amendment of Section 4.1. Section 4.1 of the Agreement is hereby
amended by deleting in its entirety the last paragraph of Section 4.1 and
substituting in lieu thereof the following:
"For purposes hereof, an entity shall be deemed to be a "competitor"
of the Company if such entity (i) is engaged in the production of
active ingredients or finished dosage forms either in the oncological
field or for parenteral use, not currently produced by the Company or
any subsidiary of Rakepoll Holding B.V., or (ii) actually manufactures
any product which is substantially similar in use or purpose to any
product manufactured by the Company, in development by the Company, or
in the funding plan agreed to by the parties hereto (the ("Funding
Plan") for development by the Company or (iii) is engaged in a
business such that the reasonable inference is that such entity is
engaged in substantially the same business as the Company. For
purposes of this paragraph, the term "Company" shall refer to the
Company as constituted in accordance with the Stock Exchange Agreement
and this Agreement."
3. Full Force and Effect. Except as modified, amended or
supplemented above, all rights, terms and conditions of the Agreement shall
remain in full force and effect.
34
4. Governing Law. This Amendment shall be governed by and
construed under the laws of the State of New York (irrespective of its choice
of law principles).
5. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment to the
Agreement as of the date first written above.
GENSIA, INC.
By: /s/ Xxxxx X. Xxxx
-------------------------
Name: Xxxxx X. Xxxx
Title: Chairman of the Board
RAKEPOLL FINANCE N.V.
By: /s/ Xxxxx Xxxxx
-------------------------
Name: Xxxxx Xxxxx
Title: Chairman of the Board
35
AMENDMENT NO. 2 TO SHAREHOLDER'S AGREEMENT
------------------------------------------
AMENDMENT NO. 2 (the "Amendment"), dated as of February 28, 1997, to
the Shareholder's Agreement, dated as of November 12, 1996, as amended by
Amendment No. 1 dated as of December 16, 1996 (the "Agreement"), between Gensia,
Inc., a corporation organized under the laws of Delaware (the "Company"), and
Rakepoll Finance N.V., a corporation organized under the laws
of the Netherlands Antilles ("Rakepoll Finance").
W I T N E S S E T H :
WHEREAS, the Company and Rakepoll Finance are parties to the
Agreement; and
WHEREAS, the Company and Rakepoll Finance wish to amend Exhibits A
and D to the Agreement; and
WHEREAS, Section 8.2(a) of the Agreement provides that the Agreement
may be amended in a writing signed by the Company and Rakepoll Finance;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions; References. Capitalized terms used in this
Amendment but not defined herein shall have the meanings ascribed to them in
the Agreement.
2. Amendment of Exhibit A. Part 1 of Exhibit A to the Agreement
is hereby amended by:
(a) deleting from Part 2 thereof (Initial Investor Directors) the name
Xxxxx Xxxxxx, and
(b) by adding to the end of Part 3 thereof (Initial Independent Directors)
the name "Xxxxxx Panoz".
3. Amendment of Exhibit D.
(a) Part 1 of Exhibit D to the Agreement is hereby amended by adding to the
end of Part 1.A thereof (Sicor S.p.A., Directors) the following name "Xxxxx
Xxxxx".
(b) Exhibit D is further hereby amended by adding to the end of Part 1
thereof a new Part 4.A which shall read in its entirety as follows:
"4. Rakepoll Holding B.V.
A. Directors:
Xxxxx Xxxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxx"
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4. Amendment of Section 4.1. Section 4.1 of the Agreement is hereby
amended by deleting in its entirety the second sentence of paragraph (b) thereof
and substituting in lieu thereof the following sentence:
"Notwithstanding anything to the contrary contained herein, at the
Closing Date, the names of the members of the Board of Directors shall
be as set forth in Part 1 of Exhibit A hereto; provided, however, that
to preserve the provisions of this Agreement, Rakepoll shall continue
to have the right to designate for nomination and approval three
Investor Directors as provided for in this Section 4.1; provided,
further, that the Company shall cause (i) at any time after the
Closing Date, upon the request of Xxxxx Xxxxx, the Board of Directors
to take all action necessary to promptly appoint to the Board of
Directors an Investor Director nominated by Rakepoll, and (ii) a
current Independent Director (other than Xxxxxx Panoz) to resign from
the Board of Directors by a date no later than March 10, 1997.
5. Full Force and Effect. Except as modified, amended or
supplemented above, all rights, terms and conditions of the Agreement shall
remain in full force and effect.
6. Governing Law. This Amendment shall be governed by and
construed under the laws of the State of New York (irrespective of its choice
of law principles).
7. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Amendment to the
Agreement as of the date first written above.
GENSIA, INC.
By: /s/ Xxxxx X. Xxxx
------------------------------------------
Name: Xxxxx X. Xxxx
Title: Chairman of the Board
RAKEPOLL FINANCE N.V.
By: /s/ Xxxxx Xxxxx
------------------------------------------
Name: Xxxxx Xxxxx
Title: Chairman of the Board
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