1
EXHIBIT 4.5
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the 13 day of February,
1997, by and between Alkermes, Inc. a Pennsylvania corporation ("Alkermes"), and
ALZA Corporation, a Delaware corporation ("ALZA").
WHEREAS, ALZA desires to purchase from Alkermes, and Alkermes desires
to sell to ALZA, certain shares of Alkermes' Common Stock, on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the covenants and obligations
expressed herein, and intending to be legally bound, the parties agree as
follows:
1. PURCHASE AND SALE OF STOCK
--------------------------
1.1 SALE AND ISSUANCE OF COMMON STOCK. Subject to the terms and
conditions of this Agreement, ALZA agrees to purchase and Alkermes agrees to
sell and issue to ALZA two million (2,000,000) shares (the "Shares") of
Alkermes' Common Stock, $.01 par value (the "Common Stock"), for a price per
Share of $25 and an aggregate purchase price of $50,000,000 (the "Purchase
Price").
1.2 CLOSING. The Closing for the purchase and sale of the Shares (the
"Closing") shall take place at the offices of ALZA, 950 Page Mill Road, X.X. Xxx
00000, Xxxx Xxxx, Xxxxxxxxxx 00000-0000, California time, on the third business
day after the date on which the conditions set forth in Articles 4 and 5 shall
be satisfied or duly waived, or if Alkermes and ALZA mutually agree on a
different date, the date upon which they have mutually agreed (the "Closing
Date"). At the Closing, Alkermes shall deliver a certificate in the name of ALZA
representing the Shares, against delivery to Alkermes by ALZA of the Purchase
Price by wire transfer in immediately available funds to an Alkermes' bank
account specified in written wire transfer instructions supplied to ALZA by
Alkermes at least two business days prior to the Closing.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ALKERMES. Alkermes hereby
represents and warrants to ALZA that:
2.1 ORGANIZATION AND GOOD STANDING. Alkermes is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania and has all requisite corporate power and authority
under its Articles of Incorporation, as amended (the "Articles") and Bylaws to
own and
2
operate its properties and assets and to carry on its business as now conducted.
2.2 AUTHORIZATION. Alkermes has the corporate power and authority to
execute, deliver and perform this Agreement and to issue and sell the Shares.
The execution, delivery and performance of this Agreement by Alkermes and the
issuance and delivery of the Shares have been duly authorized by all necessary
corporate action on the part of Alkermes. Alkermes is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure so to
qualify would have a material adverse effect on its business, properties or
financial condition. This Agreement constitutes a valid and legally binding
obligation of Alkermes, enforceable against Alkermes in accordance with its
terms, expect as such may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights in general and by general
principles of equity.
2.3 VALID ISSUANCE OF SHARES. The Shares, when issued, sold delivered
and paid for in accordance with the terms hereof, will be validly issued, fully
paid and nonassessable, free and clear of any liens, charges, claims or
encumbrances and will not be subject to restrictions on transfer except as
provided by Sections 3.6, 3.7 and 3.8.
2.4 GOVERNMENT CONSENTS.
-------------------
(a) Except for the applicable requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976, as amended (the "HSR Act"),
any applicable state securities laws, and as contemplated by Section 6, no
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority, is required on the part of Alkermes, nor is any waiver,
consent or approval of any third party required to be obtained by Alkermes, in
connection with Alkermes' valid execution, delivery or performance of this
Agreement or the issuance and sale of the Shares by Alkermes hereunder.
(b) Alkermes shall file or cause to be filed with the Antitrust
Division of the United States Department of Justice and the Federal Trade
Commission pursuant to the HSR Act all requisite documents and notifications
required of Alkermes in connection with the transactions contemplated by this
Agreement.
(c) Alkermes shall make any filings required to be made under
applicable state securities laws in connection with the transactions
contemplated by this Agreement, within the applicable stipulated statutory
period before or after the sale of the Shares as may be required pursuant to
such laws.
2
3
2.5 LITIGATION. As of the date of this Agreement, there is no action,
suit, proceeding or investigation pending or currently threatened against
Alkermes which questions the validity of this Agreement or the right of Alkermes
to enter into it or to consummate the transactions contemplated hereby. Except
as disclosed in the SEC Filings (as defined in Section 2.7), as of the date of
this Agreement there is no action, suit, proceeding or investigation pending or
currently threatened which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially adversely affect the
business, properties, operations, financial condition, income or, to the best of
Alkermes' knowledge, business prospects of Alkermes and its subsidiaries (the
"Subsidiaries"), taken as a whole, as presently being conducted.
2.6 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
performance of this Agreement by Alkermes and the consummation by Alkermes of
the transactions contemplated hereby will not conflict with, or result in any
violation of, or constitute, with or without the passage of time and giving of
notice, either a default under any provision of its Articles of Bylaws, or in
default in the performance or observance of any material provision of any
material instrument or contract to which it is a party or by which it is bound.
No third party has any pre-emptive rights, or rights of first refusal or first
opportunity or similar rights to purchase, or to offer to purchase, all or any
part of the Shares.
2.7 DISCLOSURE. Alkermes has furnished to ALZA (i) Alkermes' Annual
Report on Form 10-K for the fiscal year ended March 31, 1996 (the "1996 Annual
Report"), as filed with the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"); (ii) Alkermes' proxy statement for its 1996 Annual Meeting of
Shareholders; (iii) Alkermes' reports on Form 10-Q for the fiscal quarters ended
June 30, 1996, September 20, 1996 and December 31, 1996 (collectively, the
"Quarterly Reports"), as filed with the SEC pursuant to the Exchange Act, and
(v) all other reports as filed by Alkermes with the SEC since March 31, 1996
(the documents referred to in clauses (1)-(v) above being referred to
hereinafter, collectively, as the "SEC Filings"). As of their respective dates,
the SEC Filings (including all documents incorporated by reference therein) do
not contain and untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading,
except, in the case of any SEC Filing, any statement or omission therein which
has been corrected or otherwise disclosed or updated in a subsequent SEC Filing.
Since March 31, 1996, Alkermes has timely filed with the SEC all reports,
documents, definitive proxy statements and all other filings required to be
filed with the SEC under the rules
3
4
and regulations of the SEC, and all such reports, documents, definitive proxy
statements and other filings complied in all material respects with all
applicable requirements of the Exchange Act. The audited consolidated financial
statements of Alkermes included or incorporated by reference in the 1996 Annual
Report and the unaudited consolidated financial statements contained in the
Quarterly Reports have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis throughout the
period indicated and with each other, except as may be indicated therein or in
the notes thereto and except that the unaudited financial statements may not
contain all footnotes and adjustments required by United States generally
accepted accounting principles, and fairly present the financial position of
Alkermes and its consolidated subsidiaries as at the dates thereof and the
results of its operations and statements of cash flows for the periods then
ended, subject, in the case of the unaudited interim consolidated financial
statements, to normal year-end adjustments, and recognizing that the results of
operations of interim period or full fiscal year. Alkermes has furnished to ALZA
a Private Placement Memorandum dated as of February 13, 1997 (the "Memorandum")
related to the transaction contemplated hereby. The Memorandum does not contain
any untrue statements of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
2.8 CHANGES. Between March 31, 1996 and the date of this Agreement,
except as disclosed in the SEC Filings, there has not been:
(a) any change in the assets, liabilities, financial condition,
operating results or to the best of Alkermes' knowledge, prospects of Alkermes
and its Subsidiaries taken as a whole from that reflected in the 1996 Annual
Report, except changes in the ordinary course of business that have not been, in
the aggregate, materially adverse;
(b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the business, properties or
financial condition of Alkermes and its Subsidiaries taken as a whole (and
except that Alkermes expects to continue to incur substantial operating losses,
which may be material);
(c) any waiver or compromise by Alkermes of a material right or
of a material debt owed to it;
(d) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by Alkermes,
4
5
except in the ordinary course of business and which is not material to the
business, properties or financial condition of Alkermes and its Subsidiaries
taken as a whole (as such business is presently conducted);
(e) any change to a material contract or arrangement by which
Alkermes or any of its assets is bound or subject, or any breach or waiver of
any breach of or under any such contract or amendment (or the occurrence of any
event which would, as result of the passage of time, become or result in such a
breach or waiver);
(f) any sale, assignment or transfer to a third party that is
not an Affiliated (as hereafter defined) of any material patents, trademarks,
copyrights, trade secrets or other intangible assets for compensation which is
less than fair value;
(g) any mortgage, pledge, transfer of a security interest in, or
lien, created by Alkermes, with respect to any of its material properties or
assets, except liens for taxes not yet due or payable;
(h) any declaration, setting aside or payment or other
distribution in respect of any of Alkermes' capital stock;
(i) received by or on behalf of Alkermes any notice from the
United Stated Food and Drug Administration, the United States or any foreign
Patent Office, or any governmental agency or third party of any claim or adverse
occurrence related to any product in development, patent or trademark of
Alkermes; any negative result of any clinical trials conducted or being
conducted by or on behalf of Alkermes; any information as to the pending or
potential introduction in the near future of any product directly competitive
with RMP-7; or the notice of cancellation, termination or material reduction in
funding of any client project or program; or
(j) any event or condition of any type that has (or will as a
result of the passage of time) materially and adversely affected (or affect) the
business, properties or financial condition or, to the best of Alkermes'
knowledge, the business prospects of Alkermes and its Subsidiaries taken as a
whole.
For purposes of this Agreement the term "Affiliate" means any individual or
entity directly or indirectly controlling by or under common control with, a
party to this Agreement. Without limiting the foregoing, the direct or indirect
ownership of 50% or more of the outstanding voting securities of an entity, or
the right to receive 50% or more of the profits or earnings of an entity, shall
be deemed to constitute control.
5
6
2.9 NASDAQ NATIONAL MARKET. The Common Stock is currently traded on
the Nasdaq National Market, and Alkermes knows of no reason or set of facts
which is likely to result in the termination of such trading. Nothing in this
Section 2.9 shall be interpreted to preclude Alkermes from listing its Common
Stock on any other national securities exchange. Alkermes shall take all actions
reasonably required in order to have the Shares listed as additional shares on
the Nasdaq National Market prior to the Closing Date.
2.10 CAPITALIZATION: OPTIONS AND WARRANTS. The authorized capital
stock of Alkermes consists of 5,000,000 shares of capital stock, par value .01
per share and 40,000,000 shares of Common Stock, par value $.01 per share, of
which 18,517,394 shares of Common Stock were issued and outstanding on December
31, 1996 and 1,388,308 shares of Common Stock were issuable upon exercise of
outstanding warrants on January 9, 1997. Except as disclosed in the SEC Filings,
and except for the transactions contemplated by this Agreement, since March 31,
1996, Alkermes has not granted any option (except for stock options granted
under Alkermes' stock option and stock award plans), warrants, rights (including
conversion or preemptive rights), or similar right, to any person or entity to
purchase or acquire any rights with respect to any shares of capital stock of
Alkermes, including the Shares. The total number of shares of Common Stock of
Alkermes issued from December 31, 1996 to the date of this Agreement is not more
than 100,000. The total number of shares of Common Stock subject to stock
options granted since December 31, 1996 to the date of this Agreement is 2,750.
There are no outstanding rights to cause Alkermes to register the securities
held by any person or entity under the Securities Act of 1933, as amended (the
"1933 Act"), except with respect to the outstanding warrants.
2.11 SUBSIDIARIES. Alkermes' only subsidiaries are Alkermes Controlled
Therapeutics, Inc., Alkermes Controlled Therapeutics Inc. II, Alkermes
Development Corporation II, Alkermes Europe, Ltd., and Alkermes Investments,
Inc. Each United States Subsidiary has been duly incorporated under the laws of
its respective jurisdiction of incorporation. Each subsidiary of Alkermes has
full corporate power and authority to own or lease its properties and conduct
its business as presently conducted, and is duly qualified or licensed to
transact business in all jurisdictions in which the character of the property
owned or leased or the nature of the business transacted by it requires such
qualification (except where the failure to be so qualified would not have a
material adverse effect on the business, properties, operations, financial
condition or income of Alkermes and its Subsidiaries, taken as a whole, as
presently being conducted). Alkermes owns 100% of the shares of each of its
Subsidiaries, free and clear of any charges or encumbrances, and
6
7
there are no outstanding options, warrants, or rights to purchase any securities
of any subsidiaries.
3. REPRESENTATIONS, WARRANTS AND COVENANTS OF ALZA. ALZA hereby
represents and warrants to Alkermes that:
3.1 AUTHORIZATION. This Agreement constitutes ALZA's valid and
legally binding obligation, enforceable against ALZA in accordance with its
terms, except as such may be limited by bankruptcy, insolvency or other similar
laws effecting the enforcement of creditors' rights in general or by general
principles of equity. ALZA Agreement and perform its obligations hereunder. The
execution, delivery and performance of this Agreement by ALZA has been duly
authorized by all necessary corporate action on the part of ALZA.
3.2 GOVERNMENT CONSENTS.
-------------------
(a) Except for the applicable requirements of the HSR Act, no
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority is required on the part of ALZA in connection with ALZA's
valid execution, delivery or performance of its obligations under this Agreement
or the purchase of the Shares by ALZA hereunder.
(b) ALZA will promptly file or cause to be filed with the
Antitrust Division of the United States Department of Justice and the Federal
Trade Commission pursuant to the HSR Act all requisite documents and
notifications required of it in connection with the transactions contemplated by
this Agreement.
3.3 PURCHASE ENTIRELY FOR OWN ACCOUNT. The Shares will be acquired
for ALZA's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and ALZA has no present intention of
selling, granting any participation in, or otherwise distributing the same
except in compliance with the registration requirements of the 1933 Act (unless
an exception is available). ALZA does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Shares.
3.4 INVESTMENT EXPERIENCE. ALZA acknowledges that it can bear the
economic risk of its investment and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Shares. ALZA also represents it has not been
organized for the purpose of acquiring the Shares; and ALZA is an "accredited
investor" as that term is defined in Regulation D under the 1933 Act.
7
8
3.5 INFORMATION PROVIDED. ALZA has had full opportunity to ask any
and all questions of the officers of Alkermes and to examine certain documents
of Alkermes, including its most recent Annual Report on Form 10-K and subsequent
quarterly reports on Form 10-Q, its current report on Form 8-K and the
Memorandum. ALZA is aware that the results of Alkermes' double-blind,
placebo-controlled Phase II clinical trials for RMP-7 are expected in the second
calendar quarter of 1997; and that no one, including Alkermes, knows or will
know what the results of those trials will be until the data has been received
and analyzed.
3.6 RESTRICTED SECURITIES. ALZA understands that the Shares have not
been registered under the 1933 Act and therefore are "restricted securities"
under the federal securities laws and that under such laws, and applicable
regulations such Shares may be resold without registration under the 1933 Act
only in certain limited circumstances. In this connection, ALZA represents that
it is familiar with SEC Rule 144 promulgated under the 1933 Act ("Rule 144"), as
presently in effect, and understands the resale limitations imposed thereby and
by the Act.
3.7 LIMITATIONS ON DISPOSITION. ALZA further shall not make any
disposition of all or any portion of the Shares unless and until:
(a) There is then in effect a registration statement under the
1933 Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) ALZA shall have furnished Alkermes with an opinion of
counsel, reasonably satisfactory to Alkermes, that such disposition will not
require registration of such Shares under the 0000 Xxx.
3.8 LEGEND. It is understood that the certificates evidencing the
Shares may bear the following legend: "The securities evidenced by this
certificate have not been registered under the Securities Act of 1933, as
amended (the "Act"), and are "restricted securities" as defined in Rule 144
promulgated under the Act. The securities may not be sold or offered for sale or
otherwise distributed except (i) pursuant to an effective registration statement
for the securities under the Act; (ii) in compliance with Rule 144; or (iii)
after receipt of an opinion of counsel reasonably satisfactory to Alkermes that
such registration or compliance is not required as to said sale, offer or
distribution".
8
9
4. CONDITIONS OF ALZA'S OBLIGATIONS.
--------------------------------
4.1 CONDITIONS OF ALZA'S OBLIGATIONS AT THE CLOSING. The obligations
of ALZA to Alkermes at the Closing are subject to the fulfillment on or before
the Closing of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Alkermes contained in Section 2 hereof shall be true and correct
on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the closing Date
except for representations and warranties that speak as of a specific date or
time other than the Closing Date (which need only be true and correct in all
material respects as of such date and time).
(b) PERFORMANCE. Alkermes shall have performed and complied with
all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
(c) COMPLIANCE CERTIFICATE. The Chief Executive Officer or
President of Alkermes shall deliver to ALZA at the Closing a certificate, in the
form attached as EXHIBIT A hereto, certifying that the conditions specified in
Sections 4.1(a) and (b) hereof have been fulfilled.
(d) GOVERNMENTAL APPROVALS. Any required governmental approvals
described in Section 2.4(c) shall have been obtained by Alkermes.
(e) WAITING PERIODS. All waiting periods applicable under the
HSR Act shall have expired or been terminated.
(f) TENDER OF SHARES. Alkermes shall have issued and tendered
for delivery to ALZA a certificate representing the Shares, subject only to
delivery of the Purchase Price by ALZA in accordance with Section 1.2.
(g) LISTING OF SHARES. The Shares shall have been listed as
additional shares on the Nasdaq National Market.
5. CONDITIONS OF ALKERMES' OBLIGATIONS.
-----------------------------------
5.1 CONDITIONS OF ALKERMES' OBLIGATIONS AT THE CLOSING. The
obligations of Alkermes to ALZA at the Closing are subject to the fulfillment on
or before the Closing of each of the following conditions by ALZA:
9
10
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of ALZA contained in Section 3 hereof shall be true and correct on
and as of the Closing Date with the same effect as though such representations
and warranties had been made on and as of the Closing Date.
(b) PERFORMANCE. ALZA shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
(c) COMPLIANCE CERTIFICATE. The President or a Vice President of
ALZA shall deliver to Alkermes at the Closing a certificate in the form attached
as EXHIBIT B hereto, certifying that the conditions specified in Section 5.1(a)
and (b) hereof have been fulfilled.
(d) WAITING PERIODS. All waiting periods applicable under the
HSR Act shall have expired or been terminated.
(e) LISTING OF SHARES. The Shares shall have been listed as
additional shares on the Nasdaq National Market.
(f) PAYMENT OF PURCHASE PRICE. ALZA shall have delivered to
Alkermes the Purchase Price in accordance with Section 1.2 subject only to the
delivery by Alkermes of the certificate representing the Shares.
6. REGISTRATION RIGHTS
-------------------
6.1 DEFINITIONS. For purposes of this Section 6:
(a) The terms "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the 1933 Act, and the declaration or
ordering of effectiveness of such registration statement or document;
(b) The term "Registrable Securities" means (1) the Shares, and
(2) any shares of Common Stock of Alkermes issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of, such Shares, excluding all in cases, however, any Registrable
Securities sold by a person in a transaction in which its rights under this
Section 6 are not assigned. As to any particular Registrable Securities, once
issued such securities shall cease to be Registrable Securities when (i) a
registration statement with respect to the sale of such securities shall have
become effective under the 1933 Act and such securities shall
10
11
have been disposed of in accordance with such registration statement, (ii) such
securities shall have been distributed pursuant to Rule 144, or (iii) such
securities shall have ceased to be outstanding.
(c) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding and the number of shares of Common Stock issuable pursuant to then
exercisable or convertible securities, which are, in each case, Registrable
Securities;
(d) The term "Managing Underwriter" means one or more nationally
recognized firms of investment bankers selected in accordance with Section
6.2(b).
6.2 REGISTRATION.
-------------
(a) SHELF REGISTRATION. As soon as practicable after the Closing
Date (and in no event later than 30 days after the Closing Date), Alkermes will
file a shelf registration statement under Rule 415 of the 1933 Act with the SEC
(or amend its currently filed registration statement) permitting the disposition
of the Registrable Securities in accordance with the intended methods thereof as
specified in writing by ALZA (the "Shelf Registration"). Alkermes will use its
best efforts to have the Shelf Registration declared effective by the SEC as
soon as practicable after the filing date of the Registration Statement.
(b) PIGGY-BACK REGISTRATION. If (but without any obligation to
do so) Alkermes proposes to register (including for this purpose a registration
effected by Alkermes for any shareholders other than ALZA or any warrant
holders) any of its Common Stock under the 1933 Act in connection with the
underwritten public offering of such securities solely for cash (other than a
registration relating solely to the sale of securities to participants in a
Alkermes employee benefits plan), Alkermes shall, at such time, promptly give
ALZA written notice of such registration. Upon the written request of ALZA given
within 5 days after such notice by Alkermes in accordance with Section 7.6
hereof, Alkermes shall, subject to the provisions of Section 6.10 hereof, cause
to be included in such registration and the underwriting involved therein all of
the Registrable Securities that ALZA has requested to be registered.
6.3 OBLIGATIONS OF ALKERMES. Alkermes shall, as expeditiously as
reasonably possible:
(a) With respect to any registration of any Registrable
Securities pursuant to Section 6.2(a), prepare and file with the SEC a
registration statement with respect to such
11
12
Registrable Securities and use its best efforts to cause such registration
statement to become effective. As far in advance as practical before filing such
registration statement or any supplement or amendment thereto (excluding any
document incorporated therein by reference) Alkermes will furnish to ALZA and
its counsel copies of reasonably complete drafts of all such registration
statement supplement or amendment proposed to be filed, and ALZA and its counsel
shall have the opportunity to comment on any information that is contained
therein or omitted therefrom and Alkermes will make the changes reasonably
requested by ALZA and its counsel with respect to such information prior to
filing any such registration statement or amendment or supplement.
(b) With respect to any registration of any Registrable
Securities pursuant to Section 6.2(a), prepare and file with the SEC such
amendments and supplements to the Registration Statement and the prospectus used
in connection with the registration as may be necessary to comply with the
provisions of the 1933 Act with respect to the disposition of all securities
covered by the registration, including at ALZA's request, any amendments or
supplements necessary to reflect any information regarding ALZA or its plan of
distribution, until the earlier of (i) such time as the Shares pursuant to Rule
144, to dispose of all of the Registrable Securities, without registration, in a
three month period.
(c) With respect to any registration of any Registrable
Securities pursuant to Section 6.2, furnish to ALZA such number of copies of a
prospectus, including a preliminary prospectus, as then amended or supplemented,
in conformity with the requirements of the 1933 Act, and such other documents as
it may reasonably request in order to facilitate the disposition of Registrable
Securities owned by it.
(d) With respect to any registration of any Registrable
Securities pursuant to Section 6.2(a), use its best efforts to register and
qualify the securities covered by the Shelf Registration under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by ALZA, provided that Alkermes shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.
(e) With respect to any registration of any Registrable
Securities pursuant to Section 6.2, notify ALZA at any time when a prospectus
relating thereto is required to be delivered under the 1933 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
12
13
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing, and, at the request of ALZA, as promptly as
practicable prepare and furnish ALZA a reasonable number of copies of a
prospectus included in an effective post-effective amendment or the supplemented
prospectus correcting such misstatement or omission.
(f) With respect to any registration of any Registrable
Securities pursuant to Section 6.2(b), furnish, at the request of ALZA, (i) an
opinion of the counsel representing Alkermes for the purposes of registration,
in form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to ALZA and (ii) a
comfort letter and subsequent bring-down letter, from the independent certified
public accountants of Alkermes, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any. If the Registrable
Securities are being sold in an underwritten offering pursuant to Section 6.2(b)
hereof, such opinion shall be furnished and dated as of the closing of the sale
to the underwriters, such comfort letter shall be furnished and dated as of the
date of the underwriting agreement and the bring-down letter shall be furnished
and dated as of the closing of the sale to the underwriters. Notwithstanding the
foregoing, if the Registrable Securities are not being sold in an underwritten
offering pursuant to Section 6.2(b), an opinion as described above shall be
furnished and dated as of the date that the registration statement with respect
to such securities becomes effective.
(g) In the event of any underwritten public offering of any
Registrable Securities pursuant to Section 6.2(b), enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter of such offering, provided, however, that ALZA shall
also enter into and perform its obligations under any such agreement.
6.4 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of Alkermes to take any action pursuant to this Section 6 that ALZA
meet the following conditions:
(a) ALZA shall furnish such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required by applicable federal or state securities
laws to effect the registration of the Registrable Securities.
13
14
(b) All information specifically with respect to ALZA furnished
to Alkermes by or on behalf of ALZA for use in connection with the preparation
of any registration statement relating to such Registrable Securities shall be
true and correct in all material respects and shall not omit any material fact
necessary to make such information, in light of the circumstances under which it
was made, not misleading.
(c) ALZA shall distribute in connection with the offering and
sale of the Registrable Securities the prospectus or other offering material
permitted by the 1933 Act and prepared by Alkermes, and only such materials.
(d) ALZA will comply with the provisions of the Exchange Act and
the regulations thereunder.
(e) To assist Alkermes in qualifying the Registrable Securities
for sale under applicable state securities laws, ALZA will advise Alkermes of
each jurisdiction in which it intends to offer or sell any or all Registrable
Securities, and will agree not to offer or sell any Registrable Securities in
any jurisdiction where the Registrable Securities are not registered or exempt
from registration.
(f) ALZA will inform Alkermes in writing of any and all sales,
or other transfers or dispositions, of any Registrable Securities within 15
calendar days following each such disposition.
(g) In the event of any underwritten public offering of any
Registrable Securities pursuant to Section 6.2(b), ALZA shall enter into and
perform its obligations under an underwriting agreement, in the form agreed upon
by Alkermes and the underwriters selected by it that is customary for the type
of transaction contemplated and reasonably acceptable to ALZA.
6.5 EXPENSES OF REGISTRATION. Alkermes shall bear the expenses
incurred in connection with the Shelf Registration and any amendment or
supplement thereof. The expenses borne by Alkermes pursuant to this Section 6.5
shall exclude (i) broker fees and commissions and transfer taxes, if any, in
respect of Registrable Securities agreed to in writing by ALZA, which shall be
payable by ALZA; (ii) all out-of-pocket expenses of ALZA's brokers or dealers;
and (iii) all fees and disbursements of counsel for ALZA or any such brokers or
dealers.
6.6 COMPANY SUSPENSION. ALZA shall upon receipt of any notice from
Alkermes that in the good faith judgment of Alkermes the filing or making of
offers and sales pursuant to the Shelf Registration would require the public
disclosure of
14
15
material information, the disclosure of which would not otherwise be required at
that time and either compiling such information would require unreasonable
effort in the circumstances or disclosure thereof would have a material adverse
effect on Alkermes, Alkermes shall have the right to suspend such sales or
postpone such filing for a period which shall not exceed 30 days (provided that
no such notice may be given beginning when ALZA notifies Alkermes that marketing
efforts have begun by an underwriter on behalf of ALZA in connection with an
offering thereof and ending when such offering is completed or abandoned);
PROVIDED, HOWEVER, that Alkermes may not use the right provided by this
paragraph until 120 days have elapsed from the end of the most recent suspension
or postponement period initiated by Alkermes and PROVIDED, FURTHER, HOWEVER,
that immediately following disclosure of such information or withdrawal or
abandonment of the transaction requiring suspension or postponement Alkermes
will make such filing or take such steps as are necessary to permit such offers
and sales, as the case may be. Any suspension under this Section 6.6(b) will
extend, for an amount of time equal to such suspension, the termination date of
any registration rights, or obligations to keep a registration effective,
otherwise provided in this Agreement.
6.7 MARKET HOLDBACK. Until such time as ALZA holds less than 4% of
the outstanding Common Stock of Alkermes, ALZA shall not sell, transfer or
otherwise dispose of (other than to a transferee who agrees to be similarly
bound) any Registrable Securities during any specified holdback period of up to
120 days following the effective date of a registration statement filed by
Alkermes under the 1933 Act for an offering by Alkermes of Common Stock or other
securities (other than the Shelf Registration or any other registration in which
Registrable Securities are included) if, (i) the holdback is requested in
writing by the managing underwriter of the offering; (ii) the same restriction
is agreed to by all of the executive officers and directors of Alkermes; and
(iii) all other shareholders who have registration rights and whose holding are
more than 4% of the Common Stock of Alkermes (on a converted basis) are also
subject to the same holdback. In such event, ALZA shall execute and deliver a
lockup agreement in substantially the form requested by the managing Underwriter
and signed by the officers and directors of Alkermes and such other
shareholders.
6.8 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this Section 6:
(a) To the extent permitted by law, Alkermes will indemnify and
hold harmless ALZA, and each of its officers and directors, any underwriter (as
defined in the 0000 Xxx) for ALZA and each person, if any, who controls ALZA or
any such
15
16
underwriter within the meaning of the 1933 Act or the Exchange Act
(collectively, "Indemnified ALZA parties"), against any losses, claims, damages,
or liabilities (joint or several) to which they may become subject under the
1933 Act, the Exchange Act or other federal or state law or otherwise, insofar
as such losses, claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon a claim by a third party alleging any of the
following statements, omissions or violations (collectively, "Indemnified
Violations"): (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement on the date it becomes effective,
including any preliminary prospectus or final prospectus contained therein, or
any amendments or supplements thereto, or any document incident to such
registration (such as a Blue Sky qualification or compliance); (ii) the omission
or alleged omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein not misleading; or (iii)
any other violation or alleged violation by Alkermes of the 1933 Act, the
Exchange Act, any state securities law or any rule or regulation promulgated
under the 1933 Act, the Exchange Act or any state securities law, and Alkermes
will reimburse the ALZA indemnified Parties for any legal (to the extent
provided in Section 6.8(c) and other expenses reasonably incurred in connection
with defending any such indemnified Violation; provided, however, that the
indemnity agreement contained in this Section 6.8(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 Alkermes (which consent shall not
be unreasonably withheld), nor shall Alkermes be liable 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 indemnified Violation which occurs in reliance upon and
in conformity with written information furnished expressly for use in connection
with such registration by any of the indemnified ALZA Parties expressly for use
in connection with the registration; and provided further, however, that the
indemnity provided in this Section 6.8(a) with respect to any preliminary
prospectus shall not apply, if the untrue statement or alleged untrue statement
or omission or alleged omission was corrected in the final prospectus.
(b) To the extent permitted by law, ALZA will indemnify and hold
harmless Alkermes, each of its officers and directors, any underwriter (as
defined in the 1933 Act), any other person selling securities in such
registration statement and each person, if any, who controls Alkermes, any such
underwriter or any such person within the meaning of the 1933 Act or the
Exchange Act (collectively, the "Indemnified Alkermes Parties"), against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing person may become subject, under the 1933 Act, the Exchange Act or
other
16
17
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect hereto) arise out of or are based upon a claim by a third
party arising out of or based upon any written information furnished by any of
the indemnified ALZA Parties expressly for use in connection with such
registration, and ALZA will reimburse each of the Indemnified Alkermes Parties
for any legal and other expenses reasonably incurred in connection with
defending any such claims, liability, demand, loss or action; provided, however,
that the indemnity agreement contained in this Section 6.8(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 ALZA (which consent will
not be unreasonably withheld). In no event shall the total amount payable by
ALZA indemnified Parties for indemnity under this Section 6.8(b) exceed ALZA's
proceeds for the offering.
(c) Promptly after receipt by an indemnified party under this
Section 6.8 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 6.8, deliver to
the indemnifying party a written notice of the commencement thereof generally
summarize the claims and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the indemnifying parties;
provided, however, that an indemnified party shall have the right to retain its
own counsel, with the reasonable fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to the
availability of legal defenses to the indemnified party which are different from
or in addition to those available to the indemnifying party. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 6.8, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 6.8.
(d) The obligations of Alkermes and ALZA under this Section 6.8
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 6, and otherwise.
6.9 REPORTS UNDER THE EXCHANGE ACT. With a view to making available
to ALZA the benefits of Rule 144 and any other
17
18
rule or regulation of the SEC that may at any time permit ALZA to sell
securities of Alkermes to the public without registration, Alkermes agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of Alkermes under the Exchange Act; and
(c) furnish to ALZA, so long as ALZA owns any Registrable
Securities, promptly upon request (i) a written statement by Alkermes that it
has complied with the reporting requirements of Rule 144, and the Exchange Act,
(ii) a copy of the most recent annual or quarterly report of Alkermes and such
other reports and documents so filed by Alkermes, and (iii) such other
information as may be reasonably requested in availing ALZA of any rule or
regulation of the SEC which permits the selling of any such securities without
registration.
6.10 UNDERWRITING REQUIREMENTS. In connection with any proposed
registration as to which ALZA has a right to notice under Section 6.2(b):
(a) Alkermes shall not be required to include in such
registration any of the Registrable Securities unless ALZA accepts the terms of
the underwriting that are agreed upon between Alkermes and the underwriters
selected by it; and
(b) If the underwriter for the offering advises Alkermes in
writing that the number of Registrable Securities requested to be included will
adversely affect the success of the offering, Alkermes shall include in such
offering only the quantity of Registrable Securities, if any, as shall be
determined as set forth below:
(i) first Alkermes shall include in such underwriting all
of the securities Alkermes proposes to sell; and
(ii) then, Alkermes shall include the number of Registrable
Securities and Alkermes securities of other holders that the underwriter advises
will not adversely affect the success of the offering, allocated, pro rata,
among ALZA and the other holders entitled to registration, based upon the number
of shares of Common Stock each such person shall have requested Alkermes to
include in the offering.
6.11 TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The rights to
cause Alkermes to register Registrable Securities and the obligations of
Alkermes pursuant to this Section 6 may be
18
19
transferred or assigned by ALZA in connection with transfers of shares to an
Affiliate of ALZA or in connection with transfers of Shares having a fair market
value of at least $5,000,000, provided that; (i) such transfer is permitted
under this Agreement; (ii) the transferee agrees to be bound by ALZA's remaining
obligations set forth in Section 6 and 7 hereof and (iii) such rights are
transferred to no more than ten transferees.
6.12 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 6
may be amended or the observance thereof may be waived either generally or in a
particular instance and either retroactively or prospectively, only with the
written consent of Alkermes and the holders of 66 2/3% of the Registrable
Securities then outstanding. Any amendment or waiver effected in accordance with
this Section 6.12 shall be binding upon each holder of any Registrable
Securities, each future holder of Registrable Securities, ALZA and Alkermes.
Nothing herein shall prevent a holder of Registrable Securities from waiving its
individual rights.
7. MISCELLANEOUS.
-------------
7.1 SURVIVAL OF WARRANTIES. The warranties and representations of
Alkermes and ALZA contained in or made pursuant to his Agreement shall survive
the Closing, and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of ALZA or Alkermes.
7.2 SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and permitted assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
7.3 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the Commonwealth of Pennsylvania as applied to agreements
among Pennsylvania residents entered into and to be performed entirely within
Pennsylvania.
7.4 COUNTERPARTS. This Agreement shall become binding when any one or
more counterparts hereof, individually or taken together, shall bear the
signatures of Alkermes and ALZA. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original as against any party
whose signature appears thereon, but all of which together shall constitute one
and the same instrument. A facsimile transmission
19
20
of the signed Agreement shall be legal and binding on both parties.
7.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.6 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be sent by certified mail or courier
service, charges pre-paid, or by facsimile transmission, to the address or
facsimile number specified below:
If to Alkermes:
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Fax No.: (000) 000-0000
Attention: Chief Financial Offer
If to ALZA:
950 Page Mill Road
X.X. Xxx 00000
Xxxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Senior Vice President and General Counsel
or to such other address or facsimile number as the person may specify in a
notice duly given to the sender as provided herein. A notice will be deemed to
have been given as of the date that is five days after it is deposited in the
United States mail or the date it is delivered by a courier service or, in the
case of facsimile transmission or personal communication, when received.
7.7 FINDERS' FEE. Each party agrees to indemnify and to hold harmless
the other party from any liability for any commission or compensation in the
nature of a finders' fee (and the costs and expenses of defending against such
liability or asserted liability) for which the indemnifying party or any of its
officers, partners, employees, or representatives is responsible.
7.8 EXPENSES. The parties shall shares equally the filing fee for any
HSR filing made prior to the Closing hereunder. Except as otherwise provided in
the preceding sentence and in Section 6 hereof, each party shall pay all costs
and expenses that it incurs with respect to the negotiation, execution, delivery
and performance of this Agreement. If any action at law or in equity is
necessary to enforce or interpret
20
21
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
7.9 PUBLICITY. Neither party, nor any of their respective Affiliates,
shall issue or cause the publication of any press release or other public
announcement with respect to this Agreement or any of the other transactions
contemplated hereby without the prior consultation of the other party, except as
may be required law or by any listing agreement with a national securities
exchange or by the SEC. The parties shall cooperate in determining the format,
date and time of day of the announcement of the execution and terms of this
Agreement, giving consideration to the requirements of all applicable laws and
regulations, and each party will obtain the prior approval by the other party of
any press release to be issued relating to the announcement of the execution of
this Agreement or the Closing hereunder, which prior approval shall not be
unreasonably withheld or delayed. This Section 7.9 shall not apply to the extent
that any disclosure is of information in the public domain other than through
the fault of the disclosing party in violation hereof.
7.10 AMENDMENTS AND WAIVERS. This Agreement may not be amended,
supplemented or otherwise modified except by an instrument in writing signed by
both parties that specifically refers to this Agreement. Either party hereto
may, only by an instrument in writing, waive compliance by the other party
hereto with any term or provision of this Agreement on the part of such other
party to be performed or complied with. The waiver by a party hereto of a breach
of any term or provision of this Agreement shall not be construed as a waiver of
any subsequent breach. Any amendment or waiver effected in accordance with this
Section 7.10 shall be binding upon each party and its permitted assigns.
7.11 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be amended
to conform, as closely as practicable, to the intent of the parties as set forth
herein or, if such amendment is not possible, such provision, shall be stricken
and the remaining provisions will remain in full force and effect.
21
22
IN WITNESS WHEREOF, the parties, through their duly authorized officers,
have duly executed this Agreement as of the date first above written.
Alkermes, Inc. ALZA Corporation
By:_____________________ By:_______________________
Title:__________________ Title_____________________
22
