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*** Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. Sections 200.80,
200.83 and 230.406.
EXHIBIT 10.39
RESTRICTED STOCK PURCHASE AGREEMENT
Agreement made as of this 31st day of October, 1996 by and between
Signal Pharmaceuticals, Inc., a California corporation (the "Company"), and
University of Massachusetts (or "Purchaser").
Unless otherwise defined herein, all capitalized terms used herein shall
have the same meanings given to them in that certain Exclusive License Agreement
(the "License Agreement") by and between Purchaser and the Company, dated
October 31, 1996, a copy of which is attached hereto as Exhibit 1.
1. PURCHASE OF SHARES
1.1 Purchase. In consideration of Purchaser's grant of certain patent
and technology rights to the Company pursuant to the License Agreement, the
Company shall issue to Purchaser [***] shares of its Common Stock. All Shares of
the Company's Common Stock issued to Purchaser pursuant to this paragraph, shall
hereinafter be referred to as the "Shares"
2.0 INVESTMENT REPRESENTATIONS
2.1 Payment. The Company represents and warrants that the Shares, when
issued in accordance with the provisions of this Agreement, will be duly and
validly issued, fully paid, and non-assessable.
2.2 Exemption from Registration. The Shares have not been registered
tinder the 1933 Act, and are accordingly being issued to Purchaser in reliance
upon the exemption from such registration provided by 4(2) of the 1933 Act.
2.3 Investment Intent. Purchaser hereby warrants and represents that it
is acquiring the Shares for its own account and not with a view to their resale
or distribution and that it is prepared to hold the Shares for an indefinite
period and has no present intention to sell, distribute or grant any
participating interests in, the Shares except that Purchaser may transfer the
Shares to the University of Massachusetts Foundation ("the "Foundation").
Purchaser hereby acknowledges the fact that the Shares have not been registered
under the Securities Act of 1933, as amended (the "1993 Act"), and that the
Company is issuing the Shares to it in reliance on the representations made by
it herein.
***Confidential Treatment Requested
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2.4 Restricted Securities.
(a) Purchaser hereby confirms that it has been informed that the
Shares may not be resold or transferred unless such Shares are first registered
under the 1933 Act or unless an exemption from such registration is available.
Accordingly, Purchaser hereby acknowledges that it is prepared to hold the
Shares for an indefinite period and that it is aware that Rule 144 of the
Securities and Exchange Commission issued under the 1933 Act is not presently
available to exempt the sale of the Shares from the registration requirements of
the Act. Should Rule 144 subsequently become available, Purchaser is aware that
any sale of Shares effected pursuant to the Rule may, depending upon the status
of Purchaser as an "affiliate" or "non-affiliate" under the Rule, be made only
in limited amounts in accordance with the provisions of the Rule, and that in no
event may any Shares be sold pursuant to the Rule until Purchaser has held such
Shares for at least two (2) years following their issuance.
(b) Should the Company not become subject to the reporting
requirements of the Exchange Act, then Purchaser may, provided he/she is not at
the time an affiliate of the Company (nor was such an affiliate during the
preceding three (3) months), sell the Shares (without registration) pursuant to
paragraph (k) of Rule 144 after the Shares have been held for it period of three
(3) years following the effective date of the license agreement.
2.5 Disposition of Shares. Except as specifically set forth below,
Purchaser hereby agrees that it shall make no disposition of the Shares, unless
and until:
(a) it shall have complied with all requirements of this
Agreement applicable to the disposition of such Shares;
(b) it shall have notified the Company of the proposed
disposition and furnished it with a written summary of the terms and conditions
of the proposed disposition; and
(c) unless otherwise waived by the Company, it shall have
delivered to the Company a written opinion of counsel at the Company's expense,
in form and substance satisfactory to the Company, that (i) the proposed
disposition does not require registration of the Shares under the 1933 Act or
(ii) all appropriate action necessary for compliance with the registration
requirements of the 1933 Act or of any exemption from registration available
under the 1933 Act has been taken.
The Company shall not be required (i) to transfer on its books any
Shares which have been sold or transferred in violation of the provisions of
this Section 2, nor (ii) to treat as the owner of the Shares, or otherwise to
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accord voting or dividend rights to, any transferee to whom the Shares have been
so transferred.
2.6 Restrictive Legends. In order to reflect the restrictions on
disposition of the Shares, the stock certificates for the Shares shall be
endorsed with restrictive legends, including the following legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933. The shares have been
acquired for investment and may not be sold or offered for sale in the
absence of an effective registration statement for the shares under that
Act, a 'no action' letter of the Securities and Exchange Commission as
to such sale or offer, or an opinion of counsel to the Company that
registration under such Act is not required for such sale or offer."
3. TRANSFER RESTRICTIONS
3.1 Transferee Obligations. Each person (other than the Company and the
Foundation) to whom the Shares are transferred must, as a condition precedent to
the validity of such transfer, acknowledge in writing to the Company that such
person is bound by the provisions of this Agreement and that the transferred
shares are subject to the market stand-off provisions of paragraph 3.2 to the
same extent such shares would be so subject if retained by Purchaser.
3.2 Market Stand-Off.
(a) In connection with any underwritten public offering by the
Company of its equity securities pursuant to an effective registration statement
filed under the 1933 Act, including the Company's initial public offering (the
"IPO"), Purchaser and all subsequent holders of the Shares who derive their
chain of ownership through a transfer from Purchaser ("Owner") shall not sell,
make any short sale of, loan, hypothecate, pledge, grant any option for the
purchase of, or otherwise dispose or transfer for value or otherwise agree to
engage in any of the foregoing transactions with respect to, any Shares without
the prior written consent of the Company or its underwriters. Such limitations
shall be in effect for such period of time from and after the effective date of
the final prospectus for such offering as may be requested by the Company or
such underwriters.
(b) Owner shall be subject to the market standoff provisions of
this paragraph 3.2 provided and only if all of the executive officers and
directors of the Company are also subject to similar arrangements.
(c) in the event of any stock dividend, stock split,
recapitalization or other change affecting the Company's outstanding Common
Stock effected
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as a class without the Company's receipt of consideration, then any new,
substituted or additional securities distributed with respect to the Shares
shall be immediately subject to the provisions of this paragraph 3.2, to the
same extent the Shares are at such time covered by such provisions.
(d) In order to enforce the limitations of this paragraph 3.2,
the Company may impose stop-transfer instructions with respect to the Shares
until the end of the applicable standoff period.
4. REGISTRATION RIGHTS
4.1 For purposes of this Section 4:
(a) The term "register", "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document;
(b) The term "Registrable Securities" means the Common Stock
issued pursuant to this Agreement, excluding, however, any Registrable
Securities sold by a person in a transaction in which his rights under this
Section 4 are not assigned;
(c) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities.
(d) The term "Holder" means any person owning or having the right
to acquire Registrable Securities or any assignee thereof in accordance with
Section 4.7 hereof.
4.2 Company Registration, If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration effected
by the Company for shareholders other than the Holders) any of its stock or
other securities under the Act in connection with the public offering of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock plan, or a registration on
any form which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities, the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within twenty (20) days after mailing of such notice by the
Company in accordance with Section 5.2, the Company shall, subject to the
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provisions of Section 4.4, cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be registered.
43 Expenses of Company Registration. The Company shall bear and pay all
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to the registrations pursuant to Section
4.2 for each Holder (which right may be assigned as provided in Section 4.7),
including (without limitation) all registration, filing, and qualification fees,
printers' and accounting fees relating or apportionable thereto, but excluding
underwriting discounts and commissions relating to Registrable Securities.
4.4 Underwriting Requirements. In connection with any offering involving
an underwriting of shares of the Company's capital stock, the Company shall not
be required under Section 4.2 to include any of the Holders' securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between the Company and the underwriters selected by it (or by other persons
entitled to select the underwriters), and then only in such quantity as the
underwriters determine in their sole discretion will not jeopardize the success
of the offering by the Company. If the total amount of securities, including
Registrable Securities, requested by shareholders to be included in such
offering exceeds the amount of securities, sold other than by the Company that
the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable Securities,
which the underwriters determine in their sole discretion will not jeopardize
the success of the offering (subject to the rights of other security holders of
the Company, including, without limitation, preferred shareholders, the
securities so included to be apportioned pro rata among the selling
shareholders). For purposes of the preceding parenthetical concerning
apportionment, for any selling shareholder which is a holder of Registrable
Securities and which is a partnership or corporation, the partners, retired
partners and shareholders of such holder, or the estates and family members of
any such partners and retired partners and any trusts for the benefit of any of
the foregoing persons shall be deemed to be a single "selling shareholder", and
any pro-rata reduction with respect to such "selling shareholder" shall be based
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling shareholder", as defined in
this sentence.
4.5 Delay of Registration. No Holder 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 Section 4.
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4.6 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 4.
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the Securities Exchange Act of 1934, as amended (the
"1934 Act"), against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Act, or the 1934 Act or
other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation by the
Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, or the 1934 Act or any state securities
law; and the Company will pay to each such Holder, underwriter or controlling
person, as incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 4.6 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),
nor shall the Company 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 a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act, or the 1934 Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent ( and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such
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Holder expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably incurred by
any person intended to be indemnified pursuant to this subsection 4.69(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 4.6(b) claim, damage, liability or action if such settlement
is effected without the consent of the Holder, which consent shall not be
unreasonably withheld; provided, that, in no event shall any indemnify under
this subsection 4.6(b) exceed the gross proceeds from the offering received by
such Holder.
(c) The foregoing indemnity agreements of the Company and Holders
are subject to the condition that, insofar as they relate to any Violation made
in a preliminary prospectus but eliminated or remedied in the amended prospectus
on file with the SEC at the time the registration statement in question becomes
effective or the amended prospectus filed with the SEC pursuant to SEC Rule
424(b) (the "Final Prospectus"), such indemnity agreement shall not inure to the
benefit of any indemnified party if a copy of the Final Prospectus was furnished
to such indemnified party and was, not furnished to the person asserting the
loss, liability, claim or damage at or prior to the time such Final Prospectus
is required to be delivered under the Securities Act if such loss, claim or
damage would have been avoided had the indemnified party furnished the Final
Prospectus to such person.
(d) Promptly after receipt by an indemnified party under this
Section 4.6 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 4.6, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the 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 actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. 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
4.6, 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 4.6.
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(e) If the indemnification provided for in this Section 4.6 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements of omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall he determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(f) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(g) The obligations of the Company and Holders under this Section
4.6 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 4, and otherwise.
4.7 Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities pursuant to this Section 4 may be assigned
(but only with all related obligations) by a Holder to a transferee or assignee
of such securities who, after such assignment or transfer, holds at least twenty
percent (20%) of the shares of Registrable Securities originally purchased by
such Holder (subject to appropriate adjustment for stock splits, stock
dividends, combinations and other recapitalizations), provided the Company is,
within a reasonable time after such transfer, furnished with written notice of
the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned; and provided,
further, that such assignment shall be effective only if immediately following
such transfer the further disposition of such securities by the transferee or
assignee is restricted under the Act. For the purposes of determining the number
of shares of Registrable Securities held by a transferee or assignee, the
holdings or transferees and assignees of a partnership who are partners or
retired partners of such partnership (including spouses and ancestors, lineal
descendants and siblings of such
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partners or spouses who acquire Registrable Securities by gift, will or
intestate succession) shall be aggregated together and with the partnership;
provided that all assignees and transferees who would not qualify individually
for assignment of registration rights shall have a single attorney-in-fact for
the purpose of exercising any rights, receiving notices or taking any action
under this Section 4.
5. INTERPRETATION
5.1 Purchaser Undertaking. Purchaser hereby agrees to take whatever
additional action and execute whatever additional documents the Company may in
its judgment deem necessary or advisable in order to carry our or effect one or
more of the obligations or restrictions imposed on either Purchaser or the
Shares pursuant to the express provisions of this Agreement.
5.2 Notices. Any notice required or permitted in connection any matter
pertaining to this Agreement shall be given in writing and shall be deemed
effective upon personal delivery or upon deposit in the United States Mail,
registered or certified, postage prepaid and addressed to the party to be
notified at the address indicated below such party's signature line on this
Agreement or at such other address as such party may designate by 10 days'
advance written notice under this Section 5.2 to the other party to this
Agreement.
5.3 Governing Law. This agreement shall be construed and enforced in
accordance with, and shall be governed by, the laws of the State of California.
5.4 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
5.5 Successors and Assigns. The provisions of this Agreement shall inure
to the benefit of, and be binding upon, the Company and its successors and
assigns and Purchaser and Purchaser's legal representatives, heirs, legatees,
distributees, assigns and transferees by operation of law, whether or not any
such person shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms and conditions hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
SIGNAL PHARMACEUTICALS, INC.
By: /s/ XXXX X. XXXXX
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Xxxx X. Xxxxx, Ph.D.
President and CEO
UNIVERSITY OR MASSACHUSETTS
By: /s/ XXXXXX F.X. XxXXXXX
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Xxxxxx F.X. XxXxxxx
Executive Director
Office of Commercial Ventures and Intellectual Property
By: /s/ XXXXXXX X. XXXXXXXX
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Xxxxxxx X. Xxxxxxxx
Vice President for Management and Fiscal Affairs
University Treasurer
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