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EXHIBIT 5
REGISTRATION RIGHTS AGREEMENT
This Agreement dated as of September 23, 1997 is entered into by and
among Diatide, Inc., a Delaware corporation (the "Company"), and the
Stockholders identified on Schedule I hereto (the "Stockholders").
In consideration of the mutual promises and covenants contained in
this Agreement, the Company and the Stockholders agree as follows:
1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
"Commission" means the Securities and Exchange
Commission, or any other Federal agency at the time administering the
Securities Act and the Exchange Act.
"Common Stock" means the common stock, $.001 par
value per share, of the Company.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, or any similar Federal statute, and the rules and regulations
of the Commission issued under such Act, as they each may, from time to time,
be in effect.
"Other Registrable Shares" means at any time all
shares of Common Stock (other than Stockholder Registrable Shares) (i)
currently or hereafter issued by the Company with respect to which the holders
thereof have the right to require the Company to register such shares pursuant
to the Securities Act; (ii) which would otherwise be Stockholder Registrable
Shares but for the second to last sentence under the definition of Stockholder
Registrable Shares; (iii) shares of Common Stock held by Chase Venture Capital
Associates, L.P. on the date hereof and (iv) any other shares of Common Stock
issued in respect of the shares described in the preceding clauses (i), (ii)
and (iii) (because of stock-splits, stock dividends, reclassifications,
recapitalizations, or similar events); provided, however, that shares of Common
Stock shall cease to be Other Registrable Shares (i) upon any sale pursuant to
a Registration Statement or Rule 144 under the Securities Act or (ii) with
respect to shares which would be Stockholder Registrable Shares but for the
second to last sentence under the definition of Stockholder Registrable Shares,
upon any sale or transfer in any manner to a person or entity which, by virtue
of Section 13 of this Agreement, is not entitled to the rights provided by this
Agreement.
"Registrable Shares" means at any time Stockholder
Registrable Shares and Other Registrable Shares.
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"Registration Expenses" means the expenses described
in Section 5.
"Registration Statement" means a registration
statement filed by the Company with the Commission for a public offering and
sale of securities of the Company (other than a registration statement on Form
S-8 or Form S-4, or their successors, or any other form for a limited purpose,
or any registration statement covering only securities proposed to be issued in
exchange for securities or assets of another corporation).
"Securities Act" means the Securities Act of 1933, as
amended, or any successor Federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"Shares" means the shares of Series A Convertible
Preferred Stock, par value $.01 per share, as more fully defined in Section 2.1
of the Securities Purchase Agreement dated as of September 23, 1997 by and
among the Company and the Stockholders.
"Stockholder Priority" shall mean at any time
$11,800,000 less any net proceeds received by or payable to the holders of the
Stockholder Registrable Shares sales of Registrable Shares or their respective
predecessors in interest pursuant to (i) sales of Registrable Shares (other
than Other Registrable Shares) pursuant to any prior required registration
pursuant to Section 2 hereof or incidental registration pursuant to Section 3
hereof, (ii) sales of Registrable Shares (other than Other Registrable Shares)
pursuant to Rule 144 under the Securities Act, (iii) sales of Registrable
Shares to an unaffiliated party, or (iv) any event which is treated as a
liquidation of the Company (or any successor) pursuant to the terms of the
Certificate of Designations for the Shares.
"Stockholder Registrable Shares" means (i) the shares
of Common Stock issued or issuable upon conversion or exchange of the Shares,
(ii) the shares of Common Stock issued or issuable upon the exercise of the
Warrants to purchase 181,538 shares of Common Stock (the "Warrant Shares")
issued to the Stockholders on September 23, 1997 (the "Warrants") and (iii) any
other shares of Common Stock issued in respect of the securities described in
the preceding clauses (i) and (ii) (because of stock splits, stock dividends,
reclassifications, recapitalizations, or similar events); provided, however,
that shares of Common Stock which are Stockholder Registrable Shares shall
cease to be Stockholder Registrable Shares upon (i) any sale pursuant to a
Registration Statement or Rule 144 under the Securities Act, or (ii) upon any
sale in any manner to a person or entity which, by virtue of Section 13 of this
Agreement, is not entitled to the rights provided by this Agreement.
Notwithstanding the foregoing, on and after the time that the Stockholder
Priority is reduced to zero, all securities which are Stockholder Registrable
Shares shall cease to
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be Stockholder Registrable Shares and shall thereafter be included in the
definition of Other Registrable Shares. Wherever reference is made in this
Agreement to a request or consent of holders of a certain percentage of
Stockholder Registrable Shares, the determination of such percentage shall
include shares of Common Stock issuable upon conversion of the Shares and upon
exercise of the Warrants even if such conversion has not been effected or such
exercise has not been made.
"Stockholders" means the Stockholders and any persons
or entities to whom the rights granted under this Agreement are transferred by
any Stockholder, their successors or assigns pursuant to Section 13 hereof.
2. Required Registrations.
(a) At any time after October 1, 1998, a Stockholder or
Stockholders holding in the aggregate at least 51% of the Stockholder
Registrable Shares (determined without regard to the second to last sentence
under the definition of Stockholder Registrable Shares) may request, in
writing, that the Company effect the registration on Form S-1 or Form S-2 (or
any successor form) of Registrable Shares owned by such Stockholder or
Stockholders with an aggregate value of at least $5,000,000; provided, however,
that no Stockholder or Stockholders shall have the right to request a
registration pursuant to this Section 2(a) at any time the Company is eligible
to file a Registration Statement on Form S-3 (or any successor form) or any
other Form applicable to secondary offerings.
(b) At any time after the Company becomes eligible to
file a Registration Statement on Form S-3 (or any successor form relating to
secondary offerings), a Stockholder or Stockholders holding in the aggregate at
least 51% of the Stockholder Registrable Shares (determined without regard to
the second to last sentence under the definition of Stockholder Registrable
Shares) may request the Company, in writing, to effect the registration on Form
S-3 (or such successor form), of Registrable Shares held by such holders with
an aggregate value of at least $1,000,000.
(c) In the case of a registration requested pursuant to
this Section 2, if the holders initiating the registration intend to distribute
the Registrable Shares by means of an underwriting, they shall so advise the
Company in their request. In the event such registration is underwritten, the
right of other Stockholders to participate shall be conditioned on such
Stockholders' participation in such underwriting.
(d) Upon receipt of any request for registration pursuant
to this Section 2, the Company shall promptly give written notice of such
proposed registration to all Stockholders. Such Stockholders shall have the
right, by giving written notice to the Company within 30 days after the Company
provides its notice, to elect to have included in such registration such of
their Registrable Shares as such
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Stockholders may request in such notice of election, subject in the case of an
underwriting to the approval of the underwriter managing the offering as
provided in Section 2(e) below and to the priorities set forth in Section 2(g)
below. Thereupon, the Company shall, as expeditiously as possible, use its
best efforts to effect the registration on Form S-1 or Form S-2 (or any
successor forms) in the case of a registration requested pursuant to Section
2(a) above, or on Form S-3 (or such successor form), in the case of a
registration requested pursuant to Section 2(b) above, of all Registrable
Shares which the Company has been requested to register.
(e) Notwithstanding any other provision of this Section
2, if the managing underwriter advises the Stockholders initiating a
registration pursuant to Section 2(c) in writing that marketing factors require
a limitation of the number of shares to be underwritten, then the Stockholders
initiating the registration shall so advise all other Stockholders holding
Registrable Shares which would otherwise be included in the underwriting and
the number of Registrable Shares that may be included in the underwriting shall
be allocated among all such Stockholders, including the Stockholders initiating
the registration, in proportion (as nearly as practicable) to the number of
Registrable Shares of the Company owned by each such Stockholder. If the
managing underwriter does not limit the number of Registrable Shares to be
underwritten subject to Section 2(g) below, the Company and other holders of
securities of the Company who have registration rights similar to those set
forth herein may include Common Stock for their respective accounts in such
registration if the managing underwriter states that such inclusion would not
adversely affect the offering of Registrable Shares for any reason and if the
number of Registrable Shares held by the Stockholders which would otherwise
have been included in such registration and underwriting will not thereby be
limited or reduced.
(f) The Company shall not be required to effect more than
one registration pursuant to Section 2(a) above ("Demand Registration
Statement") but may be required to effect Demand Registration Statements
pursuant to Section 2(b) above without limitation other than as set forth in
Section 2(b). In addition, the Company shall not be required to effect more
than one registration pursuant to this Section 2 during any six month period.
For purposes of this Section 2(f), a Registration Statement shall not be
counted as a Demand Registration Statement until such time as such Registration
Statement has been declared effective by the Commission and has remained
effective for 120 days, or if sooner, until all the Registrable Shares
registered thereunder have been sold.
(g) The Company will include Common Stock in an
underwritten Demand Registration Statement required pursuant to Sections 2(a)
or 2(b) above as follows:
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(i) First, among the holders of Stockholders who
have requested to be included in such
registration pursuant to Section 2 hereof,
pro rata based upon the number of Registrable
Shares owned by each Stockholder.
(ii) Second, pro rata among the other persons or
entities holding Other Registrable Shares.
3. Incidental Registration.
(a) Whenever the Company proposes to file a Registration
Statement (other than pursuant to Section 2) at any time and from time to time,
it will, prior to such filing, give written notice to all Stockholders of its
intention to do so and, upon the written request of a Stockholder or
Stockholders given within 30 days after the Company provides such notice (which
request shall state the intended method of disposition of such Registrable
Shares), the Company shall use its best efforts to cause all Registrable Shares
which the Company has been requested by such Stockholder or Stockholders to
register to be registered under the Securities Act to the extent necessary to
permit their sale or other disposition in accordance with the intended methods
of distribution specified in the request of such Stockholder or Stockholders;
provided that the Company shall have the right to postpone or withdraw any
registration effected pursuant to this Section 3 without obligation to any
Stockholder.
(b) In connection with any offering under this Section 3
involving an underwriting, the Company shall not be required to include any
Registrable Shares in such underwriting unless the holders thereof accept the
terms of the underwriting as agreed upon between the Company and/or the holders
of shares of Common Stock or other securities of the Company who have
registration rights similar to those set forth in Section 2 hereof and who have
initiated or are participating in the offering pursuant to such rights (the
"Initiating Rightsholders") and the underwriters selected by it, and then only
in such quantity as will not, in the opinion of the underwriters, jeopardize
the success of the offering of securities proposed to be offered and sold by
the Company. If in the opinion of the managing underwriter the registration of
all, or part of, the Registrable Shares which the Stockholders have requested
to be included would materially and adversely affect such offering, then the
Company shall be required to include in the underwriting only that number of
Registrable Shares (as determined in accordance with the next sentence), if
any, which the managing underwriter believes may be sold without causing such
adverse effect. If the number of Registrable Shares to be included in the
underwriting in accordance with the foregoing is less than the total number of
shares which the holders of Registrable Shares have requested to be included,
then (i) the Stockholders who have requested registrations shall first be
entitled to include all shares that they have requested to be included to the
extent necessary to reduce the Stockholder Priority to
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zero, (ii) the party or parties initiating the registration (i.e., the Company
or the Initiating Shareholders) shall then be entitled to include all shares
that they have requested to be registered and (iii) the Stockholders who have
requested registration and other holders of shares of Common Stock or other
securities of the Company entitled to include shares of Common Stock in such
registration on a parity with the Stockholders (other than the Shareholders who
shall be entitled to include the total number of shares they have requested as
provided in clause (i) and the Initiating Stockholders with respect to the
shares included as provided in clause (ii)) shall participate in the
underwriting pro rata based upon their total ownership of shares of Common
Stock of the Company.
4. Registration Procedures. If and whenever the Company is
required by the provisions of this Agreement to use its best efforts to effect
the registration of any of the Registrable Shares under the Securities Act, the
Company shall:
(a) file with the Commission a Registration Statement
with respect to such Registrable Shares and use its best efforts to cause that
Registration Statement to become and remain effective for 120 days from the
effective date or such lesser period until all such Shares are sold;
(b) as expeditiously as possible prepare and file with
the Commission any amendments and supplements to the Registration Statement and
the prospectus included in the Registration Statement as may be necessary to
keep the Registration Statement effective for 120 days from the effective date
or such lesser period until all the Registrable Shares are sold;
(c) as expeditiously as possible furnish to each selling
Stockholder such reasonable numbers of copies of the prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as the selling Stockholder may reasonably request
in order to facilitate the public sale or other disposition of the Registrable
Shares owned by the selling Stockholder;
(d) as expeditiously as possible use its best efforts to
register or qualify the Registrable Shares covered by the Registration
Statement under the securities or Blue Sky laws of such states as the selling
Stockholders shall reasonably request, and do any and all other acts and things
that may be necessary or desirable to enable the selling Stockholders to
consummate the public sale or other disposition in such states of the
Registrable Shares owned by the selling Stockholder; provided, however, that
the Company shall not be required in connection with this paragraph (d) to
qualify as a foreign corporation or execute a general consent to service of
process in any jurisdiction;
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(e) as expeditiously as possible, cause all such
Registrable Shares to be listed on each securities exchange or quotation system
on which similar securities issued by the Corporation are then listed;
(f) promptly provide a transfer agent and registrar for
all such Registrable Shares not later than the effective date of such
registration statement;
(g) promptly make available for inspection by the sellers
of such Registrable Shares, any managing underwriter participating in any
disposition pursuant to such registration statement, and any attorney or
accountant or other agent retained by any such underwriter or selected by the
sellers of Registrable Shares, all financial and other records, pertinent
corporate documents and properties of the Company and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(h) as expeditiously as possible, notify each seller of
such Registrable Shares, promptly after it shall receive notice thereof, of the
time when such registration statement has become effective or a supplement to
any prospectus forming a part of such registration statement has been filed;
and
(i) as expeditiously as possible, notify each seller of
such Registrable Shares of any request by the Commission for the amending or
supplementing of such registration statement or prospectus or for additional
information.
If the Company has delivered preliminary or final prospectuses to the
selling Stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling Stockholders and, if requested, the selling Stockholders
shall immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide the selling
Stockholders with revised prospectuses and, following receipt of the revised
prospectuses, the selling Stockholders shall be free to resume making offers of
the Registrable Shares.
5. Allocation of Expenses. The Company will pay all Registration
Expenses for all registrations under Sections 2(a) and 2(b), and all
registrations under Section 3 of this Agreement; provided, however, that if a
registration is withdrawn at the request of the Stockholders requesting such
registration (other than as a result of information concerning the business or
financial condition of the Company which is made known to the Stockholders
after the date on which such registration was requested, which withdrawal is
made within 10 days after such information is made known to the Stockholders)
and if the requesting Stockholders elect not to have such registration counted
as a registration requested under, as the case may be,
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Sections 2(a) or 2(b), the requesting Stockholders shall pay the Registration
Expenses of such registration pro rata in accordance with the number of their
Registrable Shares included in such registration. Such expenses shall be borne
by the Stockholders on a pro rata basis, based on the number of Registrable
Shares included in such registration by each such Stockholder. For purposes of
this Section, the term "Registration Expenses" shall mean all expenses incurred
by the Company in complying with this Agreement including, without limitation,
all registration and filing fees, exchange listing fees, printing expenses,
fees and disbursements of counsel for the Company, state Blue Sky fees and
expenses, and the expense of any special audits incident to or required by any
such registration, but excluding underwriting discounts, selling commissions
and the fees and expenses of selling Stockholders' own counsel.
6. Indemnification and Contribution. In the event of any
registration of any of the Registrable Shares under the Securities Act pursuant
to this Agreement, the Company will indemnify and hold harmless the seller of
such Registrable Shares, each underwriter of such Registrable Shares, and each
other person, if any, who controls such seller or underwriter within the
meaning of the Securities Act or the Exchange Act against any losses, claims,
damages or liabilities, joint or several, to which such seller, underwriter or
controlling person may become subject under the Securities Act, the Exchange
Act, state securities or Blue Sky laws or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement under which such Registrable
Shares were registered under the Securities Act, any preliminary prospectus or
final prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arise out of or are based upon
the omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Company will reimburse such seller, underwriter and each such controlling
person for any legal or any other expenses reasonably incurred by such seller,
underwriter or controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or omission made in such Registration Statement, preliminary prospectus or
prospectus, or any such amendment or supplement, in reliance upon and in
conformity with information furnished to the Company, in writing, by or on
behalf of such seller, underwriter or controlling person specifically for use
in the preparation thereof.
In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, each seller of Registrable
Shares, severally and not jointly, will indemnify and hold harmless the
Company, each of its directors and officers and each underwriter (if any) and
each person, if any, who controls the
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Company or any such underwriter within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company, such directors and officers, underwriter or
controlling person may become subject under the Securities Act, Exchange Act,
state securities or Blue Sky laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement under which such Registrable Shares
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, if the
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of such seller,
specifically for use in connection with the preparation of such Registration
Statement, prospectus, amendment or supplement; provided, however, that the
obligations of a Stockholder hereunder shall be limited to an amount equal to
the proceeds to such Stockholder of Registrable Shares sold as contemplated
herein.
Each party entitled to indemnification under this Section 6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting therefrom; provided, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld); and, provided, further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement except to the extent
that the Indemnifying Party is adversely affected by such failure. The
Indemnified Party may participate in such defense at such party's expense;
provided, however, that the Indemnifying Party shall pay such expense 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 the Indemnified Party and any other party represented by such
counsel in such proceeding; provided further that in no event shall the
Indemnifying Party be required to pay the expenses of more than one law firm
per jurisdiction as counsel for the Indemnified Party. The Indemnifying Party
also shall be responsible for the expenses of such defense if the Indemnifying
Party does not elect to assume such defense. No Indemnifying Party, in the
defense of any such claim or litigation shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party
shall consent to entry of any judgment or settle
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such claim or litigation without the prior written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld.
In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 6 is
due in accordance with its terms but for any reason is held to be unavailable
to an Indemnified Party in respect to any losses, claims, damages and
liabilities referred to herein, then the Indemnifying Party shall, in lieu of
indemnifying such Indemnified Party, contribute to the amount paid or payable
by such Indemnified Party as a result of such losses, claims, damages or
liabilities to which such party may be subject in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and
the Stockholders on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative fault of the Company and
the Stockholders shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of material fact related to
information supplied by the Company or the Stockholders and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Stockholders agree
that it would not be just and equitable if contribution pursuant to this
Section 6 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph of Section 6, in no
case shall any one Stockholder be liable or responsible for any amount in
excess of the net proceeds received by such Stockholder from the offering of
Registrable Shares; provided, however, that 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. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section, notify such party
or parties from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not relieve
such party from any other obligation it or they may have thereunder or
otherwise under this Section. No party shall be liable for contribution with
respect to any action, suit, proceeding or claim settled without its written
consent.
7. Indemnification with Respect to Underwritten Offering. In the
event that Registrable Shares are sold pursuant to a Registration Statement in
an underwritten offering pursuant to Section 2(c), the Company agrees to (a)
enter into an underwriting agreement containing customary representations and
warranties with respect to the business and operations of an issuer of the
securities being registered and customary covenants and agreements to be
performed by such issuer, including without limitation customary provisions
with respect to indemnification by
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the Company of the underwriters of such offering; (b) engage reputable legal
counsel to render customary opinions and advice with respect to the
Registration Statement and (c) engage a nationally recognized public accounting
firm to issue customary "cold comfort letters" and advice with respect to the
Registration Statement.
8. Information by Holder. Each holder of Registrable Shares
included in any registration shall furnish to the Company such information
regarding such holder and the distribution proposed by such holder as the
Company may reasonably request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Agreement. In addition, each person that is, becomes or was a Stockholder
at any time under this Agreement, shall promptly furnish to the Company upon
request, information relating to such Stockholder's and it's affiliates
holdings of Company securities, including, without limitation, the number of
shares owned by such Stockholder and its affiliates, the date of such holdings,
the date and number of shares transferred or sold at any time and the name of
the transferee, and the purchase price (or net consideration, if applicable)
received by such Stockholder upon the transfer of any Company security.
9. Limitations on Registration Rights.
(a) Notwithstanding the provisions of Section 2, the
Company may by written notice to the Stockholders (x) delay filing a Demand
Registration Statement requested by a Stockholder (a "Delayed Demand
Registration Statement") or (y) require that the Stockholders immediately cease
sales of shares under any effective Registration Statement ("Suspended
Registration Statement"), in any period during which the Company is engaged in
(i) a registered public offering of the Company, or (ii) any activity or
transaction or preparations or negotiations for any activity or transaction
("Company Activity") that the Company desires to keep confidential for business
reasons, if the Company determines in good faith that the public disclosure
requirements imposed on the Company under the Securities Act in connection with
any such Registration Statement would require disclosure of the Company
Activity; provided, that, (i) in the aggregate, all such delays of filing
Delayed Demand Registration Statements and/or cessations of sales under
Suspended Registration Statements shall not exceed 150 days in any 12-month
period and (ii) the Company shall cause any suspended Registration Statement to
remain effective for one additional day for each day, or any portion of a day,
that the Stockholders were required to cease sales of shares thereunder.
(b) If the Company requires the Stockholders to cease
sales of shares pursuant to Section 9(a) above, the Company shall, as promptly
as practicable following the termination of the circumstance which entitled the
Company to do so, give written notice to the Stockholders that such
circumstance has terminated and that they may resume sales pursuant to the
Suspended Registration Statement. If the prospectus included in such Suspended
Registration Statement has been amended to
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comply with the requirements of the Securities Act, the Company shall enclose
such revised prospectus with the notice to Stockholders given pursuant to this
Section 9(b), and the Stockholders shall make no offers or sales of shares
pursuant to such Suspended Registration Statement other than by means of such
revised prospectus.
10. "Stand-Off" Agreement. Each Stockholder, if requested by the
Company and an underwriter of Common Stock or other securities of the Company,
shall agree not to sell or otherwise transfer or dispose of any Registrable
Shares or other securities of the Company held by such Stockholder (except
shares permitted to be sold pursuant to Section 2 or 3 of this Agreement) for a
specified period of time (not to exceed 90 days) following the effective date
of a Registration Statement pursuant to which such Stockholder or an affiliate
thereof has registered shares ("Stand-Off Agreement"). The Company may impose
stop-transfer instructions with respect to the Registrable Shares or other
securities subject to the foregoing restriction until the end of the stand-off
period. Nothing in this Section 10 shall prohibit transfers to affiliates
pursuant to Section 13 hereof.
11. Rule 144 Requirements. The Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act;
(b) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) furnish to any holder of Registrable Shares upon
request a written statement by the Company as to its compliance with the
reporting requirements of said 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 of the Company as such holder may
reasonably request to avail itself of any similar rule or regulation of the
Commission allowing it to sell any such securities without registration.
12. Mergers, Etc. The Company shall not, directly or indirectly,
enter into any merger, consolidation or reorganization in which the Company
shall not be the surviving corporation unless the proposed surviving
corporation shall, prior to such merger, consolidation or reorganization, agree
in writing to assume the obligations of the Company under this Agreement, and
for that purpose references hereunder to "Registrable Shares" shall be deemed
to be references to the securities which the Stockholders would be entitled to
receive in exchange for Registrable Shares under any such merger, consolidation
or reorganization; provided, however, that the provisions of this Section 12
shall not apply in the event of any merger, consolidation or reorganization in
which the Company is not the surviving corporation if all
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Stockholders are entitled to receive in exchange for their Registrable Shares
consideration consisting solely of (i) cash, (ii) securities of the acquiring
corporation which may be immediately sold to the public without registration
under the Securities Act, or (iii) securities of the acquiring corporation
which the acquiring corporation has agreed to register within 90 days of
completion of the transaction for resale to the public pursuant to the
Securities Act.
13. Transfers of Certain Rights.
(a) This Agreement, and the rights and obligations of
each Stockholder hereunder, may be assigned by such Stockholder to another
Stockholder, to any affiliate of such Stockholder or to any person or entity
acquiring at least 300,000 Stockholder Registrable Shares (determined without
regard to the second to last sentence under the definition of the Stockholder
Registrable Shares) (such number being subject to adjustment for any stock
dividend, stock split, subdivision, combination or other recapitalization of
the Common Stock of the Company); provided, however, that the transferee
provides written notice of such assignment to the Company stating its name and
address and identifying the securities with respect to which such rights are
being assigned; and provided further, that the Company receives the written
instrument provided in subparagraph (b) below. Any transferee to whom a
transfer is made in accordance with the immediately preceding sentence shall be
deemed a Stockholder for purposes of this Agreement.
(b) Any transferee (other than a Stockholder) to whom
rights hereunder are transferred shall, as a condition to such transfer,
deliver to the Company a written instrument by which such transferee agrees to
be bound by the obligations imposed upon Stockholders under this Agreement to
the same extent as if such transferee were a party thereto.
(c) A transferee to whom rights are transferred pursuant
to this Section 13 may not again transfer such rights to any other person or
entity, other than as provided in this Section 13.
14. General.
(a) Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be delivered
by hand, sent by a reputable overnight business courier or mailed by first
class certified or registered mail, return receipt requested, postage prepaid:
If to the Company, at Nine ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: President, or at such other address or addresses as may have
been furnished in writing by the Company to the Stockholders, with a copy to
▇▇▇▇ and
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▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
Carp, Esq.
If to the Stockholders, to their respective addresses set forth on
Schedule I hereto, or at such other address or addresses as may have been
furnished to the Company in writing by such Stockholders, with a copy to
▇'▇▇▇▇▇▇▇▇, Graev & Karabell, LLP, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Esq.
Notices provided in accordance with this Section 14(a) shall be deemed
delivered (i) upon personal delivery if notice is hand delivered, (ii) on the
next business day if the notice is given by a reputable overnight business
courier and (iii) three business days after deposit in the United States mail
if sent by United States mail return receipt requested.
(b) Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter.
(c) No Third Party Beneficiary. This Agreement shall not
confer any rights or remedies on any person or entity other than the Company
and the Stockholders.
(d) Amendments and Waivers. Any term of this Agreement
may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the Stockholders
holding a majority of the Stockholder Registrable Shares (determined without
regard to the second to last sentence under the definition of Stockholder
Registrable Shares) held by all of the Stockholders; provided, that this
Agreement may be amended with the consent of the holders of less than all
Stockholder Registrable Shares only in a manner which affects all Stockholder
Registrable Shares in the same fashion. No waivers of or exceptions to any
term, condition or provision of this Agreement, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such term, condition or provision.
(e) Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original, but all
of which shall be one and the same document.
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15
(f) Severability. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
(g) Governing Law: This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, this Agreement has been executed on the day and
year first above written by the parties listed below:
DIATIDE, INC.
By:
---------------------------
Name:
Title:
CHASE VENTURE CAPITAL
ASSOCIATES, L.P.
By: Chase Capital Partners,
its General Partner
By:
---------------------------
Name:
Title:
MEDSOURCE S.A.
By:
---------------------------
Name:
Title:
NEOMED FUND LIMITED
By:
---------------------------
Name:
Title:
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SCHEDULE I
Investors
Chase Venture Capital Associates, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
Medsource S.A.
▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Neomed Fund Limited
c/o Bank of Bermuda Limited
Bank of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
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