Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") sets forth the
registration rights granted by Trimeris Inc. (the "Company") to the Lender under
the Financing Agreement dated as of July 9, 1999 by and between the Company and
Roche Finance Ltd (the "Financing Agreement"). Capitalized terms defined in the
Financing Agreement and used herein without definition have the same meanings
herein as in the Financing Agreement.
In consideration of the agreements of the Lender contained in the
Financing Agreement, the Company hereby grants to the Lender the rights set
forth herein:
Section 1. Definitions. For purposes of this Agreement:
a. "Commencement Date" means the first Closing under the Financing
Agreement.
b. "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute.
c. "Investors" means (i) the Lender, (ii) any affiliate of the
Lender or its successor and (iii) any person or entity to whom the Lender or any
person or entity identified in clause (ii) of this Section 1(c) sells, transfers
or assigns any of its Registrable Securities, other than in a sale pursuant to
Rule 144 under the Securities Act or a registration effected pursuant to this
Agreement.
d. "Register," "registered," and "registration" refer to an
underwritten registration effected by preparing and filing with the Securities
and Exchange Commission (the "Commission") a registration statement or similar
document in compliance with the Securities Act, and the declaration or ordering
by the Commission of effectiveness of such registration statement or document.
e. "Registration Expenses" means all expenses in connection with
the Company's performance of or compliance with its obligations under this
Agreement, including, without limitation, all (i) registration, qualification
and filing fees; (ii) fees, costs and expenses of compliance with securities or
blue sky laws (including reasonable fees, expenses and disbursements of counsel
for the underwriters in connection with blue sky qualifications of the
Registrable Securities under the laws of such jurisdictions as the managing
underwriter or underwriters in a registration may designate, subject to the
limitation as set forth in subsection (h) of Section 5 hereof); (iii) printing
expenses; (iv) messenger, telephone and delivery expenses; (v) fees, expenses
and disbursements of counsel for the Company and of all independent certified
public accountants retained by
the Company (including the expenses of any special audit and "cold comfort"
letters required by or incident to such performance); (vi) Securities Act
liability insurance if the Company so desires; (vii) fees, expenses and
disbursements of any other individuals or entities retained by the Company in
connection with the registration of the Registrable Securities; (viii) fees,
costs and expenses incurred by the Company in connection with the listing of the
Registrable Securities on each national securities exchange or automated
quotation system on which the Company has made application for the listing of
its Common Stock; and (ix) internal expenses of the Company (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties and expenses of any annual audit). Registration
Expenses shall not include selling commissions, discounts or other compensation
paid to underwriters or other agents or brokers to effect the sale of
Registrable Securities, counsel fees or any other expenses incurred by Investors
in connection with any registration that are not specified in the immediately
preceding sentence.
f. "Registrable Securities" means (i) shares of Common Stock
issued upon conversion of any Notes issued pursuant to the Financing Agreement
or upon exercise or conversion of any Warrants issued pursuant to the Financing
Agreement, or (ii) shares of Common Stock or other securities of the Company
issued as a dividend or other distribution on or in exchange for any of the
shares of Common Stock specified in clause (i).
g. "Requestor" means the Investor requesting the registration in
question.
h. "Securities Act" means the Securities Act of 1933, as amended,
or any successor statute.
Section 2. Demand Registration
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a. Request for Registration. If at any time after the Commencement
Date an Investor submits a written request (a "Demand Notice") to the Company
that the Company register Registrable Securities under and in accordance with
the Securities Act (a "Demand Registration"), then the Company shall:
(i) within 5 days after receipt of such Demand Notice, give
written notice of the proposed registration to all other Investors; and
(ii) as soon as practicable, use diligent efforts to effect such
registration as may be so requested and as would permit or facilitate the sale
and distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any Investors joining in such request as are specified in written
requests received by the Company within 20 days after the date the Company mails
the written notice referred to in clause (i) above.
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Notwithstanding the foregoing, if the Company shall furnish to the
Investors a certificate signed by the president of the Company stating that in
the good faith judgment of the board of directors of the Company, it would be
detrimental to the Company or its stockholders for a registration statement to
be filed on or before the date filing would be required in connection with any
Demand Registration and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer such filing or
delay its effectiveness for a reasonable period not to exceed 90 days provided
that such right shall not be exercised more than once with respect to a
particular request for registration hereunder. The Company will pay all
Registration Expenses in connection with such withdrawn request for
registration.
Any rights to a Demand Registration may be exercised not more than
four times and each such Demand Registration must relate to a number of
Registrable Securities greater than or equal to the lesser of (i) 75,000
Registrable Securities (subject to appropriate adjustment for stock dividends,
stock splits and other recapitalization transactions), (ii) a number of
Registrable Securities for which the anticipated offering price at the time of
such exercise exceeds $5 million, and (iii) the number of Registrable Securities
then held by the Holder (including Registrable Securities that may be acquired
by the Holder upon the exercise or conversion of any other securities then held
by the Holder.
b. Underwriting. In connection with any registration under this
Section 2, if so requested by the Requestor, the Company shall enter into an
underwriting agreement with one or more underwriters selected by the Requestor
having terms and conditions customary for such agreements.
Section 3. Company Registration.
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a. Notice of Registration. If at any time or from time to time, the
Company shall determine to register any of its Common Stock, whether or not for
its own account, other than a registration relating to employee benefit plans or
a registration effected on Form S-4, the Company shall:
(i) provide to each Investor written notice thereof at least ten
days prior to the filing of the registration statement by the Company in
connection with such registration; and
(ii) include in such registration, and in any underwriting involved
therein, all those Registrable Securities specified in a written request by each
Investor received by the Company within five days after the Company mails the
written notice referred to above, subject to the provisions of Section 3(b)
below.
b. Underwriting. The right of any Investor to registration pursuant
to this Section 3 shall be conditioned upon the participation by such Investor
in the underwriting
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arrangements specified by the Company in connection with such registration and
the inclusion of the Registrable Securities of such Investor in such
underwriting to the extent provided herein. All Investors proposing to
distribute their Registrable Securities through such underwriting shall
(together with the Company) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by the Company
and take all other actions, and deliver such opinions and certifications, as may
be reasonably requested by such managing underwriter. Notwithstanding any other
provision of this Section 3, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the number of Registrable
Securities to be included in such registration. The Company shall so advise all
Investors distributing Registrable Securities through such underwriting, and
there shall be excluded from such registration and underwriting, to the extent
necessary to satisfy such limitation, first shares held by the Investors and,
thereafter, to the extent necessary, shares which the Company wishes to register
for its own account. As among the Investors as a group, the number of
Registrable Securities that may be included in the registration and underwriting
shall be allocated in proportion, as nearly as practicable, to the respective
amounts of Registrable Securities required to be included (determined without
regard to any requirement of a request to be included in such registration) in
such registration held by all Investors at the time of filing the registration
statement. To facilitate the allocation of shares in accordance with the above
provisions, the Company may round the number of shares allocated to any Investor
to the nearest 100 shares.
c. Right to Terminate Registration. The Company shall have the right
to terminate or withdraw any registration initiated by the Company under this
Section 3 prior to the effectiveness of such registration whether or not any
Investor has elected to include Registrable Securities in such registration.
Section 4. Expense of Registration. All Registration Expenses incurred in
connection with the registration and other obligations of the Company pursuant
to Sections 2, 3 and 5 shall be borne by Company.
Section 5. Registration Procedures. If and whenever the Company is required
by the provisions of this Agreement to effect the registration of Registrable
Securities, the Company shall:
a. promptly prepare and file with the Commission a registration
statement with respect to such Registrable Securities on any form that may be
utilized by the Company and that shall permit the disposition of the Registrable
Securities in accordance with the intended method or methods of disposition
thereof, and use its reasonable diligent efforts to cause such registration
statement to become effective as promptly as practicable and remain effective
thereafter as provided herein, provided that prior to filing a registration
statement or prospectus or any amendments or supplements thereto, including
documents incorporated by reference after the initial filing of any registration
statement, the Company will furnish to each of the Investors whose Registrable
Securities are covered by such registration statement, their counsel and the
underwriters copies of all such documents proposed to be filed sufficiently in
advance of filing to provide them with a reasonable opportunity to review such
documents and
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comment thereon;
b. prepare and file with the Commission such amendments (including
post-effective amendments) and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and current and to comply with the provisions
of the Securities Act with respect to the sale or other disposition of all
Registrable Securities covered by such registration statement, including such
amendments (including post-effective amendments) and supplements as may be
necessary to reflect the intended method of disposition by the prospective
seller or sellers of such Registrable Securities, but for no longer than 120
days subsequent to the effective date of such registration statement;
c. provide customary indemnity and contribution arrangements to any
qualified independent underwriter or qualified independent pricer as defined in
Schedule E of the Bylaws of the National Association of Securities Dealers, Inc.
(a "Qualified Independent Underwriter/Pricer"), if requested by such Qualified
Independent Underwriter/Pricer, on such reasonable terms as such Qualified
Independent Underwriter/Pricer customarily requires;
d. subject to receiving reasonable assurances of confidentiality,
for a reasonable period after the filing of such registration statement, and
throughout each period during which the Company is required to keep a
registration effective, make available for inspection by the selling holders of
Registrable Securities being offered, and any underwriters, and their respective
counsel, such financial and other information and books and records of the
Company, and cause the officers, directors, employees, counsel and independent
certified public accountants of the Company to respond to such inquiries as
shall be reasonably necessary, in the judgment of such counsel, to conduct a
reasonable investigation within the meaning of Section 11 of the Securities Act;
e. promptly notify the selling holders of Registrable Securities and
any underwriters and confirm such advice in writing, (i) when such registration
statement or the prospectus included therein or any prospectus amendment or
supplement or post-effective amendment has been filed, and, with respect to such
registration statement or any post-effective amendment, when the same has become
effective, (ii) of any comments by the Commission, by the National Association
of Securities Dealers Inc. ("NASD"), and by the blue sky or securities
commissioner or regulator of any state with respect thereto or any request by
any such entity for amendments or supplements to such registration statement or
prospectus or for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of such registration
statement or the initiation or threatening of any proceedings for that purpose,
(iv) if at any time the representations and warranties of the Company cease to
be true and correct in all material respects, (v) of the receipt by the Company
of any notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, or (vi) at any time when a
prospectus is required to be delivered under the Securities Act, that such
registration
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statement, prospectus, prospectus amendment or supplement or post-effective
amendment, or any document incorporated by reference in any of the foregoing,
contains an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading;
f. furnish to each selling holder of Registrable Securities being
offered, and any underwriters, prospectuses or amendments or supplements
thereto, in such quantities as they may reasonably request and as soon as
practicable, that update previous prospectuses or amendments or supplements
thereto;
g. in the case of a registration under Section 3 hereof, permit
selling holders of Registrable Securities to rely on any representations and
warranties made to any underwriter of the Company or any opinion of counsel or
"cold comfort" letter delivered to any such underwriter, and indemnify each such
holder to the same extent that it indemnifies any such underwriter;
h. use reasonable diligent efforts to (i) register or qualify the
Registrable Securities to be included in a registration statement hereunder
under such other securities laws or blue sky laws of such jurisdictions within
the United States of America as any selling holder of such Registrable
Securities or any underwriter of the securities being sold shall reasonably
request, (ii) keep such registrations or qualifications in effect for so long as
the registration statement remains in effect and (iii) take any and all such
actions as may be reasonably necessary or advisable to enable such holder or
underwriter to consummate the disposition in such jurisdictions of such
Registrable Securities owned by such holder; provided, however, that the Company
shall not be required for any such purpose to (x) qualify generally to do
business as a foreign corporation in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this Section 5(h),
(y) subject itself to taxation in any such jurisdiction or (z) consent to
general service of process in any such jurisdiction;
i. cause all such Registrable Securities to be listed or accepted
for quotation on each securities exchange or automated quotation system on which
the Company's Common Stock then trades; and
j. otherwise use reasonable diligent efforts to comply with all
applicable provisions of the Securities Act, and rules and regulations of the
Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering a period of at least twelve months
which shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder.
Section 6. Indemnification. In the event any of the Registrable Securities are
included in a registration statement under this Agreement:
a. the Company will indemnify each Investor who participates in such
registration, each of its officers and directors and partners and such
Investor's separate legal counsel and independent accountants, and each person
controlling such Investor
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within the meaning of Section 15 of the Securities Act, and each underwriter, if
any, and each person who controls any underwriter within the meaning of Section
15 of the Securities Act, against all expenses, claims, losses, damages or
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus, offering circular or
other document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, or any violation by the Company of any rule or
regulation promulgated under the Securities Act applicable to the Company in
connection with any such registration, qualification or compliance, and the
Company will reimburse each such Investor, each of its officers and directors
and partners and such Investor's separate legal counsel and independent
accountants and each person controlling such Investor, each such underwriter and
each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission, made in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Investor or underwriter and
stated to be specially for use therein.
b. Each Investor will, if Registrable Securities held by such
Investor are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers and its legal counsel and independent accountants,
each underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company or such underwriter
within the meaning of Section 15 of the Securities Act, and each other such
Investor, each of its officers and directors and each person controlling such
Investor within the meaning of Section 15 of the Securities Act, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statement therein not misleading, and will reimburse the Company, such
Investors, such directors, officers, persons, underwriters or control persons
for any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with information furnished to the Company by an
instrument duly executed by such Investor and stated to be specifically for use
therein.
c. Each party entitled to indemnification under this Section 6 (the
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"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 provided
that failure to give such prompt notice shall not relieve the Indemnifying Party
of its obligations hereunder unless it is materially prejudiced thereby, 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 unreasonably be
withheld). Such Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be that of such Indemnified Party unless
(i) the Indemnifying Party has agreed to pay such fees and expenses or (ii) the
Indemnifying Party shall have failed to assume the defense of such action or
proceeding and employ counsel reasonably satisfactory to such Indemnified Party
in any such action or proceeding or (iii) the named parties to any such action
or proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party and such Indemnified Party shall have been
advised by counsel that there may be one or more legal defenses available to
such Indemnified Party which are different from or additional to those available
to the Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing of an election to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense of such action or proceeding on behalf of such
Indemnified Party, it being understood, however, that the Indemnifying Party
then shall have the right to employ separate counsel at its own expense and to
participate in the defense thereof, and shall not, in connection with any one
such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all Indemnified
Parties, which firm shall be designated in writing by a majority of the
Indemnified Parties who are eligible to select such counsel). 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 to such claim or litigation. No Indemnified Party may
consent to entry of any judgment or enter into any settlement without the prior
written consent of the Indemnifying Party.
d. If the indemnification provided for in this Section 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 herein,
then the Indemnifying Party, in lieu of indemnifying the Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party with
respect to such loss, liability, claim, damage or expenses in the proportion
that is appropriate to reflect the relative fault of the Indemnifying Party and
the Indemnified Party in connection with the statements or 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 the Indemnified Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of material fact or the
omission to state a material fact relates to
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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.
Section 7. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Registrable Securities to the public without registration, after
such time as a public market exists for the Common Stock and for so long as any
Note, Warrant or Registrable Securities are outstanding, the Company shall use
reasonably diligent efforts to:
a. make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, beginning 90 days
after the Company registers a class of securities under Section 12 of the
Exchange Act or completes a registered offering under the Securities Act;
b. 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
(at any time after it has become subject to such reporting requirements);
c. furnish to any Investor promptly upon request a written statement
as to its compliance with the reporting requirements of Rule 144 (at any time
after 90 days after the Company completes a registered offering under the
Securities Act), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company and other information in the possession of or
reasonably obtainable by the Company as an Investor may reasonably request in
availing itself of any rule or regulation of the Commission allowing an Investor
to sell Registrable Securities without registration.
Section 8. Termination of Registration Rights. The Investor shall be entitled to
exercise all rights provided in this Agreement until (a) if the Holder is an
"affiliate" of the Company under Rule 144 of the Securities Act, until such time
as such Investor is permitted to sell all such Registerable Securities in a
single transaction under Rule 144 or (b) in all other cases, the second
anniversary of the last exercise of the Holder's conversion or exercise rights
under any Note or the Warrant (each as defined in the Purchase Agreement).
Section 9. Information To Be Provided by the Investors. Each Investor whose
Registrable Securities are included in any registration pursuant to this
Agreement shall furnish the Company such information regarding such Investor and
the distribution proposed by such Investor as may be reasonably requested in
writing by the Company and as shall be required in connection with such
registration or the registration or qualification of such securities under any
applicable state securities law.
Section 10. Agreements With Respect to Underwritten Offering. In the event
that Registrable Securities are sold pursuant to a registration statement in an
underwritten offering, the Company and each Investor participating in such sale
shall enter into an underwriting agreement with the lead underwriters for such
offering containing customary
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representations, warranties and covenants.
Section 11. Miscellaneous.
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a. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to depart from the provisions hereof may
not be given unless the Company has obtained the written consent of the
Majority-In-Interest. Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof with respect to a matter which relates
exclusively to the rights of Investors whose Registrable Securities are being
sold pursuant to a registration statement and which does not directly or
indirectly affect the rights of other Investors may be given by the holders of a
majority of the Registrable Securities being sold by such holders.
b. Notices. All communications provided for hereunder shall be sent
by registered or certified mail, reputable overnight delivery service or
facsimile transmission. Communications to an Investor shall be sent to such
Investor at its address set forth in the Financing Agreement or, if the Investor
was not a Lender, in the security register or other records of the Company.
Communications to the Company shall be sent to the Company as provided in the
Financing Agreement.
c. Descriptive Headings. The descriptive headings of the several
Sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
d. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the State of New York as applied to agreements entered into and wholly performed
in New York, without giving effect to the choice of law or conflicts principles
thereof. In the event of any dispute arising out of the terms of this Agreement,
the parties hereby consent to the exclusive jurisdiction of the federal and
state courts located in the State of New York for resolution of such dispute,
and agree not to contest such exclusive jurisdiction or seek to transfer any
action relating to such dispute to any other jurisdiction.
e. Part of Financing Agreement. This Agreement is being executed as
a part of the Financing Agreement and is subject to all provisions thereof.
f. Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
g. Counterparts. This Agreement may be executed in any number of
counterparts, and a party's delivery of a signed counterpart by facsimile
transmission shall constitute that party's due execution of this Agreement.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date and year first written above.
TRIMERIS INC. ROCHE FINANCE LTD
By: /s/ Xxxx X. Xxxxxxxxx By: /s/ Xxxxx Xxxxx
Name: Xxxx X. Xxxxxxxxx Name: Xx. Xxxxx Xxxxx
Title: CEO Title: Director
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By: /s/ Xxxxx Matter
Name: Xxxxx Matter
Title: Director
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