Exhibit 10.2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the 6/th/ day of November, 1998, by
and between Novartis Pharma AG ("Novartis" or the "Investor"), a corporation
organized under the laws of Switzerland, with its principal place of business at
Xxxxxxxxxxxx 00, XX-0000, Xxxxx, Xxxxxxxxxxx and Medarex, Inc., (the "Company"),
a New Jersey corporation with its principal place of business at 0000 Xxxxx 00
Xxxx, Xxxxxxxxx, Xxx Xxxxxx, 00000, X.X.X.
THE PARTIES HEREBY AGREE AS FOLLOWS:
5. Purchase and Sale of Common Stock.
5.1 Sale of the Common Shares.
(a) Subject to the terms and conditions hereof, the Company will sell and
the Investor will purchase $2,000,000 of Common Stock at the First Closing
(defined in Section 2.1 hereof) and an additional $1,000,000 of Common Stock at
the Second Closing (defined in Section 2.2 hereof). The $2,000,000 of Common
Stock purchased at the First Closing is the "First Installment." The $1,000,000
of Common Stock purchased at the Second Closing is the "Second Installment."
The total number of shares of Common Stock purchased pursuant to this Agreement
are the "Shares." The parties agree that Novartis may assign the right and
obligation to purchase the Common Stock, and all of its other rights and
obligations under this Agreement, to an "Affiliate" as defined in the Evaluation
Research and Commercialization Agreement (the "License Agreement") between the
Company and the Investor of even date, a copy of which is attached hereto as
Exhibit A (the "License Agreement"), in which case the term "Investor" shall
refer herein to such Affiliate.
(b) The parties hereto acknowledge that under the terms of the License
Agreement, the "Evaluation" (as such term is defined in the License Agreement)
may be extended [*****].
5.2 Per Share Price First Closing. The purchase of Common Stock at the First
Closing shall be at a price per share ("First Closing Price Per Share") equal to
[*****]. In the event of any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the Company
prior to the First Closing which affects or relates to the Common Stock, the
number of Shares and the First Closing Price Per Share shall be adjusted
proportionately. Prior to the First Closing, the Company will have authorized
the sale and issuance of the Shares having the rights and privileges set forth
in the Company's Certificate of Incorporation (the "Certificate").
-----------
[*****] Represents confidential portion which has been omitted and filed
separately with the SEC. Confidential treatment has been requested with respect
to the omitted portions.
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5.3 Per Share Price Second Closing. The purchase of Common Stock at the Second
Closing shall be at a price per share ("Second Closing Price Per Share") equal
to [*****]. In the event of any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the Company
prior to the Second Closing which affects or relates to the Common Stock, the
number of Shares and the Second Closing Price per Share shall be adjusted
proportionately. Prior to the Second Closing, the Company will have authorized
the sale and issuance of the Shares having the rights and privileges set forth
in the Certificate.
6. Closing Dates; Delivery.
6.1 First Closing Date. The closing of the purchase and sale of the First
Installment hereunder shall be held on November 6, 1998, or at such other time
as the Company and the Investor shall agree (the "First Closing"). The date of
the First Closing is hereinafter referred to as the "First Closing Date."
6.2 Second Closing Date. The closing of the purchase and sale of the Second
Installment hereunder will take place on the first anniversary of execution of
the License Agreement. The date of the Second Closing is hereinafter referred
to as the "Second Closing Date." The First Closing and the Second Closing shall
be individually referred to as a "Closing" and collectively referred to as
"Closings."
6.3 Delivery. At each Closing, the Company will deliver to the Investor a
stock certificate, registered in the Investor's name, representing the Shares to
be purchased at such Closing, against payment of the purchase price due therefor
by wire transfer of same day funds per the Company's wiring instructions.
6.4 Further Assurances. The Company and the Investor hereby covenant and agree
without the necessity of any further consideration, to execute, acknowledge and
deliver any and all such other documents and take any such other action as may
be reasonably necessary to carry out the intent and purposes of this Agreement.
7. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investor as follows:
7.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New Jersey. The Company has all requisite corporate power and
corporate authority to own and operate its properties and assets, to carry on
its business as now conducted and as proposed to be conducted,
------------
[*****] Represents confidential portion which has been omitted and filed
separately with the SEC. Confidential treatment has been requested with
respect to the omitted portions.
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to enter into this Agreement, to sell the Shares and to carry out the other
transactions contemplated hereunder. The Company, and each of its subsidiaries,
is qualified to transact business and is in good standing in each jurisdiction
in which the failure to qualify would have, or could reasonably be expected to
have, a material adverse effect on the business, properties, financial condition
or results of operations of the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect"). The Company has delivered to the Investor true,
correct and complete copies of the Certificate and the Company's By-laws in
effect on the date hereof.
7.2 Capitalization and Voting Rights.
(a) The authorized capital of the Company as of the date hereof consists
of:
(i) 40,000,000 shares of common stock, par value $.01 per share
(ii) 2,000,000 shares of preferred stock, par value $1.00 per share
(b) Except as set forth in the Company's Annual Report on Form 10-K for
the year ended December 31, 1997 (the "10-K"), the Company's Quarterly Reports
on Form 10-Q (the "10-Qs") for the periods ended March 31, 1998, and June 30,
1998, and the Company's Current Reports on Form 8-K filed since June 30, 1998.
(collectively, the "Company's Public Filings") or in Schedule 3.2 of the
Schedule of Exceptions attached hereto as Exhibit B to this Agreement, there
are: (i) no outstanding options, warrants, rights (including conversion or
preemptive rights) or agreements pursuant to which the Company is or may become
obligated to issue, sell or repurchase any shares of its capital stock or any
other securities of the Company; (ii) no restrictions on the transfer of capital
stock of the Company imposed by the Certificate or By-laws of the Company, or
any agreement to which the Company is a party, any order of any court or any
governmental agency to which the Company is subject, or any statute other than
those imposed by relevant state and federal securities laws; (iii) no cumulative
voting rights for any of the Company's capital stock; (iv) no registration
rights under the Securities Act of 1933, as amended (the "Securities Act") with
respect to shares of the Company's capital stock; and (v) to the best of the
Company's knowledge and belief, no options or other rights to purchase shares of
capital stock from stockholders of the Company granted by such stockholders. The
Company has reserved up to 3,665,673 shares of its Common Stock for the issuance
of Common Stock pursuant to the exercise of outstanding options and warrants or
options to be granted in the future under its various stock option plans, as
fully disclosed in the Company's Public Filings.
(c) Except as set forth in the Company's Public Filings or in Schedule 3.2
of Exhibit B to this Agreement, the Company is not a party to or is not subject
to any agreement or understanding relating to, and to the Company's knowledge
there is no agreement or understanding between any persons and/or entities which
affects or relates to, the voting of shares of capital stock of the Company or
the giving of written consents by a shareholder or director of the Company.
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7.3 Subsidiaries. Except as set forth in the Company's Public Filings or in
Schedule 3.3 of Exhibit B to this Agreement, the Company has never owned and
does not presently own or control, directly or indirectly, any other
corporation, association, or other business entity and has never owned or
controlled and does not currently own or control, directly or indirectly, any
capital stock or other ownership interest, directly or indirectly, in any
corporation, association, partnership, trust, joint venture or other entity.
Each of the Company's subsidiaries is duly organized and existing under the laws
of its jurisdiction or organization and is in good standing under such laws.
None of the Company's subsidiaries owns or leases property or engages in any
activity in any jurisdiction that might require its qualification to do business
as a foreign corporation and in which failure to do so would have a Material
Adverse Effect.
7.4 Authorization. All corporate action on the part of the Company and its
stockholders necessary for the authorization, execution and delivery of this
Agreement, the performance of all obligations of the Company hereunder and the
authorization, issuance and delivery of the Shares to be sold hereunder, has
been taken or will be taken prior to the Closing. This Agreement has been duly
executed and delivered by the Company and constitutes a valid and legally
binding obligation of the Company, enforceable against the Company in accordance
with its terms (except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application relating to or affecting enforcement of creditors rights). The
execution, delivery and performance of this Agreement and compliance with the
provisions hereof by the Company, will not:
(a) violate any provision of law, statute, ordinance, rule or regulation or
any ruling, writ, injunction, order, judgment or decree of any court,
administrative agency or other governmental body, the violation of which would
have a Material Adverse Effect on the financial condition or business of the
Company;
(b) conflict with or result in any breach of any of the terms, conditions
or provisions of, or constitute (with due notice or lapse of time, or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under (i) any material agreement, document, instrument, contract, understanding,
arrangement, note, indenture, mortgage or lease to which the Company is a party
or under which the Company or any of its assets is bound or affected, (ii) the
Certificate, or (iii) the By-laws of the Company; or
(c) result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company.
7.5 Valid Issuance of Common Stock.
(a) When issued, sold and delivered in accordance with the terms hereof for
the consideration expressed herein, the Shares will be validly issued and
outstanding, fully paid and nonassessable and not subject to any preemptive
rights, rights of first refusal or other similar rights imposed by the Company.
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(b) The outstanding shares of Common Stock are all duly authorized and
validly issued, fully paid and nonassessable, and were issued in compliance with
all applicable federal and state securities laws.
7.6 Liabilities. Except as set forth in the Company's Public Filings or
Schedule 3.6 of Exhibit B to this Agreement, the Company has not incurred any
unpaid indebtedness for money borrowed or any other contractual liabilities in
excess of $1,000,000 individually, or $2,000,000 in the aggregate.
7.7 Governmental Consents. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
the Agreement, (i) other than filing pursuant to the Xxxx-Xxxxx-Xxxxxx Premerger
Notification Act ("HSR Act"), if applicable, and (ii) except for registration or
qualification, or taking such action to secure exemption from such registration
or qualification, of the Shares (and all other securities to be sold by the
Company) under applicable state or federal securities laws, which actions shall
be taken, by and at the expense of the Company, on a timely basis as may be
required.
7.8 Litigation. Except as set forth in the Company's Public Filings or in
Schedule 3.8 of Exhibit B to this Agreement, there is no action, suit,
proceeding or investigation pending or, to the Company's knowledge, currently
threatened against the Company which questions the validity of this Agreement or
the right of the Company to enter into it, or to consummate the transactions
contemplated hereby, or which reasonably would be expected to have, either
individually or in the aggregate, a Material Adverse Effect, or result in any
change in the current equity ownership of the Company, nor is the Company aware
that there is any basis for the foregoing. To the Company's knowledge, there
are no legal actions or investigations pending or threatened involving the
employment by or with the Company of any of the Company's current or former
employees, their use in connection with the Company's business of any
information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers or
alleging a violation of any federal, state or local statute or common law
relationship with the Company. The Company is not a party to any order, writ,
injunction, judgment or decree of any court.
7.9 Employees and Consultants. Except as set forth in Schedule 3.9 of Exhibit
B to this Agreement:
(a) To the Company's knowledge, none of its employees is obligated under
any contract (including licenses, covenants or contracts of any nature) or other
agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of his best efforts to
promote the interests of the Company or that would conflict with the Company's
business as proposed to be conducted. Neither the execution nor delivery of
this
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Agreement, nor the carrying on of the Company's business by the employees
of the Company, nor the conduct of the Company's business as proposed, will, to
the Company's knowledge, conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any material
contract, covenant or instrument under which any of such employees is now
obligated.
(b) Except as set forth in the Company's Public Filings, each employee of,
or consultant to, the Company, who has or is proposed to have access to
confidential or proprietary information of the Company, is a signatory to, and
is bound by, an agreement with the Company relating to nondisclosure,
proprietary information and assignment of patent, copyright and other
intellectual property rights.
(c) To the best of the Company's knowledge, no employee of, or consultant
to, the Company is in violation of any term of any employment contract, patent
disclosure agreement or any other contract or agreement including, but not
limited to, those matters relating to (i) the relationship of any such employee
with the Company or to any other party as a result of the nature of the
Company's business as currently conducted, or (ii) unfair competition, trade
secrets or proprietary information.
7.10 Patents and Trademarks. The term "Intellectual Property" shall mean the
Company's patents, service marks, trademarks, copyrights, trade secrets,
proprietary rights or other intellectual property. The Company has not received
any written communications alleging that the Company has violated or, by
conducting its business as proposed, would violate any of the Intellectual
Property of any other person or entity. To the best of the Company's knowledge,
all of its Intellectual Property was validly obtained and free from any
impediments, including but not limited to patent invalidity or unenforceability.
7.11 Compliance with Other Instruments. The Company is not in violation or
default of any provisions of the Certificate or the Company's By-laws or of any
instrument, judgment, order, writ or decree, where any such violations or
defaults, singly or in the aggregate, would have a Material Adverse Effect.
7.12 Agreements; Action.
(a) Except for agreements explicitly contemplated hereby and as set forth
in the Company's Public Filings or in Schedule 3.12(a) of Exhibit B to this
Agreement, there are no agreements, understandings, transactions or proposed
transactions between the Company and any of its officers, directors, or
affiliates, or any affiliate thereof of a nature required to be disclosed
pursuant to the provisions of Regulation S-K, promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and none of any such
individuals or entities has any interest in any party to any such agreement,
understanding, transaction or proposed transaction.
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(b) Except as set forth in the Company's Public Filings or in Schedule
3.12(b) of Exhibit B to this Agreement, the Company has not (i) declared or paid
any dividends, or authorized or made any distribution upon or with respect to
any class or series of its capital stock, (ii) made any loans or advances to any
person, other than ordinary advances to employees for travel expenses, which in
the aggregate exceed $100,000, or (iii) sold, exchanged or otherwise disposed of
any of its assets or rights, other than in the ordinary course of business.
(c) The Company has not admitted in writing its inability to pay its debts
generally as they become due, filed or consented to the filing against it of a
petition in bankruptcy or a petition to take advantage of any insolvency act,
made an assignment for the benefit of creditors, consented to the appointment of
a receiver for itself or for the whole or any substantial part of its property,
or had a petition in bankruptcy filed against it, been adjudicated a bankrupt,
or filed a petition or answer seeking reorganization or arrangement under the
federal bankruptcy laws or any other laws of the United States or any other
jurisdiction.
(d) The Company is in compliance with all obligations, agreements and
conditions contained in any evidence of indebtedness or any loan agreement or
other contract or agreement (whether or not relating to indebtedness) to which
the Company is a party or is subject (collectively, the "Obligations"), the lack
of compliance with which could afford to any person the right to (i) accelerate
any indebtedness or (ii) terminate any right or agreement of the Company, the
termination of which would have a Material Adverse Effect. To the best of the
Company's knowledge and belief, all other parties to such Obligations are in
compliance with the terms and conditions of such Obligations.
7.13 Registration Rights. Except as provided in the Company's Public Filings
or in Schedule 3.13 of Exhibit B to this Agreement, the Company has not granted
or agreed to grant any registration rights, including piggyback rights, to any
person or entity.
7.14 Title to Property and Assets. The Company has good, legal and
merchantable title to all of its assets, including all properties and assets
reflected on its June 30, 1998 Balance Sheet, free and clear of all liens,
claims, restrictions or encumbrances, except those assets disposed of since the
date of such Balance Sheet in the ordinary course of business, none of which
either alone or in the aggregate are material, either in nature or amount, to
the business of the Company. All machinery and equipment included in such
properties which are material to the business of the Company are in good
condition and repair, and each lease of real or personal property to which the
Company is a party is fully effective, affords the Company peaceful and
undisturbed possession of the subject matter of the lease, and is free of any
liens, claims restrictions or encumbrances. Each such lease constitutes a valid
and binding obligation of, and is enforceable in accordance with its terms
against, the respective parties thereto. Except as provided in the Company's
Public Filings or in Schedule 3.14 of Exhibit B to this Agreement, with respect
to the property and assets it leases, the Company is in all respects in
compliance with such leases, has not received notice of any allegations that it
is in default thereunder in any respect and holds a valid leasehold interest
free of any liens, claims or encumbrances.
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7.15 Financial Statements. The Company has delivered to the Investor (i) the
10-K containing its audited financial statements (Balance Sheets, Statements of
Operations, Statements of Shareholder's Equity and Statements of Cash Flow) at
December 31, 1997 and for the fiscal year then ended (the "Audited Financial
Statements"); and (ii) the 10-Qs for the first and second quarters of 1998,
containing unaudited financial statements (collectively, the "Financial
Statements"). The Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated and fairly present the financial condition and
consistent operating results of the Company as of the dates, and for the
periods, indicated therein. Since June 30, 1998, the Company has conducted its
business in the ordinary course, and there has not been any material adverse
change in the financial condition or operations of the Company. Except as set
forth in the Financial Statements and in the material agreements listed in
Schedule 3.15 of Exhibit B to this Agreement, the Company has no material
liabilities, contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to June 30, 1998 and (ii) obligations
under contracts and commitments incurred in the ordinary course of business and
not required under GAAP to be reflected in the Financial Statements, which, in
both cases, individually or in the aggregate, are not material to the financial
condition or operating results of the Company. Except as disclosed in the
Financial Statements, the Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation. The Company maintains
and consistently applies and will continue to maintain and consistently apply a
standard system of accounting established and administered in accordance with
GAAP.
Since January 1, 1998, the Company has filed all required reports,
schedules, forms, statements and other documents (including exhibits and all
other information incorporated therein) with the SEC ("Company SEC Documents").
As of their respective dates, the Company SEC Documents complied in all material
respects with the requirements of the Securities Act or the Securities Exchange
Act, as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Company SEC Documents, and no Company SEC
Documents when filed contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company
included in Company SEC Documents complied as to form, as of their respective
dates of filing with the SEC, in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP (except, in the case
of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of the
company and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).
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7.16 Employee Benefit Plans. To the best of the Company's knowledge, the
Company is in compliance with applicable laws governing the Company's "employee
benefit plans" as such term is defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, except where such failure to comply
would not have a Material Adverse Effect.
7.17 Tax Returns, Payments and Elections. The Company has filed all tax
returns and reports as required, and within the time prescribed, by law,
including without limitation, all federal, state and local income, excise or
franchise tax returns, real estate and personal property tax returns, sales and
use tax returns, payroll tax returns and other tax returns or reports required
to be filed by it. These returns and reports are true and correct in all
material respects. The Company has paid or made provision for the payment of all
accrued and unpaid taxes and other charges to which the Company is subject and
which are not currently due and payable. The federal income tax returns of the
Company have never been audited by the Internal Revenue Service, and the Company
has not agreed to an extension of the statute of limitations with respect to any
of its tax years. Neither the Internal Revenue Service nor any other taxing
authority is now asserting, nor is threatening to assert, against the Company
any deficiency or claim for additional taxes or interest thereon or penalties in
connection therewith; nor does such deficiency or claim or basis for such
deficiency or claim exist. The Company has not made any elections pursuant to
the Code (other than elections which relate solely to methods of accounting,
depreciation or amortization) which would have a Material Adverse Effect on the
Company, as the Company's business is presently conducted or proposed to be
conducted.
7.18 Insurance. The Company has in full force and effect fire, casualty and
liability insurance policies, with coverage, in the case of property insurance,
sufficient in amount (subject to reasonable deductibles) to allow it to replace
any of its properties that might be damaged or destroyed, and in the case of
casualty and liability insurance, in amounts customary and adequate for
businesses similar to the business of the Company.
7.19 Labor Agreements and Actions. The Company does not have any collective
bargaining agreements covering any of its employees, nor is the Company bound by
or subject to (and none of its assets or properties is bound by or subject to)
any written or oral, express or implied, contract, commitment or arrangement
with any labor union, and no labor union has requested or, to the knowledge of
the Company, has sought to represent any of the employees, representatives or
agents of the Company. There is no strike or other labor dispute involving the
Company pending, or to the knowledge of the Company threatened, which could have
a Material Adverse Effect (as the Company's business is presently conducted and
as it is proposed to be conducted), nor is the Company aware of any labor
organization activity involving its employees. The Company is not aware that
any of its executive officers or significant employees, as such terms are used
in Regulation S-K (section 401(b) and (c) of Regulation S-K, intends to
terminate his employment with the Company.
7.20 Real Property Holding Corporation. The Company is not, and has not been
at any time, a United States real property holding corporation as defined in
Section 897 of the Code.
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7.21 Offering. Subject to the accuracy of the Investor's representations set
forth in Section 4 of this Agreement, the offer, sale and issuance of the Shares
to be issued in conformity with the terms of this Agreement constitute
transactions which are: (i) in full compliance with all applicable laws; and
(ii) exempt from the registration requirements of the Securities Act and from
all applicable state registration or qualification requirements, other than
those with which the Company has complied or will comply.
7.22 Environmental Matters.
(a) To the Company's knowledge, the Company is not in violation of any
Environmental Law (as hereinafter defined) which would have a Material Adverse
Effect on the Company and to its knowledge, no material expenditures are or will
be required in order to comply with any Environmental Law. As used in this
Agreement, "Environmental Law" shall mean any applicable federal, state and
local law, ordinance, rule or regulation that regulates, fixes liability for, or
otherwise relates to, the handling, use (including use in industrial processes,
in construction, as building materials, or otherwise), treatment, storage and
disposal of hazardous and toxic wastes and substances, and to the discharge,
leakage, presence, migration, actual Release (as hereinafter defined) or
threatened Release (whether by disposal, a discharge into any water source or
system or into the air, or otherwise) of any pollutant or effluent.
(b) The Company has not used, generated, manufactured, refined, treated,
transported, stored, handled, disposed, transferred, produced, processed or
released (hereinafter together defined as "Release") any Hazardous Materials (as
hereinafter defined) on, from or affecting any Property (as hereinafter defined)
in any manner or by any means in violation of any Environmental Laws and to the
best of the Company's knowledge and belief after due investigation, there is no
threat of such Release. As used herein, the term "Property" shall include,
without limitation, land, buildings and laboratory facilities owned or leased by
the Company or as to which the Company now has any duties, responsibilities (for
cleanup, remedy or otherwise) or liabilities under any Environmental Laws, or as
to which the Company or any subsidiary of the Company may have such duties,
responsibilities or liabilities because of past acts or omissions of the Company
or any such subsidiary or their predecessors, or because the Company or any such
subsidiary or their predecessors in the past was such an owner or operator of,
or bore some other relationship with, such land, buildings or laboratory
facilities. The term Hazardous Materials shall include, without limitation,
any flammable explosives, petroleum products, petroleum by-products, radioactive
materials, hazardous wastes, hazardous substances, toxic substances or related
materials as defined by Environmental Laws.
(c) The Company has not received written notice that the Company is a party
potentially responsible for costs incurred at a cleanup site or corrective
action under any Environmental Laws. The Company has not received any written
requests for information in connection with any inquiry by any Governmental
Authority (as hereinafter defined) concerning disposal sites or other
environmental matters. As used herein, Governmental Authority shall
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mean any nation or government, any federal, state, municipal, local, provincial,
regional or other political subdivision thereof, and any entity or person
exercising executive, legislative, judicial regulatory or administrative
functions of or pertaining to government.
(d) The stockholders of the Company have had no control over, or authority
with respect to, the waste disposal operations of the Company.
7.23 Securities Laws. Neither the Company nor, to the best of the Company's
knowledge, anyone acting on its behalf has offered securities of the Company for
sale to, or solicited any offers to buy the same from, or sold securities of the
Company to, any person or organization, in any case so as to subject the
Company, its promoter, directors or officers to any liability under the
Securities Act, the Securities Exchange Act of 1934, as amended (the "
Securities Exchange Act"), or any state securities or blue sky law
(collectively, the "Securities Laws"), or any other applicable laws.
7.24 Licenses and Other Rights; Compliance with Laws. The Company has all
franchises, permits, licenses and other rights and privileges necessary to
permit it to own its properties and to conduct its business as presently
conducted and is in compliance in all material respects thereunder except where
failure to obtain such rights would not have a Material Adverse Effect on the
Company. The Company is in compliance in all material respects with all laws
and governmental rules and regulations applicable to its business, properties
and assets, and to the products and services sold by it, including, without
limitation, all such rules, laws and regulations relating to fair employment
practices, occupational safety and health and public safety, except where the
failure to comply would not have a Material Adverse Effect. The Company is in
compliance with the applicable provisions, if any, of the Clinical Laboratories
Improvement Act of 1967, as amended.
7.25 Reliance. The Company understands that the foregoing representations and
warranties shall be deemed material and to have been relied upon by the
Investor. No representation or warranty by the Company in this Agreement, and
no written statement contained in any document, certificate or other writing
delivered by the Company to the Investor contains any untrue statement of
material fact or omits to state any material fact necessary to make the
statements herein or therein, in light of the circumstances under which they
were made, not misleading.
8. Representations and Warranties of the Investor. Novartis hereby
represents and warrants the following:
8.1 Authorization, Governmental Consents and Compliance with Other
Instruments. All corporate action on the part of the Investor necessary for the
authorization, execution and delivery of this Agreement and the performance of
all obligations of the Investor hereunder has been taken or will be taken prior
to the Closing. This Agreement constitutes a valid and legally binding
obligation of the Investor, enforceable in accordance with its terms, except as
such
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enforcement is limited by bankruptcy, insolvency and similar laws affecting
creditor rights. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of the Investor is
required in connection with the consummation of the transactions contemplated by
this Agreement, except as may be required by the HSR Act. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in any violation or be in
conflict with or constitute, with or without the passage of time and giving of
notice, either a default under any provision of the Investor's corporate charter
or By-laws or any instrument, judgment, order, writ, decree or contract to which
the Investor is a party or by which it is bound.
8.2 Purchase Entirely for Own Account. By the Investor's execution of this
Agreement, the Investor hereby confirms that the Shares will be acquired for
investment for the Investor's own account, not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and the Investor
has no present intention of selling, granting any participation, or otherwise
distributing the Shares. By executing this Agreement, the Investor further
represents that the Investor does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participation to such
person or to any third person, with respect to any of the Shares. The Investor
represents that it has full power and authority to enter into this Agreement.
8.3 Disclosure of Information. The Investor has received all the information
from the Company and its management that the Investor considers necessary or
appropriate for deciding whether to purchase the Shares hereunder. The Investor
further represents that it has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the offering of
the Shares. The foregoing, however, does not limit or modify the
representations and warranties of the Company in Section 3 of this Agreement.
8.4 Investment Experience and Accredited Investor Status. The Investor either
(i) is an accredited investor (as defined in Regulation D promulgated under the
Securities Act) or (ii) is not a United States Person as that term is defined in
Regulation S of the Securities Act, as amended and is not acquiring the Common
Shares for the account or benefit of any United States Person. The Investor is
an investor in securities of companies in the development stage and acknowledges
that it is able to fend for itself, and bear the economic risk of its investment
and has such knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of the investment in the Shares
hereunder.
8.5 Restricted Securities. The Investor understands that the Shares, when
issued, will be restricted securities under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances. In this connection, the Investor represents
that it is
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familiar with Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act.
8.6 Further Limitations on Disposition. Without in any way limiting the
representations set forth above, the Investor further represents, warrants and
agrees that it will not make any disposition of all or any portion of the
Shares, except to an Affiliate, unless:
(a) There is then in effect a Registration Statement under the Securities
Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
(b) The disposition is made pursuant to Rule 144 or similar provisions of
federal securities laws as in effect from time to time; or
(c) (i) the Investor shall have notified the Company of the proposed
disposition; and (ii) if requested by the Company, the Investor shall have
furnished the Company with an opinion of counsel, reasonably satisfactory to the
Company, that such disposition will not require registration of such Shares
under the Securities Act.
8.7 Legends. It is understood that the certificates evidencing the Shares will
bear the following legends:
(a) These securities have not been registered under the Securities Act of
1933. They may not be sold, offered for sale, pledged or hypothecated in the
absence of a registration statement in effect with respect to the securities
under such Act or an opinion of counsel reasonably satisfactory to the Company
that such registration is not required or unless sold pursuant to Rule 144 of
such Act.
(b) Any legend required by applicable state securities laws.
9. Conditions to First Closing and Second Closing of Investor,
Respectively. The Investor's obligation to purchase the Shares at the Closings
is subject to the fulfillment as of the Closing Dates of the following
conditions:
9.1 Representations and Warranties Correct. The representations and warranties
made by the Company in Section 3 hereof shall be true and correct in all
material respects as of the Closing Dates with the same force and effect as
though such representations and warranties had been made on the Closing Dates,
except that:
(a) there shall be delivered at the Closings a certificate, signed by an
officer of the Company, which contains the representation and warranty set forth
in Section 3.2(a) but substituting the then-current numbers of shares for the
numbers of shares set forth in Section 3.2(a); and
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(b) there shall be delivered at the Closings a certificate, signed by an
officer of the Company, which contains the representation and warranty set forth
in Section 3.15, but substituting the most recent financial statements then
available (which shall have been delivered to the Investor at least three
business days prior to such Closings) for the financial statements referred to
in Section 3.15.
9.2 Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the Closing Dates shall
have been performed or complied with in all material respects. All proceedings
to have been taken and all waivers and consents to be obtained in connection
with the transactions contemplated by this Agreement shall have been taken or
obtained, and all documents incidental thereto shall be satisfactory to the
Investor and its counsel, and the Investor and its counsel shall have received
copies (executed or certified, as may be appropriate) of all documents which the
Investor or its counsel may reasonably have requested in connection with such
transactions.
9.3 Compliance Certificate. The Company shall have delivered to the Investor a
certificate of the Company in the form of Exhibit C hereto, executed by the
President and Chief Executive Officer of the Company, certifying to the
fulfillment of the conditions specified in Sections 5.1 and 5.2 of this
Agreement.
9.4 Legal Opinion. All legal matters incident to the purchase of the Shares
shall be satisfactory to the Investor's counsel and the Investor shall have
received from Xxxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP, counsel for the Company,
such firm's opinion addressed to the Investor and dated the dates of the
Closings, respectively, in the form of Exhibit D, hereto.
9.5 Certification of Resolutions and Officers. The Company shall have
delivered to the Investor a certificate or certificates, dated the dates of the
Closings, respectively, of the Secretary of the Corporation certifying as to (a)
the resolutions of the Company's Board of Directors (and the vote of the
stockholders, if necessary) authorizing the execution and delivery of this
Agreement, the issuance to the Investor of the Shares, the execution and
delivery of such other documents and instruments as may be required by this
Agreement, and the consummation of the transactions contemplated hereby, and
certifying that such resolutions were duly adopted and have not been rescinded
or amended as of said date, (b) the name and the signature of the officers of
the Company authorized to sign, as appropriate, this Agreement and the other
documents and certificates to be delivered pursuant to this Agreement by either
the Company or any of its officers, and (c) a specimen certificate representing
the Common Stock.
9.6 Certification of No Material Adverse Change. The Company shall have
delivered to the Investor a certificate, dated the dates of the Closings,
respectively, of the Chief Financial Officer of the Corporation certifying that
since June 30, 1998, there has not been any material adverse change in the
financial condition or operations of the Company, and that except to the extent
reflected in the Financial Statements referred to in Section 3.15 (or in such
later audited
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financial statements, as the case may be), and except for liabilities arising in
the ordinary course of business (none of which liabilities either alone or in
the aggregate are material either in nature or amount to the business of the
Company), the Company has no material accrued or contingent liabilities which
are not specifically described in such financial statements.
10. Conditions to First Closing and Second Closing of the Company,
Respectively. The Company's obligation to sell the Shares at the Closings is
subject to the fulfillment as of the date of the following condition:
10.1 Representations and Warranties Correct. The representations and warranties
made by the Investor in Section 4 hereof shall be true and correct in all
material respects as of the dates of the Closings with the same force and effect
of though such representations and warranties had been made on such Dates.
11. Mutual Conditions of Closings. The obligations of each of the
Investor and the Company to consummate the Closings are subject to the
fulfillment as of the Closing Dates of the following conditions:
11.1 Qualifications. All consents, permits, approvals, qualifications and
registrations to be obtained or effected with any governmental authority,
including, without limitation, necessary Blue Sky law permits and qualifications
required by any state for the offer and sale to the Investor of the Shares,
shall have been obtained or effected, and any filings required under the HSR Act
shall have been made and the required waiting period shall have elapsed.
11.2 Absence of Litigation. There shall be no injunction, actions, suits,
proceeding or investigations pending or currently threatened against the Company
or the Investor which questions the validity of this Agreement or the right of
the Company or the Investor to enter into it, or to consummate the transactions
contemplated hereby.
11.3 License Agreement. The Company and the Investor shall have entered into
the License Agreement.
12. Additional Covenants and Agreements.
12.1 Reserved.
12.2 Inspection. The Company shall permit the Investor from time to time, at
the Investor's expense, to visit and inspect the Company's properties, and to
discuss the Company's affairs, finances and accounts with its officers, all at
such reasonable times as may be requested by the Investor; provided, however,
that the Company shall not be obligated pursuant to this Section 8.2 to provide
access to any information which it reasonably considers to be a trade secret or
similar confidential information.
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12.3 HSR Filing. The parties shall each take any and all actions reasonably
necessary to effect any appropriate filings required under the HSR Act as
promptly as possible.
12.4 Availability of Common Stock. The Company shall at all times keep enough
shares of Common Stock for issuance in order to comply with its potential
obligations under this Agreement without the need for a shareholders' vote.
12.5 The Company shall take all actions reasonably necessary to remain listed
on the NASDAQ.
13. Registration Rights; Compliance with the Act. The Company covenants
and agrees as follows:
13.1 Definitions. For purposes of this Section 9:
(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 Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document;
(b) The term "Registrable Securities" means the Shares excluding in all
cases, however, (i) any Registrable Securities after they have been sold in a
transaction in which registration rights are not assigned, or (ii) any
Registrable Securities sold (other than any sale to an Affiliate of the
Investor) to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction;
(c) The term "Holder" means any person owning or having the right to
registration of Registrable Securities hereunder; and
(d) The term "Form S-3" means such form under the Securities Act as in
effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the Securities and Exchange Commission ("SEC") which
permits inclusion or incorporation of substantial information by reference to
other documents filed by the Company with the SEC.
13.2 Form S-3 Registration. At any time after the First Closing Date, if the
registration of Registrable Securities under the Securities Act can be effected
on Form S-3 (or any successor short-form registration promulgated by the SEC),
subject to the provisions of this Section 9.2, the Company will, upon written
demand of the Investor, promptly file with the SEC a registration under the
Securities Act on Form S-3, including a Form S-3 shelf registration (each an
"Initial Shelf Registration"), of all or such portion of the Registrable
Securities as the Investor (or other Holder(s)) shall specify by written notice
given to the Company; provided, however, that the market value of the
Registrable Securities to be included in any such registration shall be
estimated to be at least $1,000,000 at the time of filing of such registration
statement, and
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provided further that the Company shall not be required to effect more than
three such registrations pursuant to this Section 9.2. The Company shall use
commercially reasonable efforts to cause each Initial Shelf Registration to be
declared effective under the Securities Act as soon as practicable after filing
(the "Effectiveness Date") and shall keep each Initial Shelf Registration
continuously effective under the Securities Act during the period (the
"Effectiveness Period") ending upon the earlier to occur of (i) the sale of all
Registrable Securities covered by such Initial Shelf Registration or any
Subsequent Shelf Registration (as defined herein) in the manner set forth and as
contemplated in such Initial Shelf Registration and (ii) the Investor's ability
to sell all Registrable Securities, without volume limitation, under Rule 144
under the Securities Act, as confirmed in written opinion by counsel to the
Company, in each case reasonably acceptable to the Investor.
(a) In case the Company shall receive from the Investor a written request
or requests that the Company effect a registration on Form S-3 and any related
qualification or compliance with respect to shares of Registrable Securities the
reasonably anticipated aggregate price to the public of which, net of
underwriting discounts and commissions, would exceed $1,000,000, the Company
will:
(i) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all Holders;
(ii) use its best efforts to effect such registration on or prior to
the second anniversary of the date of this Agreement;
(iii) as soon as practicable, effect all such qualifications and
compliance as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Holder's or Holders Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any other Holder or Holders joining in such
request as are specified in a written request given within 15 days after receipt
of such written notice from the Company; provided, however, that the Company
shall not be obligated to effect any such registration, qualification or
compliance, pursuant to this Section 9.2: (1) if Form S-3 is not available for
such offering by the Holders; (2) if the Holders, together with the holders of
any other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at an
aggregate price to the public (net of any underwriters discounts or
commissions) of less than $1,000,000; or (3) if the Company shall furnish to the
Holders a certificate signed by the President and Chef Executive Officer of the
Company stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its shareholders
for such Form S-3 Registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the
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Form S-3 registration statement for a period of not more than 60 days after
receipt of the request of the Holder or Holders under this Section 9.2;
provided, however, that the Company shall have this right to defer the filing of
the Form S-3 registration statement only once in connection with any written
request of the Holder or Holders; and
(iv) All expenses incurred in connection with the registrations,
qualifications and compliance requested pursuant to Section 9.2, (exclusive of
underwriting discounts and commissions and any fees and expenses of a special
counsel to a Holder) shall be paid by the Company.
(b) If any Initial Shelf Registration or any Subsequent Shelf
Registration ceases to be effective for any reason at any time during the
Effectiveness Period (other than because of the sale of all of the securities
registered thereunder), the Company shall use commercially reasonable efforts to
obtain the prompt withdrawal of any order suspending the effectiveness thereof,
and in any event shall within 45 days of such cessation of effectiveness amend
such Initial Shelf Registration in a manner to obtain the withdrawal of the
order suspending the effectiveness thereof, or file an additional "shelf"
Registration Statement pursuant to Rule 415 covering all of the Registrable
Securities covered by such Initial Shelf Registration (a "Subsequent Shelf
Registration"). If a Subsequent Shelf Registration is filed, the Company shall
use commercially reasonable efforts to cause the Subsequent Shelf Registration
to be declared effective under the Securities Act as soon as practicable after
such filing and to keep such Registration Statement continuously effective for
the remainder of the Effectiveness Period. As used herein, the term "Shelf
Registration" means any Initial Shelf Registration and any Subsequent Shelf
Registration. 13.3 Company Registration. If at any time after the date of this
Agreement (but without any obligation hereunder to do so) the Company proposes
to register (including for this purpose a registration effected by the Company
for stockholders other than the Holder(s)) any of its stock or other securities
under the Securities Act in connection with the public offering of such
securities (other than (i) a registration relating solely to the sale of
securities to current or former employees, officers, advisors, consultants or
directors of the Company or any subsidiary of the Company pursuant to a stock
purchase plan or stock option or stock awards approved by the Board of Directors
of the Company, (ii) a registration on Form S-4 or any similar successor form,
(iii) 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 or (iv) a registration in which
the only Common Stock being registered is Common Stock issuable upon conversion
of debt securities which are also being registered), 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 giving of
such notice by the Company in accordance with Section 10.10, the Company shall,
subject to the provisions of Section 9.4, cause to be registered under the
Securities Act of the Registrable Securities that each such Holder has requested
to be registered. All expenses incurred in connection with the inclusion of the
Holder's securities in the Company's underwritten offering pursuant to this
Section 9.3 shall be borne by the Company. The Company shall not be obligated to
effect, or to take any action to effect, any registration pursuant to this
Section 9.3 if,
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(i) a registration statement on Form S-3 covering the Registrable Securities is
in effect, (ii) the managing underwriter advises that, in its sole discretion,
inclusion of the Registrable Securities would adversely affect the marketing of
the offering, or (iii) at the time such registration would otherwise be
required, the Company delivers to the Holder(s) seeking to have their
Registrable Securities included in such Registration an opinion of counsel, in
form and substance reasonably acceptable to such Holder(s), to the effect that
the Registrable Securities requested to be registered may then be sold pursuant
to Rule 144(k) of the Securities Act; provided, however, that if the managing
underwriter determines that the total amount of Registrable Securities requested
by the Holders to be included in such offering exceeds the amount of securities
of such Holders that the managing underwriter determines in its sole discretion
is compatible with the success of the offering, then the Company shall be
required to include in the offering that number of such Registrable Securities
owned by such Holder which the managing underwriter determines in its sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the Holder(s) and the holders of other
--- ----
securities entitled to be included in such underwriting under the terms of any
registration rights agreement with the Company).
13.4 Obligations of the Company. Whenever required under this Section 9 to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with respect to
such Registrable Securities sought to be included therein and use its best
efforts to cause such registration statement to become effective as promptly as
practicable.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders, provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing
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underwriter of such offering. Each Holder participating in such underwriting
shall also enter into and perform its obligations under such an agreement.
(f) Promptly notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement or
any offering memorandum or other offering document includes 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 not misleading in the light
of the circumstances then existing.
13.5 Furnish Information. It shall be a condition precedent to the obligations
of the Company to take any action pursuant to this Section 9 with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company such information regarding itself, the Registrable Securities held
by it, and the intended method of disposition of such securities as shall be
required to effect the registration of such Holder's Registrable Securities.
13.6 Indemnification. In the event any Registrable Securities are included in a
registration statement under this Section 9:
(a) The Company will indemnify and hold harmless each Holder registering
Registrable Securities for resale, any underwriter (as defined in the Securities
Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Securities Act or the Securities Exchange
Act, against any and all losses, claims, damages, or liabilities (joint or
several) to which they may become subject under any Securities Laws including,
without limitation, the Securities Act, or any other statute or common law of
the United States of America or any other country or political subdivision
thereof, or otherwise, including the amount paid in settlement of any litigation
commenced or threatened (including any amounts paid pursuant to or in settlement
of claims made under the indemnification or contribution provisions of any
underwriting or similar agreement entered into by the Investor in connection
with any offering or sale of securities covered by this Agreement), and shall
promptly reimburse them, as and when incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating any claims and
defending any actions (provided, that the Company has been afforded the
opportunity to participate in any such investigation or defense and provided,
further, that the Holder has cooperated with the Company and shared the
information resulting from or necessary to such investigation or defense),
insofar as any 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, or in any offering memorandum
or other offering document relating to the offering and sale of such securities,
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the
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statements therein not misleading, or (iii) any violation or alleged violation
by the Company of the Securities Act, the Securities Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Securities Exchange Act or any state Securities Law; or other applicable
laws of any jurisdiction relating to any actual or alleged action or inaction
required of the Company in connection with such offering; provided, however, the
Company shall not 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
the Investor, provided, further, however, that the indemnity agreement contained
in this subsection 9.6(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without consent of the Company, which consent shall not be unreasonably
withheld.
(b) 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 Securities 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
liabilities (or actions in respect thereto) which 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 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 9.6(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 9.6(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without consent of the Holder, which consent shall not be
unreasonably withheld; provided, that, in no event shall any indemnity under
this subsection 9.6(b) exceed the gross proceeds from the offering received by
such Holder.
(c) Promptly after receipt by an indemnified party under this Section 9.6
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 9.6, 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 shall have the right to retain its own
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
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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 9.6, 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 9.6.
(d) The obligations of the Company and Holders under this Section 9.6 shall
survive the completion of any offering of Registrable Securities in a
registration statement under this Section 9 and otherwise.
13.7 Reports Under Securities Exchange Act. With a view to making available to
the Holders the benefits of Rule 144 promulgated under the Securities Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration or pursuant to
a registration on Form S-3, the Company agrees to use its best efforts to:
(a) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Securities Exchange
Act; and
(b) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144, the Securities
Act and the Securities Exchange Act, or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time after it so
qualifies), (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested in availing any Holder of
any rule or regulation of the SEC (exclusive of Rule 144A) which permits the
selling of any such securities without registration or pursuant to such form.
13.8 Amendment of Registration Rights. Notwithstanding the extent to which any
provision of Section 9 may be amended or waived with respect to any other
Holder, no provision of Section 9 may be amended or waived with respect to the
Investor, without the express written consent of the Investor.
14. Miscellaneous.
14.1 Survival of Warranties. The warranties and representations of the Company
and the Investor contained in this Agreement (except for those contained in
Section 3.22 but including those contained in the opinion and certificates
delivered pursuant to Section 5 hereof) shall survive until the earlier of two
years from the date of this Agreement or the Investor sells all of the Shares.
The representations and warranties of the Company set forth in Section 3.22
shall survive indefinitely until, by their respective terms, they are no longer
operative.
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14.2 Indemnification. The Company and the Investor shall indemnify, defend and
hold each other and each other's (the Investor and the Investor's) directors,
officers, employees, agents and affiliates harmless against any and all
liabilities, lost, cost or damage, together with all reasonable costs and
expenses related thereto (including legal and accounting fees and expenses),
arising from, relating to, or connected with the untruth, inaccuracy or breach
of any statements, representations, warranties or covenants of the other party
contained herein, including, but not limited to, all statements,
representations, warranties or covenants concerning environmental matters
without regard to any limitation as to materiality contained in Section 3.22
hereof relating to such environmental matters. The foregoing indemnification
shall survive the termination of this Agreement for any reason.
14.3 Remedies. In case any one or more of the covenants or agreements set
forth in this Agreement shall have been breached by any party hereto, the party
or parties entitled to the benefit of such covenants or agreements may proceed
to protect and enforce their rights either by suit in equity or action at law,
including, but not limited to, an action for damages as a result of any such
breach or an action for specific performance of any such covenant or agreement
contained in this Agreement. The rights, powers and remedies of the parties
under this Agreement are cumulative and not exclusive of any other right, power
or remedy which such parties may have under any other agreement or law. No
single or partial assertion or exercise of any right, power or remedy of a party
hereunder shall preclude any other or further assertion or exercise thereof.
14.4 Successors and Assigns. Except as otherwise expressly provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties. This
Agreement and the rights and duties of the Company set forth herein may be
freely assigned, in whole or in part, upon the written consent of the Investor,
which consent may not be unreasonably withheld. Notwithstanding the foregoing
sentence, the Company may assign this Agreement, and the rights and the duties
of the Company set forth herein, to an entity or person which purchases all or
substantially all of its assets or voting securities, so long as the successor
agrees in writing to be bound by all of the terms this Agreement.
14.5 Entire Agreement. This Agreement and the other writings referred to
herein or delivered pursuant hereto which form a part hereof contain the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous arrangements or understandings, whether
written or oral, with respect thereto; provided, however, that this Agreement is
not intended to supersede the License Agreement of even date herewith between
the Company and the Investor.
14.6 Governing Law and Consent to Jurisdiction. This Agreement shall be
governed by and construed under the laws of the State of New York (without
regard to the conflict of law principles thereof). Each of the parties
irrevocably submits to the exclusive jurisdiction of (a) the Supreme Court of
the State of New York, and (b) the United States District Court for the
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Xxxxxxxx Xxxxxxxx of New York, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby.
Each of the parties agrees to commence any action, suit or proceeding relating
hereto in the United States District Court for the Southern District of New York
or if such suit, action or other proceeding may not be brought in such court for
jurisdictional purposes, in the Supreme Court of the State of New York.
14.7 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
14.8 Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
14.9 Nouns and Pronouns. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms, and
the singular form of names and pronouns shall include the plural and vice-versa.
14.10 Notices. Unless otherwise provided, all notices, requests, consents and
other communications hereunder to any party shall be given in writing and shall
be deemed effectively given upon personal delivery to the party to be notified
or duly sent by first class registered or certified mail, or other courier
service, postage prepaid, or telecopied with a confirmation copy by regular
mail, and addressed or telecopied to the party to be notified at the address or
telecopier number indicated for such party at the address or telecopier number,
as the case may be, set forth below or such other address or telecopier number,
as the case may be, as may hereafter be designated in writing by the addressees
to the addressor listing all parties:
To the Company: Medarex, Inc.
0000 Xxxxx 00 Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: President
With a copy Xxxxxxxxx Xxxxxxxx Xxxxx & Xxxxx, LLP
(which shall 000 Xxxx Xxxxxx
not constitute Xxx Xxxx, Xxx Xxxx 00000
notice) to: Attention: Xxxxxx Xxxxxx
To the Investor: Novartis Pharma AG
Xxxxxxxxxxxx 00
XX-0000 Xxxxx
Xxxxxxxxxxx
Attention: Xxxxxx X. Xxxxx
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With a copy to: Xxxx Xxxxxxxx
Vice President and Associate General Counsel
Novartis Corporation
000 Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
All such notices, requests, consents and other communications shall be deemed to
have been received: (a) in the case of personal delivery, on the date of such
delivery; (b) in the case of mailing, on the seventh business day following the
date of such mailing; and (c) in the case of facsimile transmission, when
confirmed by facsimile machine report.
14.11 Finder's Fee. The Investor agrees to indemnify and to hold harmless the
Company from any liability for any commission or compensation in the nature of a
finder's fee (and the reasonable costs and expenses of defending against such
liability or asserted liability) for which the Investor or any of its officers,
partners, employees, or representatives is responsible. The Company agrees to
indemnify and hold harmless the Investor from any liability for any commission
or compensation in the nature of a finder's fee (and the reasonable costs and
expenses of defending against such liability or asserted liability) for which
the Company or any of its officers, employees or representatives is responsible.
14.12 Expenses. Each party shall pay its own fees and expenses with respect to
this Agreement. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement or the Articles, the prevailing party
shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
14.13 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), only with
the written consent of the Company and the Investor.
14.14 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, in any jurisdiction, such provision shall be
ineffective, as to such jurisdiction, and the balance of the Agreement shall be
interpreted as if such provision were so excluded, without invalidating the
remaining provisions of this Agreement; and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14.15 Confidentiality and Publicity. Neither the Company nor the Investor will
disclose to any person (other than its attorneys, accountants, employees,
officers, and directors) the existence or terms of this Agreement or any of the
transactions contemplated hereby without the prior written consent of the other
party, except as may, in the reasonable opinion of such party's counsel, be
required by law (in which event the disclosing party will first consult with the
other
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party with respect to such disclosure). If the Company is required to
provide a copy of this Agreement or any related document to any third party, the
Company shall ensure that such document is redacted, to the extent permitted by
law, to eliminate all confidential information. The Investor shall have the
right to review and approve each such document prior to its submission to a
third party. A period of ten business days will be provided for such review
unless not permitted by law, in which case the maximum period allowable shall be
provided. The Company and the Investor will consult and reach agreement with one
another as to the form and substance of any press release or any other public
disclosure of the existence or terms of this Agreement or the transactions
contemplated hereby prior to issuing any such press release or making any such
public disclosure.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first above written.
NOVARTIS PHARMA AG
By: /s/Xxxxxx X. Xxxxx
----------------------------
Name: Xxxxxx X. Xxxxx
--------------------------
Title: Head Financial Evaluation
and M&A Sector Pharma
------------------------
By: /s/Xx. X. Xxxxxx
----------------------------
Name: Xx. X. Xxxxxx
----------------------------
Title: Rechtskonsultent
----------------------------
MEDAREX, INC.
By: /s/Xxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxx
--------------------------
Title: President
-------------------------
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