Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is made and entered into as of this 25th day of
February, 1997 between Cadus Pharmaceutical Corporation, a Delaware corporation
(the "Issuer") and SmithKline Xxxxxxx Corporation, a Pennsylvania corporation
(the "Investor").
Background. Concurrently with the execution of this Agreement, the
Issuer and the Investor have entered into Stock Purchase Agreement pursuant to
which the Investor may acquire certain shares (the "Registrable Shares") of
common stock of the Issuer (the "Common Stock"). Any such purchase and sale of
the Registrable Shares is intended to be accomplished through a private
placement exempt from registration under the Securities Act of 1933, as amended
(the "Securities Act").
1. "Piggy Back" Registration. If at any time or times subsequent to
the first anniversary of the initial purchase by the Investor of any of the
Registrable Shares the Issuer shall determine to register under the Securities
Act (including pursuant to a demand of any stockholder of the Issuer exercising
registration rights) a public offering for cash of any of Common Stock, other
than on Form S-8 or Form S-4 or their then equivalents, it shall send to each
holder of Registrable Shares written notice of such determination. If within 15
days after receipt of such notice, such holder shall so request in writing, the
Issuer shall use its best efforts to include in such registration statement all
or any part of the Registrable Shares such holder requests to be registered;
provided, however, that the Issuer shall have the right to postpone or withdraw
any such registration at its sole discretion. If in connection with any offering
involving an underwriting of Common Stock to be issued by the Issuer, the
managing underwriter shall impose a limitation on the number of shares of such
Common Stock which may be included in any such registration statement because,
in its judgment, such limitation is desirable to effect an orderly public
distribution, the Issuer, or if the registration statement is requested by a
holder or holders pursuant to a demand or mandatory registration right, such
holder or holders, shall have first priority and the right to register all the
shares of which the Issuer or such holders, as the case may be, desire to sell,
and the balance of the shares to be included in said registration statement
shall be allocated ratably (on the basis of the number of shares requested to be
included) among the holders entitled to "piggy-back" on said registration
statement, including the holders of Registrable Shares. Notwithstanding the
foregoing, the Issuer shall not be obligated to include any Registrable Shares
in a
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registration statement pursuant to this Section 1 if the number of Registrable
Shares requested to be included in such registration shall have a fair market
value (based upon the probable offering price as estmated in good faith by the
Board of Directors of the Issuer) of less than $1,000,000). No incidental right
under this Section 1 shall be construed to limit any registration required under
Section 2. The Issuer shall have the right to select the investment banker(s)
and manager(s) to administer the offering.
Notwithstanding anything in this Section 1 to the contrary, the Issuer
shall only be required to include Registrable Shares in a registration
statement and send notices of determination to register under the Securities
Act, as described above, with respect to:
(a) any holder of Registrable Shares that holds Registrable
Shares having a fair market value, based upon the probable offering price (as
estimated in good faith by the Board of Directors of the Issuer) in excess of
$1,000,000; or
(b) holders of Registrable Shares that have held such shares
for less than three years; or
(c) affiliates of the Issuer, as defined under the Rules
promulgated under the Securities Act, unless such affiliates have the
capability to sell all his or its Registrable Shares within 180 days under such
Rules.
2. Required Registration. Upon written request by the Investor at
any time subsequent to the earlier of (x) the first anniversary of the initial
purchase by the Investor of any of the Registrable Shares or (y) the Key Check
Point Date (as defined in the research collaboration and license agreement
between the Issuer, the Investor and SmithKline Xxxxxxx plc executed
concurrently with this Agreement), the Issuer will use its best efforts to cause
such of the Registrable Shares as may be requested by the Investor to be
registered under the Securities Act as expeditiously as practicable. It is the
expressly understood that in the event of any such request, unless otherwise
indicated by the holder making such request, the registration statement shall be
filed under Rule 415 under the Securities Act which permits an offering on a
delayed or continuous basis, subject, however, to the provisions of Section 3
below. The Issuer shall not be obligated to effect more than two registration
statements pursuant to this Section 2; provided that the Issuer shall not be
required to effect more than one such registration statement in any twelve month
period. If the Issuer determines to include shares to be sold by it in any
registration request pursuant to this Section 2, such registration shall be
deemed to have been a registration under
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Section 1 of this Agreement. The Investor shall have the right to select the
investment banker(s) and manager(s) to administer the offering, subject,
however, to the approval of the Issuer, which approval shall not be unreasonably
withheld or delayed. Notwithstanding the foregoing, the Issuer shall not be
obligated to file a registration statement with the Securities and Exchange
Commission pursuant to this Section 2 (a) within 180 days following the
effective date of any registration of securities by the Issuer in an
underwritten public offering, (b) if the Issuer has sent notice to the Investor
of a proposed registration of Common Stock pursuant to Section 1 hereof and is
diligently pursuing such registration, (c) if the Issuer has filed a
registration statement which has not yet been declared effective by the
Securities and Exchange Commission and the Issuer is diligently pursuing such
effectiveness, (d) if the number of Registrable Shares to be included in such
registration shall have a fair market value (based upon the probable offering
price as estimated in good faith by the Board of Directors of the Issuer) of
less than $1,000,000, or (e) if such registration cannot be accomplished without
requirement for an audit of the Issuer's financial statements other than the
annual audit.
3. Effectiveness. The Issuer will use its best efforts to
maintain the effectiveness of any registration statement filed pursuant to
Section 2 registering Registrable Shares being offered on a continuous basis to
enable the holder of the Registrable Shares to sell on a delayed or continuous
basis as permitted by Rule 415 under the Securities Act, and from time to time
will amend or supplement such registration statement and the prospectus
contained therein as and to the extent necessary to comply with the Securities
Act and any applicable state securities statute or regulation; provided,
however, that the Issuer shall not be obligated to maintain the effectiveness of
said registration statement for a period in excess of 120 days after the date on
which such registration statement first becomes effective.
4. Indemnification of Investor. In the event that the Issuer
registers any of the Registrable Shares under the Securities Act, the Issuer
will indemnify and hold harmless the Investor and each underwriter of the
Registrable Shares so registered (including any broker or dealer through whom
such shares may be sold) and each Person, if any, who controls the Investor or
any such underwriter within the meaning of Section 15 of the Securities Act from
and against any and all losses, claims, damages, expenses, or liabilities, joint
or several, to which they or any of them become subject under the Securities Act
or under any other statute or at common law or otherwise, and, except as
hereinafter provided, will reimburse the Investor, each such underwriter and
each such controlling
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person, if any, for any legal or other expenses reasonably incurred by them or
any of them in connection with investigating or defending any actions whether or
not resulting in any liability, insofar as such losses, claims, damages,
expenses, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement, in any preliminary or amended preliminary prospectus, or
in the prospectus (or the registration statement or prospectus as from time to
time amended or supplemented by the Issuer), or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, or any violation by the Issuer of any rule or regulation promulgated
under the Securities Act applicable to the Issuer and relating to action or
inaction required in connection with such registration, unless (i) such untrue
statement or omission or alleged untrue statement or omission was made in such
registration statement, preliminary or amended preliminary prospectus, or
prospectus in reliance upon and in conformity with information furnished in
writing to the Issuer in connection therewith by the Investor, any such
underwriter or any such controlling person expressly for use therein, or unless
(ii) in the case of a sale directly by such holder of Registrable Shares
(including a sale of such Registrable Shares through any underwriter retained by
such holder of Registrable Shares to engage in a distribution solely on behalf
of such holder of Registrable Shares), such untrue statement or alleged untrue
statement or omission or alleged omission was contained in a preliminary
prospectus and corrected in a final or amended prospectus, and the Investor
failed to deliver a copy of the final or amended prospectus at or prior to the
confirmation of the sale of the Registrable Shares to the person asserting any
such loss, claim, damage or liability in any case where such delivery is
required by the Securities Act. Promptly after receipt by the Investor, any
underwriter or any controlling person of notice of the commencement of any
action in respect of which indemnity may be sought against the Issuer, the
Investor, or such underwriter or such controlling person, as the case may be,
will notify the Issuer in writing of the commencement thereof, and, subject to
the provisions hereinafter stated, the Issuer shall assume the defense of such
action (including the employment of counsel, who shall be counsel reasonably
satisfactory to the Investor, such underwriter or such controlling person, as
the case may be), and the payment of expenses insofar as such action shall
relate to any alleged liability in respect of which indemnity may be sought
against the Issuer. The Investor, any such underwriter or any such controlling
person 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 not be
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at the expense of the Issuer unless the employment of such counsel has been
specifically authorized in writing by the Issuer. The Issuer shall not be liable
to indemnify any person for any settlement of any such action effected without
the Issuer's written consent. The Issuer shall not, except with the approval of
each party being indemnified under this Section 4, 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 the parties being so
indemnified of a release from all liability in respect to such claim or
litigation.
5. Indemnification of the Issuer. In the event that the Issuer
registers any of the Registrable Shares under the Securities Act, the Investor
will indemnify and hold harmless the Issuer, each of its directors, each of its
officers who have signed the registration statement, each underwriter of the
Registrable Shares so registered (including any broker or dealer through whom
such of the shares may be sold) and each Person, if any, who controls the Issuer
within the meaning of Section 15 of the Securities Act from and against any and
all losses, claims, damages, expenses or liabilities, joint or several, to which
they or any of them may become subject under the Securities Act or under any
other statute or at common law or otherwise, and, except as hereinafter
provided, will reimburse the Issuer and each such director, officer, underwriter
or controlling person for any legal or other expenses reasonably incurred by
them or any of them in connection with investigating or defending any actions
whether or not resulting in any liability, insofar as such losses, claims,
damages, expenses, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
registration statement, in any preliminary or amended preliminary prospectus, or
in the prospectus (or the registration statement or prospectus as from time to
time amended or supplemented), or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, but only
insofar as any such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Issuer in connection
therewith by the Investor expressly for use therein; provided, however, that the
Investor's obligations hereunder shall be limited to an amount equal to the
proceeds to such holder of the Registrable Shares sold in such registration.
Promptly after receipt of notice of the commencement of any action in respect of
which indemnity may be sought against the Investor, the Issuer will notify the
Investor in writing of the commencement thereof; and the Investor shall, subject
to the provisions hereinafter stated, assume the defense of such action
(including the employment of
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counsel, who shall be counsel reasonably satisfactory to the Issuer) and the
payment of expenses insofar as such action shall relate to the alleged liability
in respect of which indemnity may be sought against the Investor. The Issuer and
each such director, officer, underwriter or controlling person 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 not be at the
expense of the Investor unless employment of such counsel has been specifically
authorized in writing by the Investor. The Investor shall not be liable to
indemnify any person for any settlement of any such action effected without the
Investor's written consent. The Investor shall not, except with the approval of
each party being indemnified under this Section 5, 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 the parties being so
indemnified of a release from all liability in respect to such claim or
litigation.
6. Damages. The Issuer recognizes and agrees that the Investor
will not have an adequate remedy if the Issuer fails to comply with any of the
provisions of this Agreement, and that damages will not be readily
ascertainable, and that, in the event of such failure, the Investor or any other
person entitled to the benefits of any of the provisions of this Agreement shall
be entitled to seek specific performance of any and all provisions hereof or
entry of an order enjoining the Issuer from continuing to commit any such breach
of any of the provisions of this Agreement.
7. Further Obligations of the Issuer. Whenever under the preceding
sections of this Agreement, the Issuer is required hereunder to register
Registrable Shares, it agrees that it shall also do the following:
(a) Furnish to each selling holder such copies of each
preliminary and final prospectus and such other documents as said holder may
reasonably request to facilitate the public offering of its Registrable Shares;
(b) Use its best efforts to register or qualify the Registrable
Shares covered by said registration statement under the applicable securities or
"blue sky" laws of such jurisdictions as the underwriter for the offering may
reasonably request, or, if there is no underwriter, in such states as the Issuer
and the selling holder shall mutually determine to be reasonably required to
accomplish the proposed distribution; provided, however, that the Issuer shall
not be obligated to qualify to do business in any jurisdiction where it is not
then so qualified or take any action which would subject it to the service of
process in suits other than those
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arising out of the offer or sale of the securities covered by the registration
statement in any jurisdiction where it is not then so subject.
(c) Furnish to each selling holder a signed counterpart of:
(i) an opinion of counsel for the
Issuer, dated the effective date of the registration
statement, and
(ii) "comfort" letters signed by the Issuer's
independent public accountants who have examined and
reported on the Issuer's financial statements
included in the registration statement, to the extent
permitted by the standards of the American Institute
of Certified Public Accountants,
covering substantially the same matters with respect to the registration
statement (and the prospectus included therein) and (in the case of the
accountants' "comfort" letters) with respect to events subsequent to the date of
the financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' "comfort" letters delivered to the underwriters in
underwritten public offerings of securities, to the extent that the Issuer is
required to deliver or cause the delivery of such opinion or "comfort" letters
to the underwriters in an underwritten public offering of securities;
(d) Subject to execution by them of mutually acceptable
confidentiality agreements as to matters deemed by the Issuer to be confidential
or proprietary, permit each selling holder or its counsel or other
representative to inspect and copy such corporate documents and records as may
reasonably be requested by them in connection with participation by such selling
holder pursuant to this Agreement;
(e) Furnish to each selling holder a copy of all documents
filed and all correspondence dispatched from or to the Securities and Exchange
Commission in connection with any such offering; and
(f) Use its best efforts to insure the obtaining of all
necessary approval from the National Association of Securities Dealers, Inc.
8. Expenses. In the case of a registration under Section 1 or the
first registration under Section 2, the Issuer shall bear all registration
costs and expenses of each such registration, including, but not limited to,
printing, legal and accounting expenses, Securities and Exchange
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Commission filing fees and "blue sky" fees and expenses; provided, however, that
in the case of the second registration under Section 2 and with respect to
Section 1, in the case of registration in which the Issuer is not registering
any shares for its own account, the selling holder or holders (including the
Investor if the Investor is a selling holder) shall bear all such costs and
expenses, exclusive, in each case, of the cost of any year end audit of the
Issuer's financial statements and exclusive of any compensation of directors,
officers or employees of the Issuer, all of which shall be borne entirely by the
Issuer; provided, further, that the Issuer shall have no obligation to pay or
otherwise bear (a) any portion of the underwriters' commissions or discounts
attributable to the Registrable Shares being offered and sold by the Investor or
(b) any portion of the costs and expenses of legal counsel, if any, for the
Investor and/or selling holders.
9. Exception. The Issuer shall not be required to effect a
registration under this Agreement if, in the written opinion of counsel for the
Issuer, which counsel and the opinion so rendered shall be reasonably acceptable
to the Investor, the Investor may sell, without registration under the
Securities Act, all Registrable Shares for which it had requested registration
under the provisions of the Securities Act in the quantity in which the
Registrable Shares were proposed to be sold.
10. Transfer of Registration Rights. The registration rights of the
Investor herein granted to the Investor pursuant to this Agreement may be
transferred to any transferee of Registrable Shares who is an affiliate of
the Investor, as that term is defined in the Securities Act.
11. Miscellaneous.
(a) No Waiver; Cumulative Remedies. No single or partial
exercise of any such right, power or remedy hereunder shall operate so as to
preclude the further exercise thereof or the exercise of any other right, power
or remedy hereunder, unless otherwise provided in this Agreement. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
(b) Amendments, Waivers and Consents. Except as otherwise
expressly provided in this Agreement, changes in or additions to this Agreement
may be made, and compliance with any covenant or provision herein or therein set
forth may be omitted or waived, so long as the parties so agree in writing. Any
waiver or consent may be given subject to satisfaction of conditions stated
therein and any waiver or consent shall be effective only to the extent
expressly set forth therein.
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(c) Addresses for Notices. All notices, requests, demands and
other communications provided for hereunder shall be in writing (including
electronic facsimile transmission) and mailed, telecopied or personally
delivered to the applicable party at the addresses indicated below:
If to the Issuer:
Cadus Pharmaceutical Corporation
000 Xxx Xxx Xxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: President
Fax No.: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Fax No.: (000) 000-0000
If to the Investor:
SmithKline Xxxxxxx Corporation
000 Xxxxxxxxx Xxxx
Xxxx xx Xxxxxxx, XX 00000
Attention: Dr. Xxxx Xxxxxx
Fax No.: (000) 000-0000
with a copy to:
SmithKline Xxxxxxx Corporation
One Franklin Plaza (FP2225)
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Fax No.: (000) 000-0000
Either party may change its address by written notice to the other party
complying as to delivery with the terms of this Section. All such notices,
requests, demands and other communications shall, when telecopied or personally
delivered, respectively, be effective when received or when delivery is refused
and shall be effective on the third business day after the date mailed.
(d) Binding Effect; Assignment. Except as otherwise
specifically provided for herein, this Agreement shall be binding upon and
inure to the benefit of the Issuer, the Investor and their respective
successors and permitted assigns.
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(e) Severability. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with, the laws of the State of New York without giving
effect to principles of conflict of laws.
(g) Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
(h) Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument, and either of the parties hereto may execute this
Agreement by signing any such counterpart.
IN WITNESS WHEREOF, the Issuer and the Investor have caused
this Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
Cadus Pharmaceutical Corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
SmithKline Xxxxxxx Corporation
By: /s/ Xxxx-Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxx-Xxxxxx Xxxxxxx
Title: Chief Operating Officer
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