1
EXHIBIT 10.1
LIFE SCIENCES RESEARCH, INC.
PMB #251
000 XXXX XXXXXXX XXXXXX
XXXXXXXXX, XX 00000-0000
FACSIMILE NO.: (000) 000-0000
FORM OF SUBSCRIPTION AND INVESTOR RIGHTS AGREEMENT
OCTOBER 9, 2001
2
TABLE OF CONTENTS
Page
Section 1 Subscription and Issuance of Membership Interest .................... 1
1.1 Subscription .......................................................... 1
1.2 Closing of Issuance and Purchase ...................................... 1
1.3 Transfer and Issue Taxes .............................................. 1
Section 2 Representations and Warranties ...................................... 1
2.1 Representations and Warranties of the Company ......................... 1
2.2 Representations and Warranties of the Investor ........................ 3
Section 3 Restrictions on Transferability of Securities; Registration Rights .. 5
3.1 Restrictions on Transfer .............................................. 5
3.2 Piggyback Registration Rights ......................................... 7
3.3 Expenses of Registration .............................................. 8
3.4 [Reserved.] ........................................................... 8
3.5 Registration Procedures ............................................... 8
3.6 Indemnification ....................................................... 9
3.7 Information by Holder ................................................. 11
3.8 Limitations on Subsequent Registration Rights ......................... 11
3.9 Rule 144 Reporting .................................................... 11
3.10 Transfer or Assignment of Rights ...................................... 12
3.11 Lock-Up Agreement ..................................................... 12
3.12 Allocation of Registration Opportunities .............................. 12
3.13 Delay of Registration ................................................. 13
3.14 Termination of Registration Rights .................................... 13
Section 4 Covenants ........................................................... 13
4.1 Financial Information ................................................. 13
4.2 Other Reports ......................................................... 15
4.3 Inspection ............................................................ 15
4.4 Compliance with Applicable Laws ....................................... 15
4.5 Confidentiality ....................................................... 16
4.6 Liquidation; Dissolution .............................................. 16
4.7 Exchange Offer Statements ............................................. 16
Section 5 Conditions to Closing; Closing ...................................... 16
5.1 Conditions to Company's Obligations ................................... 16
5.2 Conditions to Investor's Obligations .................................. 17
5.3 Closing ............................................................... 17
6.2 Amendment ............................................................. 20
6.3 Notices ............................................................... 21
6.4 Governing Law ......................................................... 21
6.5 Successors and Assigns ................................................ 21
6.6 Entire Agreement ...................................................... 21
i
3
6.7 Delays or Omissions ................................................... 22
6.8 Severability .......................................................... 22
6.9 Titles and Subtitles .................................................. 22
6.10 Counterparts .......................................................... 22
6.11 Telecopy Execution and Delivery ....................................... 22
6.12 Jurisdiction; Venue ................................................... 22
6.13 Further Assurances .................................................... 23
ii
4
LIFE SCIENCES RESEARCH, INC.
FORM OF SUBSCRIPTION AND INVESTOR RIGHTS AGREEMENT
This Subscription and Investor Rights Agreement (this "AGREEMENT"),
dated October 9, 2001 (the "EFFECTIVE DATE"), is entered into by and among Life
Sciences Research, Inc., a Maryland corporation (the "COMPANY"), and Xxxxxx
Xxxxxxx (the "INVESTOR"). Capitalized terms used in this Agreement are defined
in Section 6.1.
RECITALS
The Company desires to issue and sell to the Investor, and the
Investor desires to subscribe for and purchase 99,900 shares of voting common
stock of the Company, par value $0.01 (the "VOTING COMMON STOCK"), on the terms
and conditions set forth in this Agreement.
In consideration of the mutual promises and covenants set forth in
this Agreement, the Parties agree as follows:
SECTION 1
SUBSCRIPTION AND ISSUANCE OF MEMBERSHIP INTEREST
1.1 Subscription. The Investor hereby subscribes for, and agrees to
purchase, and the Company hereby agrees to issue and sell, 99,900 shares of
Voting Common Stock (such shares being hereinafter referred to as the "SHARES")
at the Closing for $1.50 per share and an aggregate purchase price equal to
$149,850 (the "PURCHASE PRICE").
1.2 Closing of Issuance and Purchase. On the Closing Date, the
Company shall deliver to the Investor a certificate representing 99,900 Shares
against payment of the Purchase Price by wire transfer of immediately available
funds to an account designated in writing by the Company.
1.3 Transfer and Issue Taxes. The Company shall pay the appropriate
taxation authority (as may be required by law) any Taxes, however designated or
levied (including any stamp or similar tax that may be imposed after the date
hereof), arising as a result of the issuance of the Shares or payable in respect
of the Purchase Price.
SECTION 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Company. The Company
hereby represents and warrants to the Investor as of the date hereof and as of
the Closing Date as follows:
(a) Organization; Good Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization. As of the Closing Date, the Organizational
Documents attached hereto as Exhibit A will be true and complete copies of and
represent the Company's certificate of incorporation and bylaws,
5
including all amendments thereto. The Company has all necessary corporate power,
authority and capacity to carry on its business as currently conducted.
(b) Capitalization. After giving effect to the Closing and the
closing of the transactions contemplated by Section 1.1 of the Subscription and
Investor Rights Agreement between the Company, the Investor and the other
signatories thereto of even date herewith, but before giving effect to the
Exchange Offer, there will be (i) 50,000,000 shares of Voting Common Stock of
the Company, authorized, of which 100,000 will be issued and outstanding, (ii)
5,000,000 shares of non-voting common stock, par value $0.01 per share (the
"NON-VOTING COMMON STOCK"), authorized, of which 900,000 shares will be issued
and outstanding and (iii) 5,000,000 shares of preferred stock of the Company,
par value $0.01 per share (the "PREFERRED STOCK"), authorized, of which no
shares will be issued and outstanding; all of the shares of Voting Common Stock
and Non-Voting Common Stock will be, when issued, duly authorized, validly
issued and fully paid and nonassessable. As of the date hereof, no rights,
options, warrants, convertible instruments or other securities or subscription
rights convertible into, or exchangeable or exercisable for, membership or other
equity interests in the Company are outstanding, subject to the terms and
conditions of the Exchange Offer.
(c) Authorization; Enforceability. The Company has all
necessary corporate power, authority and capacity to enter into this Agreement
and to perform its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of the Company.
This Agreement has been duly and validly executed and delivered by the Company,
and assuming this Agreement has been duly authorized, executed and delivered by
the Investor, constitutes a valid and binding obligation of the Company and is
enforceable against it in accordance with its terms, except that such
enforcement may be subject to (i) any bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other laws, now or hereafter in effect,
relating to or limiting creditors' rights generally and (ii) equitable defenses,
including, without limitation, the remedy of specific performance and injunctive
and other forms of equitable relief, and the discretion of the court before
which any proceeding therefor may be brought.
(d) Issuance of Shares. The Shares will, upon issuance to the
Investor against payment of the Purchase Price, be duly authorized, validly
issued and fully paid and non-assessable. Upon payment of the Purchase Price,
the Investor will acquire good and valid title to the number of Shares, free and
clear of all liens, pledges, claims, charges, preemptive rights or encumbrances
of any kind.
(e) Absence of Conflicting Agreement. The Company is not a
party to, bound or affected by or subject to any indenture, mortgage, lease,
agreement, instrument, provision of its Organizational Documents, statute,
regulation, order, judgment, decree or law which would be violated, contravened,
breached by, or under which any default would occur as a result of, the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(f) Securities Laws. The offering, issuance and delivery of
the Shares are exempt from the registration or prospectus requirements of the
securities laws of applicable
2
6
jurisdictions, and it is not necessary to make or obtain any filings,
registrations, qualifications, notifications or consents or approvals of or with
any Governmental Authority in any applicable jurisdiction in connection
therewith.
(g) Use of Proceeds. The Company will apply the proceeds of
the issuance and sale of the Shares pursuant to this Agreement for general
corporate purposes and to cover expenses relating to the Exchange Offer.
(h) Exchange Offer Documents. The drafts of the Form S-4 and
other documents related to the Exchange Offer that have been provided to the
Investor and identified by reference to this Agreement (collectively, the
"EXCHANGE OFFER DOCUMENTS") did not, and the final forms of the Exchange Offer
Documents to be filed with the Commission will not when filed, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances in which they were made not misleading. Each of the balance
sheets included in the Exchange Offer Documents (including the related notes and
schedules) presents fairly, or will present fairly, in all material respects,
the financial position of the Company or Huntingdon and its subsidiaries, as the
case may be, as of its date and each of the statements of income and changes in
shareholders' equity and in cash flows included in the Exchange Offer Documents
(including any related notes and schedules) presents fairly, or will present
fairly, the results of operations and cash flows, as the case may be, of the
Company or Huntingdon and its subsidiaries, as the case may be, for the periods
set forth therein (subject, in the case of unaudited statements, to the notes
and normal year-end audit adjustments that will not be material in amount or
effect), in each case in accordance with generally accepted accounting
principles in the United States ("U.S. GAAP") consistently applied during the
periods indicated, except as may be noted therein and except, with respect to
unaudited statements as permitted by the Commission.
2.2 Representations and Warranties of the Investor. The Investor,
hereby represents and warrants to the Company as of the date hereof and as of
the Closing Date as follows:
(a) Formation; Good Standing. The Investor is a natural person
who (i) has current net worth or joint net worth with his spouse in excess of $1
million or (ii) had an individual income in excess of $200,000 in each of the
two most recent years or joint income with his spouse in each of these years in
excess of $300,000 and reasonably expects to achieve such income level in the
current year.
(b) Authorization; Enforceability. The Investor has all
necessary power, authority and capacity to enter into this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of the Investor. This Agreement
has been duly and validly executed and delivered by the Investor, and assuming
this Agreement has been duly authorized, executed and delivered by the Company,
constitutes a valid and binding obligation of the Investor and is enforceable
against him in accordance with its terms, except that such enforcement may be
subject to (i) any bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other laws, now or hereafter in effect, relating to or
limiting creditors' rights generally and (ii) equitable defenses, including,
3
7
without limitation, the remedy of specific performance and injunctive and other
forms of equitable relief, and the discretion of the court before which any
proceeding therefor may be brought.
(c) Absence of Conflicting Agreement. The Investor is not a
party to, bound or affected by or subject to any indenture, mortgage, lease,
agreement, instrument, provision of its organizational documents, statute,
regulation, order, judgment, decree or law which would be violated, contravened,
breached by, or under which any default would occur as a result of, the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(d) Accredited Investor. The Investor is an "accredited
investor" as defined in Rule 501 of Regulation D promulgated under the
Securities Act.
(e) Investment Purpose. The Investor is acquiring the Shares
for investment only for his own account, not as a nominee or agent, and not with
a view to the sale or distribution of all or any portion thereof, and the
Investor has no present intention of selling or engaging in any public
distribution of the same, except pursuant to a registration or exemption from
registration under the Securities Act.
(f) Financial Risk. The Investor has substantial experience in
investing in and evaluating private placement transactions of securities in
companies similar to the Company and is capable of evaluating the risks and
merits of his investment in the Company and has the capacity to protect his own
interests. The Investor is able to bear the economic risks of his investment in
the Shares indefinitely. The Investor understands that no public market now
exists for the Shares and that it is uncertain whether a public market will ever
exist for the Shares.
(g) Private Issue. The Investor has been advised that the
Shares have not been registered under the Securities Act or qualified under any
state securities laws on the ground that the issuance contemplated by Section
1.1 of this Agreement will be exempt from the registration and qualification
requirements thereof and, therefore, the Shares cannot be resold, transferred,
offered for sale, pledged, hypothecated or otherwise disposed of unless they are
registered under the Securities Act and may not be resold, transferred, offered
for sale, pledged, hypothecated or otherwise disposed of without qualification,
or unless exemptions from registration and qualification are available.
(h) Access to Information. The Investor has been afforded (i)
the opportunity to ask such questions as he has deemed necessary of, and to
receive answers from, representatives of the Company concerning an investment in
the Shares and the merits and risks of investing in the Shares and (ii) such
access to information about the Company and the Company's financial condition,
business, results of operations and prospects as he has requested to evaluate
his investment in the Shares. The Investor acknowledges that all such questions
have been answered and all such access has been provided to his full
satisfaction.
(i) Irrevocable Subscription. The Investor agrees that the
subscription contemplated by this Agreement shall be irrevocable and shall
survive his disability, incapacity or death.
4
8
SECTION 3
RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; REGISTRATION RIGHTS
3.1 Restrictions on Transfer.
(a) Each Holder agrees not to make any disposition of all or
any portion of the Registrable Securities unless and until one of the conditions
set forth in clauses (i) and (ii) below has been satisfied. Any attempted
disposition not made in compliance with this Section 3 shall be null and void,
and the Company shall not in any way give effect to such disposition.
(i) A registration statement under the Securities Act
covering such proposed disposition must then be in effect and such disposition
must be made in accordance with such registration statement; or
(ii) (A) A Holder shall have (x) notified the Company in
writing of the proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed disposition and
(y) 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 and (B) the transferee shall have agreed in writing for
the benefit of the Company to be bound by this Section 3.1.
Notwithstanding the conditions contained in Section 3.1(a)(i) and Section
3.1(a)(ii), no such registration statement or opinion of counsel shall be
necessary for a transfer by a Holder (I) to the Holder's family members or a
trust for the benefit of an individual Holder or such Holder's family members;
or (II) intended as a bona fide gift made by such Holder; provided that in each
case, (x) the Holder shall provide written notice to the Company of such
transfer or gift and (y) the transferee shall have agreed in writing for the
benefit of the Company to be bound by this Section 3.1.
(b) Each Holder agrees not to make any disposition of all or
any portion of such Holder's Registrable Securities, (other than in a sale of
Registrable Securities in a registered public transaction in a securities market
in which the Registrable Securities are traded) to a proposed transferee who
after such transfer would be the owner of 5% or more of any class of the
Company's capital stock as determined under Maryland law (a "5% HOLDER"), and
who was not a 5% Holder before such transfer, unless and until such Holder shall
have (i) notified the Company in writing of the proposed disposition and shall
have furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition (including, without limitation, the
identity of and background information regarding any 5% Holder and (ii) received
a written notice from the Company approving such disposition; provided that the
approval of the Company shall only be withheld if, in the good faith judgment of
the Company's Board of Directors, there is a substantial risk that a 5% Holder
would use its resulting position as a shareholder of the Company to inflict harm
on any of the Company, its management, employees, shareholders, bankers or
advisors.
5
9
(c) Each certificate representing Registrable Securities shall
(unless otherwise permitted by the provisions of this Agreement) be stamped or
otherwise imprinted with a legend substantially similar to the following (in
addition to any legend required under applicable state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AS AMENDED (THE "ACT"), AND MAY NOT BE
OFFERED, SOLD, OR OTHERWISE TRANSFERRED, PLEDGED, OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
SUCH OFFER, SALE, OR OTHER TRANSFER, PLEDGE, OR HYPOTHECATION
OTHERWISE COMPLIES WITH THE ACT.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP
PERIOD OF UP TO 180 DAYS AFTER THE EFFECTIVE DATE OF A REGISTRATION
STATEMENT OF THE COMPANY FILED UNDER THE ACT, AND FURTHER
RESTRICTIONS SET FORTH IN A SUBSCRIPTION AND INVESTOR RIGHTS
AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THESE
SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF
THE COMPANY. SUCH LOCK-UP PERIOD IS BINDING ON TRANSFEREES OF THESE
SHARES.
(d) At the request of a Holder, the Company shall be obligated
to promptly re-issue certificates without the legends specified above if the
Holder shall have (i) obtained and delivered to the Company an opinion of
counsel (which counsel may be counsel to the Company) reasonably satisfactory to
the Company to the effect that the securities proposed to be disposed of may
lawfully be so disposed of without registration, qualification, or legend, and
(ii) delivered such securities to the Company or its transfer agent.
(e) Any legend endorsed on a certificate pursuant to
applicable state securities laws and the stop-transfer instructions with respect
to such securities shall be removed upon the Company's receipt of an order of
the appropriate blue sky authority authorizing such removal.
6
10
3.2 Piggyback Registration Rights.
(a) If the Company determines to register any of the Company's
securities either for the Company's own account or the account of a security
holder or holders exercising their respective demand registration rights, other
than a registration relating solely to employee benefit plans or a registration
relating solely to a corporate reorganization or other transaction on Form S-4
or similar forms that may be promulgated in the future, then the Company will:
(i) promptly give to each Holder written notice thereof
at least 20 days before filing any such registration statement; and
(ii) use its commercially reasonable efforts to include
in such registration (and any related qualification under blue sky laws or other
compliance), except as set forth in Section 3.2(b), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made by any Holder and received by the Company within 20 days after
the written notice from the Company described in clause (i) above is delivered
by the Company. Such written request may specify all or a part of a Holder's
Registrable Securities. If a Holder decides not to include all of such Holder's
Registrable Securities in such registration statement, then such Holder shall
continue to have the right to include any Registrable Securities held by it in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of the Company's securities, all upon
the terms and conditions set forth herein.
(b) Underwriting. If the registration for which the Company
gives notice is for a registered public offering involving an underwriting, then
the Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3.2(a)(i). In such event, the right of any Holder to
registration pursuant to this Section 3.2 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their Registrable Securities through such
underwriting shall (together with the Company and the other holders of
securities of the Company with registration rights to participate therein
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company.
Notwithstanding any other provision of this Section 3.2, if the underwriters'
representative advises the Company in good faith and in writing (which notice
the Company, in turn, shall promptly provide to all Holders requesting
registration) that marketing factors require a limitation on the number of
shares to be underwritten, then the representative may (subject to the
limitations set forth below) exclude all Registrable Securities from, or limit
the number of Registrable Securities to be included in, the registration and
underwriting. The Company shall so advise all holders of securities requesting
registration, and the number of shares of securities that are entitled to be
included in the registration and underwriting shall be allocated first, to the
Company for securities being sold for the Company's own account and thereafter,
as set forth in Section 3.12. If any Person does not agree to the terms of any
such underwriting, then such Person shall be excluded from the underwriting by
written notice from the Company or the underwriter. Any Registrable Securities
or other securities excluded or withdrawn from such
7
11
underwriting in accordance with the terms hereof shall be withdrawn from such
registration. To facilitate the allocation of shares in accordance with the
foregoing provisions, the Company or the underwriter(s) may round the number of
shares allocated to any Holder to the nearest 100 shares.
If shares are excluded because a Person does not agree to the terms
of any such underwriting, then the Company shall offer to all Persons who have
retained the right to include securities in the registration the right to
include additional securities in the registration in an aggregate amount equal
to the number of shares so excluded, with such shares to be allocated among the
Persons requesting additional inclusion in accordance with Section 3.12.
(c) Right to Terminate Registration. The Company shall have
the right to terminate or withdraw any registration initiated by the Company
under this Section 3.2 before the effectiveness of such registration whether or
not any Holder has elected to include Registrable Securities in such
registration.
3.3 Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification, or compliance pursuant to
Section 3.2 shall be borne by the Company. All Selling Expenses relating to
Registrable Securities so registered shall be borne by the Holders of such
Registrable Securities pro rata on the basis of the number of shares of
Registrable Securities so registered on their behalf, as shall any other
expenses in connection with the registration required to be borne by the Holders
of such securities.
3.4 [Reserved.]
3.5 Registration Procedures. In the case of each registration
effected by the Company pursuant to this Section 3, the Company will keep each
Holder advised in writing as to the initiation of each registration and as to
the completion thereof. At the Company's expense, the Company will use its
commercially reasonable efforts to:
(a) keep such registration effective for a period of 60 days
or until the Holder or Holders have completed the distribution described in the
registration statement relating thereto, whichever occurs first;
(b) prepare and file with the Commission 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 such number of prospectuses, including preliminary
prospectuses, and other documents incident thereto, including any amendment or
supplement to the prospectus, as a Holder from time to time may reasonably
request;
(d) cause all such Registrable Securities registered pursuant
under this Agreement to be listed on each securities exchange on which similar
securities issued by the Company are then listed or eligible for quotation on
the over-the-counter bulletin boards, as the case may be;
8
12
(e) use commercially reasonable efforts to register and
qualify the securities covered by such registration statement under such other
securities laws 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; and
(f) 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 occurrence of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of material fact or omits to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
3.6 Indemnification.
(a) (i) The Company will indemnify each Holder, each of its
officers, directors, partners, members, legal counsel, and accountants and each
person controlling such Holder within the meaning of Section 15 of the
Securities Act, with respect to which registration, qualification, or compliance
has been effected pursuant to this Section 3, and each underwriter, if any, and
each person who controls within the meaning of Section 15 of the Securities Act
any underwriter, against all expenses (including any legal or other expenses
reasonably incurred in connection with investigating and defending or settling
any such claim, loss, damage, liability, or action), claims, losses, damages,
and liabilities (or actions, proceedings, or settlements in respect thereof)
(collectively, the "LOSSES") arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any document relating
to the Exchange Offer (including, without limitation, the Form S-4),
registration statement, prospectus (including any preliminary prospectus),
offering circular, or other document incident to any such registration,
qualification, or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by the Company or
Huntingdon of the Securities Act or any rule or regulation thereunder applicable
to the Company or Huntingdon and relating to action or inaction required of the
Company or Huntingdon in connection with any such registration, qualification,
or compliance; provided that the Company will not be liable in any such case to
the extent that any such Loss arises out of or is based on any untrue statement
or omission based upon written information furnished to the Company by such
Holder or underwriter and stated to be specifically for use therein. The
indemnity agreement contained in this Section 3.6(a) shall not apply to amounts
paid in settlement of any such Loss if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld).
(ii) The Company will indemnify the Investor and each of
his respective officers, directors, partners, members, legal counsel and
accountants against any Losses arising out of or based on (A) any breach of any
representation or warranty in this Agreement or in any certificate or Schedule
delivered by the Company pursuant hereto and (B) any breach or failure to
perform by the Company of any covenant, obligation or other agreement contained
in this Agreement.
9
13
(b) (i) Each Holder will, severally and not jointly, if
Registrable Securities held by such Holder are included in the securities as to
which such registration, qualification, or compliance is being effected,
indemnify the Company, each of its officers, directors, partners, members, legal
counsel, and accountants and each underwriter, if any, of the Company's
securities covered by such registration statement, each person who controls the
Company or such underwriter within the meaning of Section 15 of the Securities
Act, each other Holder and Other Stockholder, and each of their respective
officers, directors, partners, member, legal counsel and accountants, and each
person controlling such other Holder or Other Stockholder, against all Losses
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any document relating to the Exchange Offer
(including, without limitation, the Form S-4), registration statement,
prospectus (including any preliminary prospectus), offering circular, or other
document incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such document relating to the Exchange Offer (including, without
limitation, the Form S-4), registration statement, prospectus (including any
preliminary prospectus), offering circular, or other document incident to any
such registration, qualification or compliance in reliance upon and in
conformity with written information furnished to the Company by such Holder and
stated to be specifically for use therein; provided, however, that the
obligations of such Holder hereunder shall not apply to amounts paid in
settlement of any such Losses if such settlement is effected without the consent
of such Holder (which consent shall not be unreasonably withheld); and provided,
further, that in no event shall any indemnity under this Section 3.6(b)(i)
exceed the gross proceeds from the offering received by such Holder.
(ii) The Investor will indemnify the Company, each of
its directors, officers, partners, members, legal counsel and accountants
against any Losses arising out of or based on (i) any breach of any
representation or warranty in this Agreement or in any certificate or Schedule
delivered by the Investor pursuant hereto and (ii) any breach or failure to
perform by the Investor of any covenant, obligation or other agreement contained
in this Agreement.
(c) Each Party entitled to indemnification under this Section
3.6 (the "INDEMNIFIED PARTY") shall give notice to the Party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
be unreasonably withheld), and the Indemnified Party may participate in such
defense at the Indemnified Party's own expense; and provided, further, that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 3, to the
extent such failure is not materially prejudicial. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such
10
14
Indemnified Party of a release from all liability in respect of such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with defense of
such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 3.6 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any Loss referred to therein, then the Indemnifying Party,
in lieu of indemnifying such Indemnified Party hereunder, shall contribute to
the amount paid or payable by such Indemnified Party as a result of such Loss in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand, and of the Indemnified Party on the other,
in connection with the statements or omissions that resulted in such Loss as
well as any other relevant equitable considerations. The relative fault of the
Indemnifying Party and of the Indemnified Party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the Parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with an underwritten public offering are in
conflict with the provisions of this Section 3.6 (other than Section 3.6(a)(ii)
and Section 3.6(b)(ii)), the provisions in the underwriting agreement shall
control.
3.7 Information by Holder. Each Holder of Registrable Securities
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification, or compliance referred to in this Section 3.
3.8 Limitations on Subsequent Registration Rights. From and after
the date of this Agreement if the Company enters into any agreement with any
holder or prospective holder of any securities of the Company giving such holder
or prospective holder registration rights, the terms of which are in any respect
more favorable than the registration rights granted to the Holders hereunder,
then the registration rights granted to the Holders hereunder shall
automatically and without further action by the Company or the Holders be
amended so that they are as favorable in all such respects as the rights granted
to such other holder or prospective holder; and the Company shall give the
Holders prompt written notice of any such amendments.
3.9 Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission that may permit the sale of
the Restricted Securities to the public without registration, the Company agrees
to use its commercially reasonable efforts to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144, at all times after the effective date of
the first registration statement filed by the Company for an offering of the
Company's securities to the general public;
11
15
(b) file with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act at any time after the Company has become subject to such reporting
requirements; and
(c) so long as a Holder owns any Restricted Securities,
furnish to the Holder promptly upon written request (i) a written statement by
the Company as to the Company's compliance with the reporting requirements of
Rule 144 (at any time from and after 90 days following the effective date of the
first registration statement filed by the Company for an offering of its
securities to the general public) and of the Securities Act and the Exchange Act
(at any time after the Company has become subject to such reporting
requirements); (ii) a copy of the most recent annual or quarterly report of the
Company; and (iii) such other reports and documents so filed as a Holder may
reasonably request in availing itself of any rule or regulation of the
Securities Act allowing such Holder to sell any such securities without
registration.
3.10 Transfer or Assignment of Rights. The rights to cause the
Company to register securities granted to a Holder by the Company under this
Section 3 may be transferred or assigned by a Holder only to a transferee or
assignee who, after such transfer, holds at least 100,000 shares of Registrable
Securities (as presently constituted and subject to subsequent adjustments for
stock splits, stock dividends, reverse stock splits, and similar
reclassifications affecting the Company's equity securities); provided that (i)
such Holder gives the Company written notice at least 10 days prior to such
transfer or assignment, stating the name and address of the transferee or
assignee and identifying the securities with respect to which such registration
rights are being transferred or assigned and (ii) the Company provides such
Holder with written notice of its approval of such transfer or assignment within
10 days of its receipt of such notice; and, provided, further, that the
transferee or assignee of such rights assumes in writing the obligations of such
Holder under this Section 3.
3.11 Lock-Up Agreement. If requested by the Company and an
underwriter of securities of the Company, the Investor shall not sell or
otherwise transfer or dispose of any securities of the Company held by the
Investor (other than those included in the registration or in a transfer not
required to be registered under the Securities Act, as demonstrated by a written
legal opinion from counsel reasonably acceptable to the Company and to the
underwriter) during the 180-day period after the effective date of a
registration statement filed by the Company under the Securities Act for such
offering; provided that such restrictions are imposed on all other persons
holding securities of the Company that were acquired from the Company in
transactions not involving public offerings and in which such persons received
registration rights. The obligations described in this Section 3.11 shall not
apply to a registration relating solely to employee benefit plans, or a
registration relating solely to a corporate reorganization or other transaction
on Form S-4 or similar forms that may be promulgated in the future. The Company
may impose stop-transfer instructions and may stamp each such certificate with
the second legend set forth in Section 3.1(b) with respect to the shares of
securities subject to the foregoing restriction until the end of such 180-day
period. The Investor agrees to execute a market standoff agreement with such
underwriters in customary form consistent with the provisions of this Section
3.11.
3.12 Allocation of Registration Opportunities. If Holders exercise
registration rights under Section 3.2 and all of the Registrable Securities and
other shares of the Company's
12
16
Voting Common Stock (including shares of Voting Common Stock issued or issuable
upon conversion of shares of any currently unissued series of the Company's
Non-Voting Common Stock or Preferred Stock) with registration rights (such other
securities, the "OTHER SHARES") requested to be included in a registration on
behalf of the Holders or Other Stockholders cannot be so included as a result of
limitations of the aggregate number of shares of Registrable Securities and
Other Shares that may be so included, then the number of shares of Registrable
Securities that may be so included shall be allocated among the Holders and
Other Stockholders pro rata on the basis of the number of shares of Registrable
Securities and Other Shares that would be held by such Holders and Other
Stockholders, assuming conversion; provided, however, that if any Holder does
not request inclusion of at least the number of shares of Registrable Securities
allocated to such Holder or Other Stockholder pursuant to the foregoing
procedure, then the remaining portion of such Holder's or Other Stockholder's
allocation shall be reallocated among those requesting Holders or Other
Stockholders whose allocations did not satisfy their requests pro rata on the
basis of the number of shares of Registrable Securities and Other Shares that
would be held by such Holders and Other Stockholders , assuming conversion, and
this procedure shall be repeated until all of the shares of Registrable
Securities that may be included in the registration on behalf of the Holders and
Other Stockholders have been so allocated. The Company shall not limit the
number of Registrable Securities to be included in a registration pursuant to
this Agreement in order to include Other Shares or shares held by stockholders
with no registration rights or to include shares of stock held by other
employees, officers, directors, or consultants pursuant to any Company stock
option plan or otherwise.
3.13 Delay of Registration. No Holder shall have any right to take
any action to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Section 3.
3.14 Termination of Registration Rights. The right of any Holder to
request registration or inclusion in any registration pursuant to Section 3.2
shall terminate five years after the closing of the first registered public
offering.
SECTION 4
COVENANTS
The Company hereby covenants and agrees, as follows:
4.1 Financial Information. The Company shall maintain true books and
records of account in which full and correct entries will be made of all of the
Company's business transactions pursuant to a system of accounting established
and administered in accordance with U.S. GAAP consistently applied. The Company
will furnish the following reports to each Holder and Investor who owns at least
100,000 shares of Voting Common Stock, (as presently constituted and subject to
subsequent adjustments for stock splits, stock dividends, reverse stock splits,
and similar reclassifications affecting the Company's equity securities):
(a) as soon as practicable and in any event within 150 days
after the end of each fiscal year of the Company, an annual report of the
Company, including a consolidated balance sheet of the Company and its
subsidiaries, if any, as at the end of such fiscal year, and
13
17
the related consolidated statements of income, shareholders' equity and cash
flows of the Company and its subsidiaries, if any, for such year setting forth
in each case in comparative from the corresponding figures for the preceding
fiscal year and for the budget for the fiscal year just completed, prepared in
accordance with U.S. GAAP consistently applied, certified by independent public
accountants of recognized national standing selected by the Company (provided,
however, that information as to budgeted figures need not be audited), all of
which shall fairly present the financial condition of the Company as of the
dates shown and the results of operations for the periods then ended; the
Company shall also furnish the Investor with a copy, when available, of the
annual memorandum (and any interim related memoranda) on internal accounting
controls, as furnished by the independent public accountants;
(b) as soon as practicable and in any event within 45 days
after the end of the first, second, and third quarterly accounting periods in
each fiscal year of the Company, a consolidated balance sheet of the Company and
its subsidiaries, if any, as of the end of each such quarterly period, and the
related consolidated statements of income and cash flows of the Company and its
subsidiaries, if any, for such period setting forth in each case in comparative
from the corresponding figures for the corresponding quarter of the preceding
fiscal year and for the budget for the current fiscal year. Such reports shall
include an updated 12-month budget. All such reports shall be certified by the
chief financial officer of the Company to fairly present the financial condition
of the Company as of the dates shown and the results of its operations for the
periods then ended and (except for budget information) to have been prepared in
conformity with U.S. GAAP consistently applies except for normal, recurring,
year-end audit adjustments and the absence of footnotes;
(c) as soon as practicable and in any event within 30 days
after the end of each month, a monthly report of the Company consisting of an
unaudited balance sheet as of the end of such month and the related unaudited
statements of income and cash flows for such month and for the fiscal year to
date, setting forth in each case in comparative form the corresponding figures
for the corresponding fiscal month of the preceding fiscal year and for the
budget for the current fiscal year. Such report shall include an updated
12-month budget; all such reports shall be certified by the chief financial
officer of the Company to fairly present the financial condition of the Company
as of the dates shown and the results of its operations for the periods then
ended and (except for budget information) to have been prepared in conformity
with U.S. GAAP consistently applied except for normal, recurring, year-end audit
adjustments and the absence of footnotes; and
(d) (i) as soon as available and in any event within five days
after the filing of each of the Company's quarterly reports on Form 10-Q and
current reports on Form 8-K with the Commission, copies of each such reports;
and (ii) as soon as available and in any event within ten days after the filing
of each of the Company's annual reports on Form 10-K, including copies of the
Company's Annual Report to Shareholders and Proxy Statement, with the
Commission, copies of each of such reports.
Notwithstanding anything to the contrary in this Agreement, Section 4.1 shall
not be in effect at any time during which the Company has registered a class of
equity securities under the Exchange Act and is in compliance with all of its
periodic reporting requirements under the Exchange Act.
14
18
4.2 Other Reports. Subject to the right of any Holder or the
Investor to suspend or terminate its right to receive information under this
Section 4.2, the Company shall furnish to each Holder and the Investor:
(a) promptly after their preparation, copies of (i) any press
releases, financial statements or financial or other reports prepared by the
Company for or otherwise furnished to or filed with its stockholders, the
financial community or the media, or any lender to the Company, (ii) all
material communications with stockholders other than the Investor, and (iii) all
material communications with or from any Governmental Authority;
(b) promptly after their preparation, copies of any (i)
material report prepared by an outside consultant relating to the business of
the Company, (ii) notice of any material events relating to the Company and
(iii) material communications with or received from any companies interested in
acquiring the Company or forming a potential strategic relationship;
(c) to the extent prepared by the Company within 30 days prior
to the commencement of each fiscal year of the Company, (i) an annual operating
budget for the Company, approved by the Board of Directors of the Company, for
the succeeding fiscal year, containing projections of profit and loss, cash flow
and ending balance sheets for each month of such fiscal year, (ii) a business
plan for the Company relating to the succeeding fiscal year setting forth in
reasonable detail a development plan, financial plan and marketing plan,
budgeted and projected figures and other information and (iii) forecasts for the
following three fiscal years;
(d) to the extent prepared by the Company, any operating
budgets or business plans of the Company and any revisions of such previously
furnished budgets or business plans within 10 days of their acceptance by the
Board of Directors; such revised budgets or business plans to include an
explanation of the deviations from the previous budget; and
(e) to the extent prepared by the Company, promptly after such
preparation, documentation of material business transactions, projections,
operating reports and acquisition analyses; and
(f) from time to time, such additional information regarding
the financial position or business of the Company and its subsidiaries as any
Holder may reasonably request.
4.3 Inspection. The Investor shall, upon reasonable notice to the
Company, have the right to inspect books and corporate, financial and operating
records, contracts and agreements of the Company and make copies thereof or
abstracts therefrom, and to discuss its affairs, finances and accounts with its
directors, officers and independent public accountants, all at reasonable times
during normal business hours and as often as may be reasonably requested. The
costs of such inspection shall be borne by the Company.
4.4 Compliance with Applicable Laws. The Company shall comply in all
material respects with all applicable statutes, laws, ordinances, rules and
regulations of any Governmental Authority (whether now in effect or hereinafter
enacted) and any filing
15
19
requirements relating thereto including without limitation, the U.S. Foreign
Corrupt Practices Act, food and drug laws and environmental laws and
regulations. The Company shall do all things necessary to preserve, renew and
keep in full force and effect and in good standing its corporate existence and
authority necessary to continue its business.
4.5 Confidentiality. Each Holder and the Investor will (subject to
the Company's sole discretion to waive compliance and applicable legal
requirements) maintain as confidential any confidential or proprietary
information received from the Company (including, without limitation, any
information received pursuant to this Section 4) other than information which
(a) at the time of the disclosure or thereafter is generally available to and
known by the public, (b) is available to such Holder or the Investor on a
non-confidential basis from a source other than the Company or its subsidiaries
or (c) has been independently developed by such Holder or the Investor
(collectively, the "CONFIDENTIAL INFORMATION"); provided that the Holders and
the Investor may disclose such Confidential Information to their respective
advisors, representatives, agents, partners (and their representatives and
advisors) and counsel, so long as such Holders and the Investor are responsible
for any breach of this Section 4.5 by any such person. Each Holder and the
Investor agrees not to use the Confidential Information for any purposes other
than evaluating their investment in the Company. Notwithstanding anything to the
contrary in this Section 4, the Company may refuse to disclose Confidential
Information to a Holder or the Investor if it reasonably believes that there is
a material risk that such Holder or the Investor will breach its obligations
under this Section 4.5 or trade in the Company's securities while in possession
of material non-public information in violation of applicable securities laws .
4.6 Liquidation; Dissolution. If the Exchange Offer lapses, then the
Investor agrees to take and to cause the Company to take any and all necessary
action to liquidate and dissolve the Company pursuant to Section 3-403 of the
Maryland General Corporation Law, including, without limitation, the following
actions: (i) causing a majority of the Board of Directors of the Company to (A)
adopt a resolution declaring that the dissolution of the Company is advisable
and (B) direct that the proposed dissolution be submitted to a vote of the
stockholders of the Company; (ii) causing the Company to give the requisite
notice to each stockholder entitled to vote on the proposed dissolution; and
(iii) as stockholders of the Company, agreeing to affirmatively vote each of
their respective shares of capital stock of the Company in favor of such
proposed dissolution.
4.7 Exchange Offer Statements. LSR shall take, or cause to be taken,
all such further or other actions that are necessary in order to cause all the
statements in the Exchange Offer Documents regarding actions to be taken by LSR
to be true and correct in all material respects.
SECTION 5
CONDITIONS TO CLOSING; CLOSING
5.1 Conditions to Company's Obligations. The obligation of the
Company to issue the Shares is subject to the satisfaction (or express written
waiver of the Company) of the following conditions on or prior to the Closing
Date:
16
20
(a) Representations and Warranties. The representations and
warranties of the Investor contained in this Agreement shall be true and correct
in all material respects at and as of the date hereof and at and as of the
Closing Date with the same effect as though such representations and warranties
had been made at and as of such time, except to the extent such representations
and warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all material
respects at and as of such earlier date). The Investor shall have delivered to
the Company a certificate dated the Closing Date and signed by him confirming
the foregoing.
(b) Covenants and Agreements. The Investor shall have
performed or complied with in all material respects all covenants, agreements
and obligations required by this Agreement to be performed or complied with by
him on or before the Closing Date. The Investor shall have delivered to the
Company a certificate dated the Closing Date and signed by him confirming the
foregoing.
5.2 Conditions to Investor's Obligations. The obligation of the
Investor to subscribe for the Shares and pay the Purchase Price to the Company
is subject to the satisfaction (or express written waiver by each of the
Investor) of the following condition on or prior to the Closing Date: all
conditions to the Exchange Offer (other than the condition that the transaction
contemplated by this Agreement has become unconditional and been consummated)
shall have been satisfied or, in the case of conditions which may only be waived
with the consent of Huntingdon and Huntingdon's financial advisor, waived by
Huntingdon and Huntingdon's financial advisor, and the Company shall not have
waived any conditions to the Exchange Offer for the Company's benefit without
the Investor's consent.
5.3 Closing. The Company may deliver to the Investor a written
statement from Huntingdon's financial advisor that Huntingdon's financial
advisor believes it is probable that all conditions to the Exchange Offer (other
than the condition that the transactions contemplated by this Agreement have
become unconditional and been consummated) will be satisfied during a period
(the "Closing Period") of five business days or less beginning not less than
three business days following the date on which such letter is delivered to the
Investor. If he receives such a letter, the Investor shall deposit an amount
equal to the Purchase Price in an escrow account with the Company's attorneys
not later than the first day of the Closing Period. If all of the conditions to
Closing set forth in Section 5.1 and Section 5.2 of this Agreement (the
"SUBSCRIPTION AGREEMENT CONDITIONS OF CLOSING") are satisfied, fulfilled or, to
the extent permitted, waived during the Closing Period (as such Period may be
extended pursuant to this Section 5.3), the Closing shall occur immediately upon
the satisfaction, fulfillment or waiver of all the Subscription Agreement
Conditions of Closing, and the funds held in escrow shall be applied to the
payment of the Purchase Price. If the Subscription Agreement Conditions of
Closing are not satisfied during the Closing Period, there shall be one (and
only one) five-business day extension of the Closing Period; provided that on
the last day of the original Closing Period, the Company delivers to the
Investor a written statement from Huntingdon's financial advisor that
Huntingdon's financial advisor believes it is probable that all conditions to
the Exchange Offer (other than the condition that the transactions contemplated
by this Agreement have become unconditional and been consummated) will be
satisfied, fulfilled or, to the extent permitted, waived during the five
business days following the last day of the original Closing Period. If the
Closing does not occur during the Closing Period, as it may be extended, the
Investor may
17
21
remove the funds from such escrow account at the end of the Closing Period; and
in such event, the Closing shall take place with reasonable promptness after the
Subscription Agreement Conditions of Closing have been satisfied. The date on
which the Closing occurs shall be the "CLOSING DATE."
SECTION 6
MISCELLANEOUS
6.1 Certain Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below:
(a) "AFFILIATE" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under common control
with such Person.
(b) "AGREEMENT" is defined in the preamble to this Agreement.
(c) "CLOSING" means the closing of the transactions
contemplated by Section 1.1 of this Agreement.
(d) "CLOSING DATE" is defined in Section 5.3.
(e) "COMMISSION" means the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
(f) "COMPANY" is defined in the preamble to this Agreement.
(g) "CONFIDENTIAL INFORMATION" is defined in Section 4.5.
(h) "EFFECTIVE DATE" is defined in the preamble to this
Agreement.
(i) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended, or any similar successor federal statute and the rules and
regulations thereunder, all as shall be in effect from time to time.
(j) "EXCHANGE OFFER" means the exchange offer in which the
Company offers to exchange ordinary shares and ADSs of Huntingdon for shares of
Voting Common Stock in accordance with the terms set forth in the Form S-4.
(k) "EXCHANGE OFFER DOCUMENTS" is defined in Section 2.1(h).
(l) "5% HOLDER" is defined in Section 3.1(b).
(m) "FORM S-4" means the registration statement on Form S-4
filed by the Company with the Commission on [ ], 2001 in connection with the
Exchange Offer.
(n) "GOVERNMENTAL AUTHORITY" means any court, administrative
agency or commission or other governmental agency or instrumentality, domestic
or foreign, of competent jurisdiction.
18
22
(o) "HOLDER" means the Investor for so long as he holds
Registrable Securities and any holder of Registrable Securities to whom the
registration rights conferred by this Agreement have been transferred in
compliance with Section 3.1 and Section 3.10; and for purposes of this
definition, an Investor shall be deemed to hold shares of Voting Common Stock
issuable upon the conversion of Shares which such investor holds.
(p) "HUNTINGDON" means Huntingdon Life Sciences Group plc.
(q) "INDEMNIFIED PARTY" is defined in Section 3.6(c).
(r) "INDEMNIFYING PARTY" is defined in Section 3.6(c).
(s) "INVESTOR" is defined in the preamble to this Agreement.
(t) "LOSSES" is defined in Section 3.6(a)(i).
(u) "NON-VOTING COMMON STOCK" is defined in Section 2.1(b).
(v) "ORGANIZATIONAL DOCUMENTS" means the Amended and Restated
Certificate of Incorporation to be filed with the Secretary of State of State of
Maryland and the Bylaws of the Company, each as set forth in Exhibit A attached
hereto, as such documents may be from time to time, altered, amended, added to
or replaced pursuant to applicable law.
(w) "OTHER SHARES" is defined in Section 3.12.
(x) "OTHER STOCKHOLDERS" means persons other than Holders who,
by virtue of agreements with the Company, are entitled to include their
securities in certain registrations hereunder.
(y) "PARTIES" means the parties to this Agreement.
(z) "PERSON" means any natural person, corporation,
partnership, limited liability company, trust or other legal entity.
(aa) "PREFERRED STOCK" is defined in Section 2.1(b).
(bb) "PURCHASE PRICE" is defined in Section 1.1.
(cc) "REGISTRABLE SECURITIES" means (i) the Shares; (ii) the
shares of Voting Common Stock held by the Investor prior to the Closing; and
(iii) any Voting Common Stock issued as a dividend or other distribution with
respect to or in exchange for or in replacement of the shares referenced in (i)
or (ii) above; provided, however, that Registrable Securities shall in any event
not include any shares of Voting Common Stock which have previously been
registered or which have been sold to the public either pursuant to a
registration statement or Rule 144, or which have been sold in a private
transaction in which the transferor's rights under this Agreement are not
assigned.
19
23
(dd) "REGISTER," "REGISTERED," "REGISTRATION," and derivatives
thereof refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such registration statement.
(ee) "REGISTRATION EXPENSES" means all expenses incurred in
effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification, and filing fees, printing expenses,
escrow fees, fees and disbursements of the Company's counsel, blue sky fees and
expenses, and expenses of any regular or special audits incident to or required
by any such registration, but shall not include Selling Expenses, fees, and
disbursements of counsel for the Holders.
(ff) "RESTRICTED SECURITIES" means any Registrable Securities
required to bear the first legend set forth in Section 3.1(b).
(gg) "RULE 144" means Rule 144 under the Securities Act, as
such Rule may be amended from time to time, or any similar successor rule.
(hh) "SECURITIES ACT" means the Securities Act of 1933, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as in effect from time to time.
(ii) "SELLING EXPENSES" means all underwriting discounts,
selling commissions, and stock transfer taxes applicable to the sale of
Registrable Securities and fees and disbursements of counsel for any Holder
(other than the fees and disbursements of counsel included in Registration
Expenses).
(jj) "SHARES" is defined in Section 1.1.
(kk) "SUBSCRIPTION AGREEMENT CONDITIONS OF CLOSING" is defined
in Section 5.3.
(ll) "TAXES" means all taxes, imposts, rates, levies,
assessments and government fees or dues lawfully levied, assessed or imposed,
including income, sales, goods and services, excise, stamp, use, property,
capital, business transfer, withholding and value added taxes and/or other
duties.
(mm) "U.S. GAAP" is defined in Section 2.1(h).
(nn) "VOTING COMMON STOCK" is defined in the recitals to this
Agreement.
6.2 Amendment. Except as expressly provided herein, neither this
Agreement nor any term hereof may be amended, waived, discharged, or terminated
other than by a written instrument referencing this Agreement and signed by the
Company and the Investor. Any such amendment, waiver, discharge, or termination
effected in accordance with this Section 6.2 shall be binding upon the Investor
and each future holder of the Investor's securities. In the event that an
underwriting agreement contains terms differing from this Agreement, as to any
such Holder
20
24
or Investor, the terms of such underwriting agreement shall govern, except as
otherwise provided in this Agreement.
6.3 Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, sent by facsimile or otherwise delivered by
hand or by messenger addressed:
(a) if to the Investor, then to his address or facsimile
number, as shown in the Company's records, as may be updated in accordance with
the provisions hereof, with a copy (which shall not constitute notice) to such
counsel as the Investor may designate by written notice to the Company in
accordance with the provisions of this Section 6.3.
(b) if to any other holder of any Shares then to such address
or facsimile number, as shown in the Company's records, or, until any such
holder so furnishes an address or facsimile number to the Company, then to and
at the address of the last holder of such Shares for which the Company has
contact information in its records; or
(c) if to the Company, then one copy to the Company's address
or facsimile number set forth on the cover page of this Agreement and addressed
to the attention of the President, or at such other address or facsimile number
as the Company shall have furnished to the Investor, with a copy (which shall
not constitute notice) to such counsel as the Company may designate by written
notice to the Investor and any other holder of any Shares or the underlying
Voting Common Stock in accordance with the provisions of this Section 6.3.
With respect to any notice given by the Company under any provision
of the Delaware General Corporation Law or the Company's Organizational
Documents, and the Investor agrees that such notice may be given by facsimile.
Each such notice or other communication shall for all purposes of
this Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or 72
hours after such communication has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed and mailed as
set forth above or, if sent by facsimile, upon confirmation of facsimile
transfer.
6.4 Governing Law. This Agreement shall be governed in all respects
by the laws of the State of New York, without regard to principles of conflicts
of law.
6.5 Successors and Assigns. Except as specifically permitted by this
Agreement, this Agreement and any and all rights, duties, and obligations
hereunder, shall not be assigned, transferred, delegated, or sublicensed by the
Investor other than to an Affiliate without the prior written consent of the
Company. Any attempt by the Investor without such permission to assign,
transfer, delegate, or sublicense any rights, duties, or obligations that arise
under this Agreement shall be null and void. Subject to the foregoing and except
as otherwise provided herein, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the successors, assigns, heirs, executors,
and administrators of the Parties.
6.6 Entire Agreement. This Agreement and the schedules and exhibits
hereto constitute the full and entire understanding and agreement between the
Parties with regard to the
21
25
subjects hereof. No Party shall be liable or bound to any other Party in any
manner with regard to the subjects hereof by any warranties, representations, or
covenants except as specifically set forth herein.
6.7 Delays or Omissions. Except as expressly provided herein, no
delay or omission to exercise any right, power, or remedy accruing to any Party
upon any breach or default of any other Party under this Agreement shall impair
any such right, power, or remedy of such non-defaulting Party, nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring, nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default occurring before or after such waiver. Any waiver, permit,
consent, or approval of any kind or character on the part of any Party of any
breach or default under this Agreement, or any waiver on the part of any Party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
Party, shall be cumulative and not alternative.
6.8 Severability. Unless otherwise expressly provided herein, the
rights of the Investor hereunder are several rights, not rights jointly held
with any of the other Investor. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable, or void, this Agreement shall continue in full force and
effect without such provision, and the Parties agree to negotiate, in good
faith, a legal and enforceable substitute provision which most nearly effects
the Parties' intent in entering into this Agreement.
6.9 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. All references in this Agreement to
sections, paragraphs, and exhibits shall, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits attached hereto.
6.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the Parties that
execute such counterparts, and all of which together shall constitute one
instrument.
6.11 Telecopy Execution and Delivery. A facsimile, telecopy, or
other reproduction of this Agreement may be executed by one or more Parties, and
an executed copy of this Agreement may be delivered by one or more Parties by
facsimile or similar electronic transmission device pursuant to which the
signature of or on behalf of such Party can be seen, and such execution and
delivery shall be considered valid, binding, and effective for all purposes. At
the request of any Party, all Parties agree to execute an original of this
Agreement as well as any facsimile, telecopy, or other reproduction hereof.
6.12 Jurisdiction; Venue. With respect to any disputes arising out
of or related to this Agreement, the Parties consent to the exclusive
jurisdiction of, and venue in the Supreme Court of the State of New York, New
York County and the United States District Court for the Southern District of
New York.
22
26
6.13 Further Assurances. Each Party agrees to execute and deliver,
by the proper exercise of its corporate, limited liability company, partnership,
or other powers, all such other and additional instruments and documents and do
all such other acts and things as may be necessary to more fully effectuate this
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
23
27
The Parties have executed this Subscription and Investor Rights Agreement as of
the Effective Date.
THE COMPANY:
LIFE SCIENCES RESEARCH, INC.,
a Maryland corporation
By:
--------------------------
Name:
Title:
THE INVESTOR:
By:
--------------------------
Name:
Title:
