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Page 1 of 10
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Somatix Therapy Corporation
---------------------------
(Name of Issuer)
Common Stock, $0.01 par value
-----------------------------
(Title of Class of Securities)
834447104
---------
(CUSIP Number)
Bristol-Myers Squibb Company
345 Park Avenue
New York, NY 10154
(212) 546-4000
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
April 30, 1996
-----------------------------
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Statement because of Rule
13d-1(b)(3) or (4), check the following box: |_|
Check the following box if a fee is being paid with this Statement: |X|
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities
of that section of the Exchange Act but shall be subject to all other provisions
of the Exchange Act.
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Page 2 of 10
SCHEDULE 13D
- ----------------------------------
CUSIP No. 834447104
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
BRISTOL-MYERS SQUIBB COMPANY
I.R.S. Employer Identification Number 22-079-0350
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_|
(b) |X|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
2,303,221
NUMBER OF ------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY ------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
PERSON 2,303,221
WITH ------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,303,221
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT ON ROW (11)
9.49%
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14 TYPE OF REPORTING PERSON
CO
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CUSIP No. 834447104
Page 3 of 10
Item 1. Security and Issuer.
The class of equity securities to which this Statement relates is the
Common Stock, par value $0.01 per share (the "Common Stock"), of Somatix Therapy
Corporation, a Delaware corporation (the "Issuer"), which has its principal
executive offices at 850 Marina Village Parkway, Alameda, CA 94501.
Item 2. Identity and Background.
This Statement is being filed by Bristol-Myers Squibb Company, a
Delaware corporation (the "Company"). The Company conducts its principal
business and maintains its principal office at 345 Park Avenue, New York, NY
10154. The Company is a diversified, worldwide health and personal care company
whose principal businesses are pharmaceuticals, consumer products, nutritionals
and medical devices.
The name, business address, present principal occupation or
employment and citizenship of each executive officer and director of the Company
is set forth on Schedule A which is incorporated herein by reference.
During the past five years, neither the Company nor, to the best
knowledge of the Company, any of its executive officers or directors (i) has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and, as a result of such
proceeding, was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
On August 15, 1995, the Issuer and the Company entered into a Stock
Purchase Agreement, whereby the Company agreed to make an initial equity
investment of Ten Million Dollars ($10,000,000) in the Issuer. The purchase
price for the August 1995 investment came out of the working capital of the
Company. Once the Issuer received protocol clearance from the Food and Drug
Administration for a phase III clinical trial for GVAX (TM) cancer vaccine, the
Company agreed to a second equity investment of Ten Million Dollars
($10,000,000) in the Issuer. The purchase price for this purchase came out of
the working capital of the Company.
Page 4 of 10
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Item 4. Purpose of Transaction.
The Company has acquired the Common Stock of the Issuer for the
purpose of making an investment in the Issuer and not with the view to, or for
resale in connection with, any distribution thereof. The Company has no present
intention of selling, granting any participation in, or otherwise distributing
the Common Stock. The Company does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer, or grant participations to
such person or to any third person, with respect to any of the Common Stock. The
Company has a five (5) year right of first offer with regard to collaborations
with the Issuer in any of its internally initiated oncology programs. Under the
terms of the Stock Purchase Agreement, the Issuer must notify the Company of the
Issuer's intention to seek a corporate partner, giving the Company an early
opportunity to expand its relationship with the Issuer.
The shares of the Common Stock of the Issuer owned by the Company
have not been registered under the Securities Act of 1933.
Item 5. Interest in Securities of the Issuer.
To the best knowledge of the Company, the Company is the beneficial
owner of 2,303,221 shares of Common Stock of the Issuer or 9.49% of the Common
Stock of the Issuer currently outstanding. The Company has the sole power to
vote and dispose of all the shares of the Common Stock of the Issuer which it
owns.
Except as set forth in this Item 5 and on Schedule B attached hereto
which is incorporated herein by reference, neither the Company nor, to the best
knowledge of the Company, any of its officers or directors owns any shares of
Common Stock.
Except as set forth on Schedule B attached hereto which is
incorporated herein by reference, neither the Company nor, to the best knowledge
of the Company, any of its executive officers or directors has effected any
transaction in shared of Common Stock during the past sixty (60) days.
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CUSIP No. 834447104
Page 5 of 10
Item 6. Contracts, Arrangements, Understanding or Relationships With Respect
to Securities of the Issuer.
The Stock Purchase Agreement filed as an exhibit hereto is
incorporated by reference in its entirety. Except as set forth in the Stock
Purchase Agreement, neither the Company nor, to the best knowledge of the
Company, any of its officers or directors have entered into any contracts,
arrangements, understandings or relationships (legal or otherwise) with respect
to the Common Stock of the Issuer.
Item 7. Material to be Filed as Exhibits.
Stock Purchase Agreement, dated as of August 15, 1995, between the
Issuer and the Company.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this Statement is true, complete and
correct.
Dated: May 23, 1996 BRISTOL-MYERS SQUIBB COMPANY
------------
By: /s/ Alice C. Brennan
Alice C. Brennan
Vice President & Secretary
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CUSIP No. 834447104
Page 6 of 10
SCHEDULE A
The following information sets forth the name, citizenship, business
address and present principal occupation of each of the directors and executive
officers of the Company. Each of the directors and executive officers of the
Company is a citizen of the United States. Each of the Company's executive
officer's business address is 345 Park Avenue, New York, New York 10154, unless
otherwise indicated.
<TABLE>
<CAPTION>
Name and Business Address Present Principal Occupation
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Directors of Bristol-Myers Squibb Company
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<S> <C>
Charles A. Heimbold, Jr. Chairman of the Board and
Bristol-Myers Squibb Company Chief Executive Officer
345 Park Avenue
New York, New York 10154
Robert E. Allen Chairman and Chief Executive Officer
AT&T Company AT&T Company
295 North Maple Avenue
Basking Ridge, New Jersey 07920
Michael E. Autera Executive Vice President
Bristol-Myers Squibb Company
345 Park Avenue
New York, New York 10154
Ellen V. Futter President
The American Museum of Natural History The American Museum of Natural History
Central Park West at 79th Street
New York, New York 10024
Louis V. Gerstner, Jr. Chairman of the Board and Chief Executive
IBM Corporation Officer of IBM Corporation
Old Orchard Road
Armonk, New York 10504
</TABLE>
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CUSIP No. 834447104
Page 7 of 10
<TABLE>
<CAPTION>
Name and Business Address Present Principal Occupation
- ------------------------- ----------------------------
<S> <C>
John D. Macomber Principal of JDM Investment Group
JDM Investment Group
2806 N. Street, N.W.
Washington, D.C. 20007
James D. Robinson III Chairman and Chief Executive Officer of
J.D. Robinson Inc. RRE Investors, LLC and President of
126 East 56th Street J.D. Robinson Inc.
New York, New York 10022
Andrew C. Sigler Chairman and Chief Executive Officer
Champion International Corporation Champion International Corporation
One Champion Plaza
Stamford, Connecticut 06921
Louis W. Sullivan, M.D. President of Morehouse School of Medicine
Morehouse School of Medicine
720 Westview Drive, S.W.
Atlanta, Georgia 30310-1495
Kenneth E. Weg Executive Vice President and President,
Bristol-Myers Squibb Company Bristol-Myers Squibb Pharmaceutical Group
345 Park Avenue
New York, New York 10154
Officers of Bristol-Myers Squibb Company
Charles A. Heimbold, Jr. Chairman of the Board, Director and Chief
Executive Officer
Michael E. Autera Executive Vice President and Director
</TABLE>
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CUSIP No. 834447104
Page 8 of 10
<TABLE>
<CAPTION>
Name and Business Address Present Principal Occupation
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<S> <C>
Harrison M. Bains, Jr. Treasurer and Vice President, Corporate
Staff
Alice C. Brennan Secretary and Vice President,
Corporate Staff
George P. Kooluris Senior Vice President, Corporate
Development, Corporate Staff
John L. McGoldrick General Counsel and Senior Vice President,
Corporate Staff
Michael F. Mee Chief Financial Officer and Senior Vice
President, Corporate Staff
Leon E. Rosenberg, M.D. President, Bristol-Myers Squibb
Pharmaceutical Research Institute
Frederick S. Schiff Controller and Vice President, Corporate
Staff
Charles G. Tharp, Ph.D. Senior Vice President, Human Resources,
Corporate Staff
Kenneth E. Weg Executive Vice President and Director,
President, Bristol-Myers Squibb
Pharmaceutical Group
</TABLE>
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CUSIP No. 834447104
Page 9 of 10
SCHEDULE B
Shares of Common Stock Owned
----------------------------
None.
Transactions in Shares of Common Stock
during the Last 60 Days
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None.
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CUSIP No. 834447104
Page 10 of 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Document
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<S> <C>
1 Stock Purchase Agreement, dated as of August 15, 1995, between Bristol-
Myers Squibb Company and Somatix Therapy Corporation.
</TABLE>
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STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of this 15th day of
August, 1995 between Somatix Therapy Corporation, a Delaware corporation (the
"Company") and Bristol-Myers Squibb Company, a Delaware corporation
("Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale.
1.1 The First Purchase.
a. Upon the terms and subject to the conditions of
this Agreement, the Company agrees to sell to Investor, and Investor agrees to
purchase from the Company on the First Closing Date (as defined below) that
number of shares of the Company's Common Stock ("Common Stock") which equals Ten
Million Dollars ($10,000,000) divided by one hundred thirty two and one-half
percent (132.5%) of the average closing price of the Company's Common Stock as
reported by the Nasdaq National Market for the consecutive five (5) business
days ending two business days prior to the First Closing Date.
b. The closing of the transaction contemplated by
this Section 1.1 (the "First Closing") shall occur at the close of business on
the effective date of this Agreement, or such other date as may be agreed to in
writing by the parties (the "First Closing Date").
1.2 The Second Purchase.
a. Upon the terms and subject to the conditions of
this Agreement, the Company agrees to sell to Investor, and Investor agrees to
purchase from the Company on the Second Closing Date (as defined below), that
number of shares of the Company's Common Stock which equals Ten Million Dollars
($10,000,000) divided by one hundred twelve and one-half percent (112.5%) of the
average closing price of the Company's Common Stock as reported by the Nasdaq
National Market for the consecutive five (5) business days ending two business
days prior to the Second Closing Date.
b. The closing of the transaction contemplated by
this Section 1.2 (the "Second Closing") shall occur on the tenth business day
following the Company's written notification to Investor that the Company has
received the approvals and/or releases from all relevant government agencies or
bodies required for the Company to initiate a Phase II GVAX
1.
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cancer vaccine clinical trial, or at such other time as Investo and the Company
may mutually agree in writing (the "Second Closing Date").
1.3 Closings. The First Closing and the Second Closing
(collectively, the "Closings" and each, a "Closing") shall take place at 10:00
AM at the offices of Brobeck, Phleger & Harrison in Palo Alto, California, or at
such other time and place as Investor and the Company may agree. At each
Closing,
a. Investor shall deliver to the Company the relevant
purchase price for the Common Stock being purchased in immediately available
funds by check or by wire transfer to an account of the Company designated by
the Company, by notice to Investor, on the relevant Closing Date; and
b. The Company shall deliver to Investor a
certificate for the Common Stock being purchased at such Closing registered in
the name of Investor.
1.4 Other Actions. The Company and Investor agree to take any
actions necessary, including without limitation any filings required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
("Hart-Scott-Rodino"), to permit the valid issuance and delivery of the shares
pursuant to this Section 1. In the event a filing under Hart- Scott-Rodino is
required, the applicable Closing Date shall occur no less than ten (10) days
following receipt of clearance of such filing.
2. Conditions to Obligations.
2.1 Conditions to Investor's Obligations at Closing. The
obligation of Investor to purchase and pay for the Common Stock contemplated by
Section 1 at the First Closing and Second Closing shall be subject to the
satisfaction of each of the following conditions precedent, any one or more of
which may be waived by Investor:
a. Representations and Warranties. Each of the
representations and warranties of the Company set forth in Section 3 shall be
true and correct as if made on the applicable Closing Date, provided that the
representations set forth in Sections 3.5, 3.7 and 3.8 need be true and correct
only on the First Closing Date.
b. Performance. The Company shall have performed and
complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing Date.
c. Compliance Certificate. The Chief Executive
Officer of the Company shall deliver to the Investor at the Closing a
certificate certifying that the conditions specified in subsections (a), (b),
(e) and (f) have been fulfilled.
2.
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d. Opinion of Counsel to the Company. Investor shall
have received from Brobeck, Phleger & Harrison, counsel for the Company, an
opinion dated as of the Closing Date, substantially in the form set forth in
Exhibit A attached to this Agreement.
e. Qualifications. All authorizations, approvals, or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Common Stock to Investor pursuant to this Agreement shall have
been duly obtained and shall be effective on and as of the Closing.
f. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the First
Closing and all documents incident thereto shall be reasonably satisfactory in
form and substance to Investor and Investor's counsel, and they shall have
received all such counterpart original and certified or other copies of such
documents as they may reasonably request.
2.2 Conditions to the Company's Obligations at Closing. The
obligation of the Company to sell and deliver the Common Stock contemplated by
Section 1 at the First Closing and the Second Closing shall be subject to the
satisfaction of each of the following conditions precedent, any one or more of
which may be waived by the Company:
a. Representations and Warranties. Each of the
representations and warranties of Investor set forth in Section 4 shall be true
and correct as if made on the applicable Closing Date.
b. Payment of Purchase Price. Investor shall have
delivered payment of the aggregate purchase price of the Common Stock to be
purchased by it.
c. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be satisfactory in form and substance to
the Company and the Company's counsel, and they shall have received all such
counterpart original and certified or other copies of such documents as they may
reasonably request.
d. Performance. Investor has performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before such Closing.
e. Qualifications. All authorizations, approvals, or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Common Stock to Investor pursuant to this Agreement shall have
been duly obtained and shall be effective on and as of the Closing.
3.
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3. Representations and Warranties of the Company. The Company
hereby represents and warrants to Investor as follows:
3.1 Corporate Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is qualified to do business as a foreign corporation in each
jurisdiction where failure to qualify would have a materially adverse effect on
the business or properties of the Company. The Company has full power and
authority to own its property, to carry on its business as presently conducted
and to carry out the transactions contemplated hereby.
3.2 Authorization. The Company has full power to execute,
deliver and perform this Agreement, and this Agreement has been duly executed
and delivered by the Company and is the legal, valid and, assuming due execution
by the other parties hereto, binding obligation of the Company, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting creditors' rights
generally, and to general equitable principles. The execution, delivery and
performance of this Agreement including the sale, issuance and delivery of the
Common Stock, have been duly authorized by all necessary corporate action of the
Company.
3.3 Governmental Approvals. Based in part on the
representations made by Investor in Section 4, no authorization, consent,
approval, license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, under any applicable laws, rules or regulations presently
in effect, is or will be necessary for, or in connection with, the offer,
issuance, sale, execution and delivery by the Company of the Common Stock or for
the performance by the Company of its obligations under this Agreement, except
for filings under applicable securities laws which will be made by the Company
within the prescribed periods.
3.4 Litigation. There is no litigation or governmental
proceeding or investigation pending or, to the best knowledge of the Company,
threatened against the Company materially and adversely affecting the execution
and delivery of this Agreement or the ability of the Company to issue the shares
of its Common Stock to be issued at each Closing.
3.5 Subsidiaries; Charter Documents. As of the first Closing,
the Company has no active subsidiaries and does not otherwise directly or
indirectly control any other business entity. The Company has furnished Investor
with certified copies of its Certificate of Incorporation and Bylaws, together
with any amendments thereto as of the date hereof.
3.6 Financial Statements. The Company has delivered to
Investor a copy of the Company's Quarterly Report on Form 10-Q for the quarters
ending December 31, 1994 and March 31, 1995 and all subsequent quarters to which
the Company is required to file a Quarterly Report on Form 10-Q,and a copy of
the Company's Annual Report to Stockholders for the fiscal year ended June 30,
1994, containing audited consolidated and consolidating
4.
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balance sheets, statements of income and changes in financial position for the
Company for the fiscal years ended June 30, 1994, June 30, 1993 and June 30,
1992 and all subsequent Annual Reports to Stockholders (the "Financial
Statements"). The Financial Statements are complete and correct in all matters
and respects, have been prepared in accordance with generally accepted
accounting principles, consistently applied, and fairly present the financial
position of the Company as of each such date and the results of operations for
each such period then ended.
3.7 Absence of Certain Developments. Since March 31, 1995,
except as disclosed in the Financial Statements, there has been no (i) material
adverse change in the condition, financial or otherwise, of the Company or its
assets, liabilities, properties, business, operations or prospects generally,
(ii) declaration, setting aside or payment of any dividend or other distribution
with respect to the capital stock of the Company, or (iii) loss, destruction or
damage to any property of the Company, whether or not insured, which has or may
have a material adverse effect on the Company.
3.8 Absence of Undisclosed Liabilities. Except as and to the
extent reflected or stated in the Financial Statements, except for liabilities
arising in the ordinary course of its business since March 31, 1995, the Company
has no material accrued or contingent liability arising out of any transaction
or state of facts existing prior to the date hereof.
3.9 Business. The Company has all necessary franchises,
permits, governmental licenses and other governmental rights and privileges
necessary to permit it to own its property and to conduct its present business,
except where the failure to do so would not have a material adverse effect on
the Company or its business. the Company is not in violation of any law,
regulation, authorization or order of any public authority relevant to the
ownership of its properties or the carrying on of its present business, except
where such violation would not have a material adverse effect on the condition,
assets, liabilities, prospects, business or properties of the Company.
3.10 Non-Contravention. The execution, delivery and
performance by the Company of this Agreement does not and will not (i)
contravene or conflict with the certificate of incorporation or bylaws of the
Company, or (ii) contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or decree binding
upon or applicable to the Company in any manner which would materially and
adversely affect Investor's rights or its ability to realize the intended
benefits under this agreement.
3.11 Filings. The Company has filed all reports required to be
filed with the Securities and Exchange Commission (the "Commission") under the
Securities Exchange Act of 1934 (the "1934 Act"), including (i) the Company's
annual report on Form 10-K for the fiscal year ended June 30, 1994, (ii) its
quarterly reports on Form 10-Q for its fiscal quarters ending March 31, 1995 and
December 31 and September 30, 1994, and (iii) all of its other reports
(including without limitation reports on Form 8-K, statements, schedules and
5.
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registration statements filed with the Commission since June 30, 1994). As of
its filing date, no such report or statement filed pursuant to the 1934 Act
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
4. Representations and Warranties of Investor. Investor hereby
represents and warrants to the Company as follows:
4.1 Investment Experience. Investor is an "accredited
investor" within the meaning of Rule 501 under the Securities Act of 1933, as
amended, (the "Securities Act") and was not organized for the specific purpose
of acquiring the Common Stock. It has sufficient knowledge and experience in
investing in companies similar to the Company in terms of the Company's stage of
development so as to be able to evaluate the risks and merits of its investment
in the Company and it is able financially to bear the risks thereof.
4.2 Purchase for Own Account. Investor is acquiring the Common
Stock for investment for its own account and not with the view to, or for resale
in connection with, any distribution thereof. Investor has no present intention
of selling, granting any participation in, or otherwise distributing the same.
Investor does not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer, or grant participations to such person or to any
third person, with respect to any of the Common Stock. Investor understands that
the shares of Common Stock have not been registered under the Securities Act by
reason of an exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of its investment
intent as expressed herein.
4.3 Restricted Securities. Investor understands that the
Common Stock may not be sold, transferred, or otherwise disposed of without
registration under the Securities Act, or an exemption therefrom, and that in
the absence of an effective registration statement covering the Common Stock or
an available exemption from registration under the Securities Act, the Common
Stock must be held indefinitely. In the absence of an effective registration
statement covering the Common Stock, Investor will sell, transfer, or otherwise
dispose of the Common Stock only in a manner consistent with its representations
and agreements set forth herein.
4.4 Information. Investor acknowledges that it has received
all the information it has requested from the Company and considers necessary or
appropriate for deciding whether to purchase the Common Stock. Investor
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the Company and the terms and conditions of the
offering of the Common Stock, and to obtain an additional information necessary
to verify the accuracy of the information given the Investor.
4.5 Legend. It is understood that the certificates evidencing
the Common Stock may bear substantially the following legend:
6.
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a. THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT.
b. Any legend required by the laws of the State of
California or any other applicable jurisdiction.
4.6 Limitations on Disposition. Investor agrees not to make
any disposition of all or any portion of the shares of the Company's Common
Stock purchased pursuant to this Agreement unless and until (a) there is then in
effect a Registration Statement under the Securities Act of 1933 covering such
proposed disposition and such disposition is made in accordance with such
Registration Statement; or (b) Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and if
reasonably requested by the Company, such Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company that
such disposition will not require registration of such shares under the Act. It
is agreed that the Company will not require opinions of counsel for transactions
made pursuant to Rule 144 except in unusual circumstances.
5. Investor Rights. The Company shall for a period of five (5)
years from the First Closing Date (the "Rights Period") provide Investor with
the following rights and privileges:
5.1 Information Rights. The Company shall provide Investor
with semi-annual comprehensive scientific seminars on its scientific and
clinical progress in the area of gene therapy to be held at such time and place
as is determined by the parties.
5.2 Board Representation. The Company shall nominate and use
its best efforts to have elected to the Company's Board of Directors a
representative of Investor, which representative shall be subject to the
reasonable approval of the Company. If the Company is unable to have such
representative elected to its Board of Directors, such representative shall have
the right to receive notice of and to attend all meetings of the Company's Board
of Directors.
5.3 Rights with Respect to Oncology Partnership Proposals.
Subject to the terms and conditions specified in this Section 5.3, the Company
hereby grants to Investor certain rights ("Oncology Rights"), with respect to
discrete drug discovery development programs in the field of oncology that are
internally initiated by the Company (each an
7.
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"Oncology Program"), excluding programs relating to "prodrug gene therapy" (the
genetic modification of a cell with a gene whose product generates a lethal
metabolite when exposed to a specific compound) (the "Excluded Programs").
Notwithstanding the previous sentence, Investor shall have certain rights with
respect to the Excluded Programs as provided in Section 5.3(c) below.
a. Scope of Oncology Rights. Prior to entering into a
corporate partnering transaction with a third party with respect to a particular
Oncology Program, whether for research, development, manufacturing, and/or
marketing purposes (a "Corporate Transaction"), or in the event the Company is
approached by a third party with respect to a Corporate Transaction, the Company
shall deliver written notice to Investor of its intention to enter into such
Corporate Transaction (the "Transaction Notice"). Such Transaction Notice shall
(i) identify the particular vector and gene covered by such Oncology Program as
well as sufficient scientific data and other confidential information as may
allow the Investor to evaluate the research and development status of such
Oncology Program and (ii) set forth all material business terms and conditions
of the proposed Corporate Transaction.
b. Participation Rights of Investor. From the date
Investor receives the Transaction Notice, Investor shall have the right to
evaluate, discuss and negotiate in good faith the definitive terms and
conditions of a Corporate Transaction regarding such Oncology Program with the
Company for a period not to exceed ninety (90) days (the "Negotiation Period").
If within such ninety (90) day period the Company and Investor enter into a
binding letter of intent containing the principal terms of an agreement with
respect to a Corporate Transaction, then both parties shall have an additional
ninety (90) days to complete and execute the definitive agreements for such
Corporate Transaction. If at any time during a Negotiation Period, Investor
determines that it does not intend in good faith to pursue a Corporate
Transaction with the Company, Investor shall so notify the Company and thereby
terminate the Company's obligations under this Section 5.3 for a period of
eighteen (18) months from the date of the Transaction Notice. If, despite mutual
good faith attempts at negotiation, the Company and Investor cannot agree on
terms and conditions for the Corporate Transaction, then Investor shall have the
right, during the Negotiation Period to deliver to the Company a binding written
offer executed by the Investor containing definitive terms and conditions for a
Corporate Transaction on such Oncology Program (the "Firm Offer"). If the
Investor has delivered a Firm Offer to the Company and the Company has chosen
not to accept such Firm Offer, then the Company shall agree, for a period of
eighteen (18) months not to enter into a Corporate Transaction with respect to
such Oncology Program with any third party unless the terms and conditions of
such Corporate Transaction are, on balance, more favorable to the Company than
those set forth in the Firm Offer. If Investor disputes that any Corporate
Transaction proposed to be consummated by the Company is on terms not more
favorable to the Company than the terms contained in its Firm Offer, then such
dispute shall first be resolved by the chief executive officers of the Company
and Investor's pharmaceutical group, using such valuation practices as are
customary and reasonable given the
8.
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circumstances. If the parties still cannot agree, then they shall engage the
services of a mutually acceptable nationally recognized investment bank which
shall deliver a written opinion on the relative value to the Company of the
terms and conditions of the two proposals. If such opinion indicates that the
terms and conditions of the third party transaction are materially less
favorable to the Company than those set forth in the Firm Offer, then the
Company shall not be entitled to consummate the third party transaction without
first reoffering such transaction to the Investor. Notwithstanding the
foregoing, once a period of eighteen (18) months has passed since the date of
any Transaction Notice for any Oncology Program, the Company shall once again be
required to deliver a Transaction Notice with respect to such Oncology Program
prior to entering into any Corporate Transaction for such Oncology Program with
a third party.
c. Rights with respect to Excluded Programs. In the
event the Company has not entered into a Corporate Transaction with a third
party within eighteen (18) months from the First Closing Date with respect to an
Excluded Program, then such Excluded Program shall become part of Oncology
Rights at the end of such eighteen (18) month period. In addition, the Company
hereby represents and warrants to the Investor that it may, even prior to the
expiration of such eighteen (18) month period discuss or enter into a
collaborative relationship with respect to a specific gene and vector
development program encompassed within the Excluded Program during the term of
this Agreement, and will enter into such discussion upon request by the
Investor.
6. Registration Rights. The Company agrees to provide Investor
with the registration rights as set forth on Exhibit B attached hereto and
incorporated by this reference.
7. Miscellaneous.
7.1 No Waiver; Cumulative Remedies. No failure or delay on the
part of Investor or the Company in exercising any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
7.2 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.
9.
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7.3 Addresses for Notices. All notices, requests, demands and
other communications provided for hereunder shall be in writing (including
telegraphic communication) and mailed or telegraphed or telecopied or delivered
to the applicable party at the addresses indicated below:
If to the Company:
Somatix Therapy Corporation
1301 Marina Village Parkway
Suite 310
Alameda, CA 94501-1034
Attention: Edward O. Lanphier
with a copy to:
Brobeck, Phleger & Harrison
2200 Geng Road
Palo Alto, CA 94303
Attention: J. Stephan Dolezalek, Esq.
If to Investor:
Bristol-Myers Squibb Company
Pharmaceutical Research Institute
Pharmaceutical Group
P.O. Box 4000
Princeton, N.J. 08543-4000
Attention: Charles Linzner, Esq.
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 mailed or telecopied or
telegraphed, respectively, be effective when deposited in the mails or delivered
to the telegraph company, respectively, addressed as aforesaid.
7.4 Expenses. Irrespective of whether the Closing(s) are
effected, the Company shall pay all costs and expenses that it incurs with
respect to the negotiation, execution, delivery and performance of this
Agreement. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
10.
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7.5 Successors and Assigns. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
7.6 Survival of Representations and Warranties. All
representations and warranties made in this Agreement shall survive the
execution and delivery hereof and the Closing(s) hereunder, and shall in no way
be affected by any investigation of the subject matter thereof made by or on
behalf of the Investor or the Company.
7.7 Prior Agreements. This Agreement constitutes the entire
agreement between the parties and supersedes any prior understandings or
agreements concerning the subject matter hereof.
7.8 Severability. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
7.9 Public Disclosure. Neither party shall make any public
disclosure concerning the transactions contemplated hereby without prior
consultation with the other party; provided, however, that nothing herein shall
preclude either party from making such disclosure as is required by applicable
laws binding on it as long as the disclosing party has exercised good faith
efforts under the circumstances to consult with the other party as provided in
this Section 7.9.
7.10 Governing Law. This Agreement shall be governed by and
construed in accordance with, the laws of the State of Delaware without giving
effect to principles of conflict of laws.
7.11 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.
7.12 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.
7.13 Attorney's Fees. If any action at law or in equity is
brought for a breach of representation or warranty made herein or necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
11.
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IN WITNESS WHEREOF, the Company and Investor have
caused this Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
SOMATIX THERAPY CORPORATION
By:
----------------------------
Title:
----------------------------
Date:
----------------------------
INVESTOR
By:
----------------------------
Title:
----------------------------
Date:
----------------------------
12.
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August 15, 1995
Bristol-Myers Squibb Company
Attention: Charles Linzner, Esq.
Pharmaceutical Research Institute
Pharmaceutical Group
Route 206 and Province Line Road
Princeton, New Jersey 08543-4000
Ladies and Gentlemen:
We have acted as counsel for Somatix Therapy Corporation, a
Delaware corporation (the "Company"), in connection with, among other things,
the issuance and sale in a first closing of 1,195,572 shares of the Company's
Common Stock ("First Closing") pursuant to Section 1.1 of the Stock Purchase
Agreement dated August 15, 1995 (the "Stock Purchase Agreement") between the
Company and you. This opinion is being rendered to you pursuant to Section
2.1(d) of the Stock Purchase Agreement in connection with the First Closing of
the sale of the Common Stock. Capitalized terms not otherwise defined in this
opinion have the meaning given them in the Stock Purchase Agreement.
In connection with the opinions expressed herein we have made
such examination of matters of law and of fact as we considered appropriate or
advisable for purposes hereof. As to matters of fact material to the opinions
expressed herein, we have relied upon the representations and warranties as to
factual matters contained in and made by the Company pursuant to the Stock
Purchase Agreement and upon certificates and statements of government officials
and of officers of the Company. We have also examined originals or copies of
such corporate documents or records of the Company as we have considered
appropriate for the opinions expressed herein. We have assumed for the purposes
of this opinion that the signatures on documents and instruments examined by us
are authentic, that each document is what it purports to be, and that all
documents submitted to us as copies conform with the originals, which facts we
have not independently verified.
In rendering this opinion we have also assumed: (A) that the
Stock Purchase Agreement and the Amended and Restated Registration Rights
Agreement dated August 15,
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1995, (the "Registration Rights Agreement") have been duly and validly executed
and delivered by you or on your behalf and constitute valid, binding and
enforceable obligations upon you; (B) that the representations and warranties
made in the Stock Purchase Agreement by you are true and correct; (C) that any
wire transfers, drafts or checks tendered by you will be honored; (D) that if
you are a corporation or other entity, that you have filed any required state
franchise, income or similar tax returns and have paid any required state
franchise, income or similar taxes; and (E) that there are no extrinsic
agreements or understandings among the parties to the Stock Purchase Agreement
and the Registration Rights Agreement that would modify or interpret the terms
of such agreements or the respective rights or obligations of the parties
thereunder.
As used in this opinion, the expression "we are not aware" or
the phrase "to our knowledge" means as to matters of fact that, based on the
actual knowledge of individual attorneys within the firm principally responsible
for handling current matters for the Company and after an examination of
documents referred to herein and after inquiries of certain officers of the
Company, we find no reason to believe that the opinions expressed are factually
incorrect; but beyond that we have made no factual investigation for the
purposes of rendering this opinion. Specifically, but without limitation, we
have made no inquiries of securities holders or employees of the Company.
This opinion relates solely to the laws of the State of
California, the General Corporation Law of the State of Delaware and the federal
securities laws of the United States and we express no opinion with respect to
the effect or application of any other laws. Special rulings of authorities
administering such laws or opinions of other counsel have not been sought or
obtained.
Based upon our examination of and reliance upon the foregoing
and subject to the limitations, exceptions, qualifications and assumptions set
forth below and except as set forth in the Stock Purchase Agreement, we are of
the opinion that as of the date hereof:
1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and the
Company has the requisite corporate power and authority to own its properties
and to conduct its business.
2. The Company has the requisite corporate power and authority
to execute, deliver and perform the Stock Purchase Agreement and the
Registration Rights Agreement. Both of the foregoing have been duly and validly
authorized by the Company and have been duly executed and delivered by an
authorized officer of the Company.
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3. The 1,195,572 shares of the Common Stock issued and sold at
the First Closing pursuant to the Stock Purchase Agreement have been duly and
validly authorized and are validly issued, fully paid and nonassessable.
4. The Company's execution, delivery, performance and
compliance with the terms of the Stock Purchase Agreement do not violate (i) any
provision of any applicable federal or state law or (ii) any provision of the
Company's Amended and Restated Certificate of Incorporation, as amended, or
Bylaws.
5. All consents, approvals, permits, orders or authorizations
of, and all qualifications, registrations, designations, declarations or filings
with, any federal or Delaware or California state governmental authority on the
part of the Company required in connection with the execution and delivery of
the Stock Purchase Agreement have been obtained, and are effective, except the
filing required by Section 25102(f) of the California Corporate Securities Law
of 1968, as amended.
6. Based in part upon the representations made by you in the
Stock Purchase Agreement, the offer and sale of the Common Stock to you pursuant
to the terms of the Stock Purchase Agreement are exempt from the registration
requirements of Section 5 of the Securities Act of 1933, as amended, by virtue
of Section 4(2) thereof and from the qualification requirements of the
California Corporate Securities Law of 1968, as amended, by virtue of Section
25102(f) thereof.
Our opinions expressed above are specifically subject to the
following limitations, exceptions, qualifications and assumptions:
(A) The effect of bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting the
relief of debtors or the rights and remedies of creditors generally, including
without limitation the effect of statutory or other law regarding fraudulent
conveyances and preferential transfers.
(B) We express no opinion as to the Company's
compliance or noncompliance with applicable federal or state antifraud or
antitrust statutes, laws, rules and regulations.
(C) Limitations imposed by state law, federal law or
general equitable principles upon the specific enforceability of any of the
remedies, covenants or other provisions of any applicable agreement and upon the
availability of injunctive relief or other equitable remedies, regardless of
whether enforcement of any such agreement is considered a proceeding in equity
or at law.
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(D) The effect of court decisions, invoking statutes
or principles of equity, which have held that certain covenants and provisions
of agreements are unenforceable where enforcement of such covenants or
provisions under the circumstances would violate the enforcing party's implied
covenant of good faith and fair dealing.
(E) The unenforceability under certain circumstances
of provisions expressly or by implication waiving broadly or vaguely stated
rights, unknown future rights, or defenses to obligations or rights granted by
law, when such waivers are against public policy or prohibited by law.
(F) The unenforceability under certain circumstances
of provisions to the effect that rights or remedies are not exclusive, that
rights or remedies may be exercised without notice, that every right or remedy
is cumulative and may be exercised in addition to or with any other right or
remedy, that election of a particular remedy or remedies does not preclude
recourse to one or more remedies, or that failure to exercise or delay in
exercising rights or remedies will not operate as a waiver of any such right of
remedy.
(G) The unenforceability under certain circumstances
of provisions indemnifying a party against, or requiring contributions toward,
that party's liability for its own wrongful or negligent acts, or where
indemnification or contribution is contrary to public policy. In this regard, we
advise you that in the opinion of the Securities and Exchange Commission
indemnification of directors, officers and controlling persons of an issuer
against liabilities arising under the Securities Act of 1933, as amended, is
against public policy and is therefore unenforceable.
(H) The effect of California law, federal law or
equitable principles which limits the amount of attorneys' fees that can be
recovered under certain circumstances.
(I) The effect of subsequent issuances of securities
of the Company, to the extent that further issuances which may be integrated
with the Closing may include purchasers which do not meet the definition of
"accredited investors" under Rule 501 of Regulation D and equivalent definitions
under state securities or "blue sky" laws.
This opinion is rendered as of the date first written above
solely for your benefit in connection with the Stock Purchase Agreement and may
not be delivered to, quoted or relied upon by any person other than you, or for
any other purpose, without our prior written consent. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company. We
assume no obligation to advise you of facts, circumstances, events or
developments which
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hereafter may be brought to our attention and which may alter, affect or modify
the opinions expressed herein.
Very truly yours,
BROBECK, PHLEGER & HARRISON
<PAGE>
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SOMATIX THERAPY CORPORATION
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (the
"Agreement"), is made as of the 15th day of August 1995 by and among Somatix
Therapy Corporation, a Delaware corporation (the "Company") and the persons set
forth in Exhibit A hereto (the "Investors").
WHEREAS, the Company has previously entered into a
Registration Rights Agreement dated May 12, 1994 with the parties listed as
signatories thereto (the "Prior Registration Rights Agreement").
WHEREAS, the Company now desires to issue certain securities
having registration rights pursuant to a Stock Purchase Agreement dated as of
August 15, 1995 (the "Purchase Agreement") between the Company and Bristol-Myers
Squibb Company ("BMS").
WHEREAS, in consideration of the mutual promises, covenants
and agreements set forth below and in the Purchase Agreement, the parties agree
with each other as follows:
1. Registration Rights.
The Company covenants and agrees as follows:
1.1 Definitions.
(a) The terms "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder (the
"1933 Act") and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "Old Registrable Securities" means
(1) the shares of the Company's common stock, $0.01
par value (the "Common Stock") issued or issuable upon conversion of (i) the
shares of Hana Biologics, Inc.'s Series A Preferred Stock (as defined in the
Hana Biologics, Inc.'s Series A Preferred Stock and Warrant Purchase Agreement
dated December 13, 1988) and (ii) the shares of Common Stock of GeneSys issuable
upon exercise of the Warrant (the "KPCB Warrant") to purchase shares of Common
Stock of GeneSys issued to Kleiner Perkins Caufield & Byers V ("KPCB") on
November 9, 1991, but only if (x) such shares have not been registered pursuant
to the Put and Call Agreement (the "Put and Call Agreement") dated January 17,
1992,
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between Somatix and KPCB, or (y) if KPCB shall not have received an opinion of
counsel for Somatix that KPCB is entitled to sell the shares of Somatix Common
Stock received pursuant to the Put and Call Agreement pursuant to Rule 144 or
Rule 145 under the 1933 Act, and
(2) any Common Stock issued as (or issuable
upon the conversion or exercise of any warrant, right, or other security which
is issued as) a dividend or other distribution with respect to, or in exchange
for or in replacement of the shares referred to above; provided, however, that
any shares previously sold (i) to the public pursuant to a registered public
offering or (ii) pursuant to Rule 144 under the 1933 Act shall cease to be
Registrable Securities;
(c) The term "New Investor Registrable Securities"
shall mean, (1) from the date on which either (i) Somatix is no longer actively
developing a product for Colorectal Cancer or (ii) Somatix's first Colorectal
Cancer product has completed Phase II clinical studies, and no earlier, the
shares of Common Stock issued pursuant to the Stock Purchase Agreement dated as
of May 12, 1994 between the Company and Health Care Partners, LLC (the
"Investment Agreement"); (2) the shares of Common Stock issued upon exercise of
the Common Stock Warrant issued pursuant to the Company's lease line arrangement
with Aberlyn Capital Management L.P.; and (3) any Common Stock issued as (or
issuable upon the conversion or exercise of any warrant, right, or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, such shares; provided, however, that
any shares previously sold (i) to the public pursuant to a registered public
offering or (ii) pursuant to Rule 144 under the 1933 Act shall cease to be New
Investor Registrable Securities;
(d) The term "BMS Registrable Securities" shall mean
(i) the shares of the Company's Common Stock purchased or otherwise acquired by
BMS pursuant to the Purchase Agreement and (ii) any Common Stock issued as (or
issuable upon the conversion or exercise of any warrant, right, or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of the BMS Shares; provided, however, that
any shares previously sold (i) to the public pursuant to a registered public
offering or (ii) pursuant to Rule 144 under the Securities Act shall cease to be
registrable BMS Shares.
(e) The term "Registrable Securities" means the Old
Registrable Securities, the New Investor Registrable Securities and the BMS
Registrable Securities.
(f) The number of shares of "Registrable Securities
then outstanding" shall be determined by adding the number of shares of Common
Stock outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which upon issuance would
be, Registrable Securities;
(g) The term "Holder" means any person owning or
having the right to acquire Registrable Securities or any assignee thereof in
accordance with Sections 1.13 and
2.
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2.4 hereof;
(h) The terms "Form S-3", "Form S-4" and "Form S-8"
mean such respective forms under the 1933 Act as in effect on the date hereof or
any successor registration forms to Form S-3, Form S-4 and Form S-8,
respectively, under the 1933 Act subsequently adopted by the Securities and
Exchange Commission ("SEC").
1.2 Request for Registration.
(a) Demand by Holders of Old Registrable Securities.
If at any time after January 17, 1993 and before January 17, 1997, a written
request from the Holders of at least twenty-five percent (25%) of the Old
Registrable Securities then outstanding request that the Company effect the
registration under the 1933 Act of at least 15% of the Old Registrable
Securities then outstanding, then the Company shall, within ten (10) days of the
receipt thereof, give written notice of such request to the Holders of New
Investor Registrable Securities and shall, subject to the limitations of this
Section 1.2, use its best efforts to effect such a registration as soon as
practicable and in any event to file within ninety (90) days of the receipt of
such request a registration statement under the 1933 Act covering all the Old
Registrable Securities which the Holders shall in writing request, plus any New
Investor Registrable Securities which Holders shall in writing request (within
twenty (20) days of receipt of the notice given by the Company pursuant to this
Section 1.2(a)) to be included in such registration and to use its best efforts
to have such registration statement become effective.
(b) Demand by BMS. At any time after August 15, 1998,
if BMS requests in writing that the Company effect the registration under the
Securities Act of no less than fifty percent (50%) of the BMS Registrable
Securities then outstanding, then the Company shall, subject to the limitations
contained in this Section 1.2, use its best efforts to effect such a
registration as soon as practicable and in any event to file within ninety (90)
days of the receipt of such request a registration statement under the 1933 Act
covering all the BMS Registrable Securities which BMS shall in writing request
to be included in such registration and to use its best efforts to have such
registration statement become effective. The Company will not include in any
registration pursuant to this Section 1.2(b) any securities which are not BMS
Registrable Securities.
(c) Underwritten Offering. If the Holders initiating
the registration request under Section 1.2(a) or 1.2(b) (the "Initiating
Holder(s)") intend to distribute the Registrable Securities covered by their
request by means of an underwriting, they shall so advise the Company as a part
of their request made pursuant to this Section 1.2 and the Company shall include
such information in the written notice referred to in subsection 1.2(a). In such
event, the right of any Holder to include its Registrable Securities in such
registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein.
3.
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All Holders proposing to distribute their securities through such underwriting
shall (together with the Company as provided in subsection 1.4(e)) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by a majority in interest of the Initiating
Holders. The underwriter will be selected by a majority in interest of the
Initiating Holders and shall be reasonably acceptable to the Company; provided
that the Company shall (without limitation) accept any underwriter who has
maintained a market in the Company's securities for at least six months
preceding such selection. Notwithstanding any other provision of this Section
1.2, if the underwriter advises the Initiating Holders in writing that marketing
factors require a limitation of the number of shares to be underwritten, then
the Initiating Holders shall so advise all Holders of Registrable Securities
which would otherwise be underwritten pursuant hereto, and the number of shares
of Registrable Securities that may be included in the underwriting shall be
reduced pro rata among all participating Holders to the extent necessary to
reduce the size of the offering to the number of shares recommended by such
underwriter.
(d) Number of Demands. The Company is obligated to
effect only one registration pursuant to Section 1.2(a) and one registration
pursuant to Section 1.2(b).
(e) Deferral of Registration. Notwithstanding
the foregoing, if the Company shall furnish to Holders requesting a registration
statement pursuant to this Section 1.2 a certificate signed by the President
of the Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be materially detrimental to the Company and
its stockholders generally for such registration statement to be filed, the
Company shall have the right to defer such filing for a period of not more than
one hundred twenty (120) days after receipt of the request of the Initiating
Holders; provided, however, that the Company may not utilize the right set
forth in this subsection (d) more than once in any twelve-month period.
1.3 Company Registration. If at any time through (i) January
17, 1997 with respect to the Old Registrable Securities, (ii) March 31, 1999
with respect to the New Investor Registrable Securities and (iii) August 15,
2000 with respect to the BMS Registrable Securities, the Company proposes (but
without any obligation to do so) to register (including for this purpose a
registration effected by the Company for stockholders other than the Holders)
any of its capital stock or other securities under the 1933 Act in connection
with the public offering of such securities (other than a registration on Form
S-8 relating solely to the sale of securities to participants in a Company stock
plan, or a registration on Form S-4 or any successor form), the Company shall,
at such time, promptly give each Holder written notice of such registration.
Upon the written request of any Holder given within twenty (20) days after
receipt of such notice from the Company the Company shall, subject to the
provisions of Section 1.8, use its best efforts to offer such Holder the
opportunity to register the Registrable Securities that each such Holder has
requested to be registered on the same terms and conditions as the Company's
capital stock or securities being registered. The Company shall be under no
obligation to complete any offering of its securities it proposes to make and
shall incur no liability to any Holder for its failure to do so.
4.
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1.4 Obligations of the Company. Whenever required under this
Section 1 to use its best efforts to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become effective and, upon the request
of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to one hundred
twenty (120) days.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement, and use its best efforts to cause each such
amendment to become effective, as may be necessary to comply with the provisions
of the 1933 Act with respect to the disposition of all securities covered by
such registration statement.
(c) Prior to filing any registration statement or any
amendment or supplement thereto, furnish to the Holders registering securities
thereunder copies thereof and, thereafter, furnish to the Holders such
reasonable number of copies of a prospectus, including a preliminary prospectus,
in conformity with the requirements of the 1933 Act, and such other documents as
they may reasonably request in order to facilitate the disposition of
Registrable Securities owned by them.
(d) Use its best efforts to register or qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdiction.
(e) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement, including furnishing any opinion of counsel
or entering into a lock-up agreement reasonably requested by the managing
underwriter, not to exceed 180 days.
(f) Promptly notify each Holder of Registrable
Securities covered by such registration statement, at any time when a prospectus
relating thereto covered by such registration statement is required to be
delivered under the 1933 Act, of the happening of any event as a result of which
the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing and use its best
efforts to promptly file such amendments and supplements which may be required
pursuant to subparagraph (b) of this Section 1.4 on
5.
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account of such event so that such prospectus shall not include an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing; provided, however, that the Company
may defer the filing of such amendments or supplements if the Company shall
furnish to the Holders a certificate signed by the president of the Company
stating that in the good faith judgment of the Board of Directors of the Company
it would be materially detrimental to the Company and its stockholders for such
amendments or supplements to be filed at such time. In the event the Company
shall so notify each Holder, the Company shall extend the period during which
such registration statement shall be maintained effective as provided in Section
1.4(a) hereof by the number of days during the period from and including the
date of the giving of such notice to the date when the Company shall make
available to each Holder such supplemented or amended prospectus.
(g) Furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Section 1, on the date
that such Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 1, if such securities
are being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, a signed counterpart of (i) an opinion,
dated such date, of the counsel representing the Company for the purposes of
such registration, in form and substance as is customarily given by company
counsel to the underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holders requesting registration of Registrable
Securities, if any, and (ii) a letter dated such date, from the independent
certified public accountant of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities.
(h) Apply for listing and use its best efforts to
list the Registrable Securities being registered on any national securities
exchange on which a class of the Company's equity securities are listed or, if
the Company does not have a class of equity securities listed on a national
securities exchange, apply for qualification and use its best efforts to qualify
the Registrable Securities being registered for inclusion on the automated
quotation system of the National Association of Securities Dealers, Inc.
(i) After the filing of such registration statement,
the Company will promptly notify each Holder of Registrable Securities covered
by such registration statement of any stop order issued or, to the knowledge of
the company, threatened to be issued by the SEC and take all necessary actions
required to prevent the entry of such stop order or to remove it if entered.
(j) The Company will enter into customary agreements
reasonably acceptable to the Company (including an underwriting agreement in
customary form reasonably acceptable to the Company) and take such other actions
as are reasonably required
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in order to expedite or facilitate the sale of such Registrable Securities.
1.5 Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 1
that the selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them, and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities.
1.6 Expenses of Demand Registration. All expenses other than
underwriting discounts and commissions relating to Registrable Securities
incurred in connection with the registration, filings or qualifications pursuant
to Section 1.2 including, without limitation, all registration, filing and
qualification fees, printing and accounting fees, listing fees and expenses,
fees and expenses of compliance with securities or blue sky laws, fees and
disbursements of counsel for the Company, and the reasonable fees and
disbursements of one counsel for the selling Holders pursuant to a demand under
Section 1.2(a) and one counsel for BMS pursuant to a demand under Section 1.2(b)
shall be borne by the Company; provided, however, that the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 1.2, if the registration request is subsequently withdrawn at any
time at the request of the Holders of a majority of the Registrable Securities
to be registered in such offering (in which case all participating Holders shall
bear such expenses), unless the Holders of a majority of the Registrable
Securities agree to forfeit their right to one demand registration pursuant to
Section 1.2; provided further, however, that if at the time of such withdrawal,
the Holders have learned of a material adverse change in the condition,
business, or prospects of the Company from that known to the Holders of a
majority of the shares at the time of their request that makes the proposed
offering unreasonable in the good faith judgment of a majority in interest of
the Holders of the Registrable Securities, then the Holders shall not be
required to pay any of such expenses. Notwithstanding the foregoing, in no event
shall a withdrawal of registration by the Holders of Old Registrable Securities
constitute a forfeiture of the right of BMS to demand registration pursuant to
Section 1.2(b).
1.7 Expenses of Company Registration. The Company shall bear
and pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 1.3 for each Holder (which right may be assigned as provided
in Section 1.13), including, without limitation, all registration, filing and
qualification fees, printing and accounting fees, listing fees and expenses,
fees and expenses of compliance with securities or blue sky laws, fees and
disbursements of counsel for the Company and the reasonable fees and
disbursements of one counsel for the selling Holders. Underwriting discounts and
commissions relating to Registrable Securities will be borne and paid ratably by
the Holders of such Registrable Securities.
1.8 Underwriting Requirements. In connection with any offering
involving an underwriting of securities being issued by the Company, the Company
shall not be required under Section 1.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the
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underwriters selected by it, and then, subject to the provisions of this Section
1.8, only in such quantity, if any, as will not, in the opinion of the
underwriters, jeopardize the success of the offering by the Company. If the
managing underwriter for an offering pursuant to which Registrable Securities
are being registered pursuant to Section 1.3 shall advise the Company in writing
that the total amount of securities, including Registrable Securities requested
to be included in such offering exceeds the amount of securities proposed to be
included in such offering that can be successfully offered, then the Company
shall include in the offering only that number of such securities, including
Registrable Securities, which the managing underwriter believes will not
jeopardize the success of the offering, the securities so included to be
apportioned as follows: first all securities which stockholders other than the
Holders seek to include in the offering shall be excluded from the offering to
the extent limitation on the number of shares included in the underwriting is
required, and, if further limitation on the number of shares to be included in
the underwriting is required, then the number of shares held by Holders that may
be included in the underwriting shall be apportioned pro rata among the selling
Holders or in such other apportions as shall be mutually agreed to by all such
selling Holders but in no event shall (i) the amount of Registrable Securities
included in the offering be reduced below twenty-five percent (25%) of the total
amount of securities included in such offering, and (ii) the amount of New
Investor Securities included in the offering be reduced to below five percent
(5%) of the total amount of securities included in such offering; provided, that
if such offering is an underwritten offering pursuant to an effective
registration statement under the 1933 Act covering the offer and sale of
securities for the accounts of the Company and selling shareholders to the
public generally at a price per share (prior to underwriter discounts and
commissions and offering expenses) of not less than $10.00 (appropriately
adjusted for any recapitalizations, stock splits, stock combinations or stock
dividends) in which the net proceeds to the Company and selling shareholders (if
any) are not less than $20,000,000, (i) the amount of Registrable Securities
included in the offering shall not be reduced below fifty percent (50%), and
(ii) the amount of New Investor Securities included in the offering shall not be
reduced below ten percent (10%), in each case of the number of securities equal
to the difference between (a) the total number of securities included in such
offering and (b) the number of securities which, when multiplied by the price
per share (prior to underwriter discounts and commissions and offering expenses)
at which such securities are to be sold in such offering equals $10,000,000. For
purposes of the preceding sentence for any selling shareholder which is a Holder
of Registrable Securities and which is a partnership or a corporation, the
partners, retired partners and shareholders of such holder, or the estates and
family members of such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be included as part
of such `selling shareholder', and any pro rata reduction with respect to such
'selling shareholder' shall be based upon the aggregate amount of shares
carrying registration rights owned by all such entities and individuals included
in such 'selling stockholder', as defined in this sentence.
1.9 Indemnification. In the event any Registrable Securities
are included in a registration statement under this Section 1:
(a) Company Indemnification. To the extent permitted
by law, the
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Company will indemnify and hold harmless each Holder, the officers, directors,
partners, agents and employees of each Holder, any underwriter (as defined in
the 1933 Act) for such Holder, and each person, if any, who controls such Holder
or underwriter within the meaning of the 1933 Act or the Securities Exchange Act
of 1934, as amended (the "1934 Act"), against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the 1933
Act, the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations (a
"Violation"): (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the 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 (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the 1933 Act, the 1934 Act or any state securities
law. The Company will reimburse each such Holder, officer, director, partner,
agent, employee, underwriter or controlling person for any legal or other
reasonable fees and expenses incurred by them in connection with investigating
or defending any such loss, claim, damage, liability, or action. The indemnity
agreement contained in this subsection 1.9(a) shall not apply to amounts paid in
settlement of any loss, claim, damage, liability, or action if such settlement
is effected without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable to a Holder in any such
case for any such loss, claim, damage, liability, or action (i) to the extent
that it arises out of or is based upon a Violation which occurs in reliance upon
and in conformity with written information furnished expressly for use in
connection with such registration by or on behalf of such Holder, underwriter or
controlling person or (ii) in the case of a sale directly by a Holder of
Registrable Securities (including a sale of such Registrable Securities through
any underwriter retained by such Holder to engage in a distribution solely on
behalf of such Holder), if 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 such Holder failed to deliver a
copy of the final or amended prospectus at or prior to the confirmation of the
sale of the Registrable Securities to the person asserting any such loss, claim,
damage or liability in any case where such delivery is required by the
Securities Act.
(b) Holder Indemnification. To the extent permitted
by law, each selling Holder will indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the registration
statement, each person, if any, who controls the Company within the meaning of
the 1933 Act, each agent and any underwriter for the Company, and any other
Holder selling securities in such registration statement or any of its
directors, officers, partners, agents or employees or any person who controls
such Holder or underwriter, against any losses, claims, damages, or liabilities
(joint or several) to which the Company or any such director, officer,
controlling person, agent, or underwriter or controlling person, or other such
Holder or director, officer or controlling person may become subject, under the
1933 Act, the 1934 Act or other federal or state law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any
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Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by or on behalf of such Holder expressly for use in connection with
such registration and each such Holder will reimburse any legal or other fees
and expenses reasonably incurred by the Company or any director, officer, agent
or underwriter or controlling person, other Holder, officer, director, partner,
agent, employee, or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the liability of any Holder hereunder shall be limited to the amount of
gross proceeds received by such Holder in the offering giving rise to the
Violation; and provided further that the indemnity agreement contained in this
subsection 1.9(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder, which consent shall not be unreasonably withheld nor,
in the case of a sale directly by the Company of its securities (including a
sale of such securities through any underwriter retained by the Company to
engage in a distribution solely on behalf of the Company), shall the Holder be
liable to the Company in any case which 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 Company or
any underwriter failed to deliver a copy of the final or amended prospectus at
or prior to the confirmation of the sale of the securities to the person
asserting any such loss, claim, damage or liability in any case where such
delivery is required by the 1933 Act.
(c) Notice, Defense and Counsel. Promptly after
receipt by an indemnified party under this Section 1.9 of notice of the
commencement of any action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made against any indemnifying
party under this Section 1.9, deliver to the indemnifying party a written notice
of the commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume and control the
defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure of the indemnified party to deliver
written notice to the indemnifying party within a reasonable time of receipt of
the indemnified party of a notice of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.9 to the extent of such prejudice, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 1.9.
(d) Contribution. If the indemnification provided for
in this Section 1 is unavailable to the indemnified parties in respect of any
losses, claims, damages or liabilities referred to herein, then each
indemnifying party, in lieu of indemnifying such
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indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company, the Holders and the underwriters from the offering of the
securities, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) but also the relative fault
of the Company, the Holders and the underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company, the Holders and the underwriters
shall be deemed to be in the same proportion as the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting
expenses) received by each of the Company and the Holders and the total
underwriting discounts and commissions received by the underwriters, in each
case as set forth in the table on the cover page of the prospectus, bear to the
aggregate public offering price of the securities. The relative fault of the
Company, the Holders and the underwriters shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by such party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Holders agree that it would not be just
and equitable if contribution pursuant to this Section 1.9(d) were determined by
pro rata allocation (even if the underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(e) Survival of Rights and Obligations. The
obligations of the Company and the Holders under this Section 1.9 shall survive
the completion of any offering of Registrable Securities in a registration
statement whether under this Section 1 or otherwise.
1.10 Reports Under Securities Exchange Act of 1934. With a
view to making available to the Holders the benefits of Rule 144 promulgated
under the 1933 Act and any other rule or regulation of the SEC that may at any
time permit a Holder to sell securities of the Company to the public without
registration, and with a view to making it possible for Holders to register the
Registrable Securities pursuant to a registration on Form S-3, the Company
agrees to:
(a) make and keep public information available at all
times, as those
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terms are understood and defined in Rule 144;
(b) take such action, including the voluntary
registration of its Common Stock under Section 12 of the 1934 Act, as is
necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities;
(c) file with the SEC in a timely manner all reports
and other documents required of the Company under the 1933 Act and the 1934 Act;
and
(d) furnish to any Holder, so long as the Holder owns
any Registrable Securities, forthwith upon request (i) a written statement by
the Company that it has complied with the reporting requirements of Rule 144,
the 1933 Act and the 1934 Act (at any time after it has become subject to such
reporting requirements), or that it qualifies as a registrant whose securities
may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a
copy of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested in availing any Holder of any rule or regulation
of the SEC which permits the selling of any such securities without registration
or pursuant to such form.
1.11 Form S-3 Registration. In case the Company shall receive
from any Holder or Holders of Old Registrable Securities or New Investor
Registrable Securities a written request or requests that the Company effect a
registration on Form S-3 (or on any successor form to Form S-3 regardless of its
designation) and any related qualification or compliance with respect to all or
a part of the Registrable Securities owned by such Holder or Holders, the
Company will:
(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders;
and
(b) use its best efforts to effect, as soon as
practicable, such registration, qualification or compliance as may be so
requested and as would permit or facilitate the sale and distribution of all or
such portion of such Holder's or Holders' Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any other Holder or Holders joining in such request as are
specified in a written request given within 20 days after receipt of such
written notice from the Company; provided, however, that the Company shall not
be obligated to effect any such registration, qualification or compliance,
pursuant to this Section 1.11: (1) if Form S-3 (or any successor form to Form
S-3 regardless of its designation), is not available for such offering by the
Holders; (2) if the aggregate offering price less underwriting discounts and
commissions of the Registrable Securities specified in such request is not at
least $1,000,000; (3) if the Company has already effected one registration on
Form S-3 within six months of the date on which the proposed registration will
become effective (exclusive of registrations effected pursuant to Sections 1.2
or 1.3 hereof); (4) in the case of the New Investor Registrable Securities if
such request is made after March 31, 1999, and in the case of the Old
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Registrable Securities until the third anniversary of the exercise of the KPCB
Warrant; or (5) if the Company shall furnish to the Holders a certificate signed
by the president of the Company stating that in the good faith judgment of the
Board of Directors of the Company, it would be seriously detrimental to the
Company and its stockholders for such Form S-3 registration to be effected at
such time, in which event the Company shall have the right to defer the filing
of the Form S-3 registration for a period of not more than 90 days after receipt
of the request of the Holder or Holders under this Section 1.11; provided,
however, that the Company shall not utilize this right more than once in any
twelve month period.
(c) In the case of the New Investor Registrable
Securities until March 31, 1999 and in the case of the Old Registrable
Securities until the third anniversary of the date of exercise of the KPCB
Warrant (the "Expense Termination Date"), all expenses other than underwriting
discounts and commissions relating to Registrable Securities incurred in
connection with each of the registrations, filings or qualifications pursuant to
this Section 1.11 including (without limitation) all registration, filing and
qualification fees, printing and accounting fees, fees and disbursements of
counsel for the Company, and the reasonable fees and disbursements of one
counsel for the selling Holders shall be borne by the Company; provided,
however, that, in the case of the Old Registrable Securities, for each day after
the date on which the Company becomes eligible to register its securities on
Form S-3 that the Company is once again ineligible to register its securities,
the Expense Termination Date will be one day later.
1.12 Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1; provided that this Section
1.12 shall not apply to New Investor in connection with a registration requested
by New Investor under Section 1.2(a).
1.13 Assignment and Transfer of Registration Rights. The
rights and obligations hereunder may be assigned by any Holder to a holder or
transferee of at least 50,000 shares of Registrable Securities if, prior to such
proposed assignment, the Company is furnished with at least five days prior
written notice of the name and address of such proposed assignee and the
Registrable Securities with respect to which such registration rights are
proposed to be assigned; provided, however, that such rights and obligations
with regard to any Registrable Securities may only be assigned in connection
with the transfer of such Registrable Securities in accordance with the terms
and conditions of the Purchase Agreement and the Investment Agreement.
1.14 Company's Support for Secondary Offerings. The Company
covenants and agrees to take any and all reasonable further action as may be
requested by the Holders to support any secondary offering of the Company's
securities by such Holders, including (without limitation) participation in any
informational meetings scheduled or arranged by any underwriter involved in
selling such Holders' securities.
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1.15 Limitations on Subsequent Registration Rights. From and
after the date of this Agreement, the Company shall not, without the prior
written consent of the Holders of a majority of the Registrable Securities then
outstanding, enter into any agreement with any holder or prospective holder of
any securities of the Company relating to registration rights unless such
agreement includes: (a) to the extent the agreement would allow such holder or
prospective holder to include such securities in any registration filed under
Section 1.2 or 1.11 hereof, a provision that such holder or prospective holder
may include such securities in any such registration only to the extent that the
inclusion of its securities will not reduce the amount of the Registrable
Securities of the Holders which would otherwise be included or in the judgment
of the managing underwriter, adversely affect the Registrable Securities which
would otherwise be included; (b) to the extent the agreement would allow such
holder or prospective holder to include such securities in any registration
effected pursuant to Section 1.3 hereof, a provision that the rights of such
holder to participate in such registration shall permit participation on no
greater level than that of the Holders; and (c) no provision which would allow
such holder or prospective holder to make a demand registration which could
result in such registration statement being declared effective within 150 days
after the effective date of any registration effected pursuant to Section 1.2.
2. Miscellaneous.
2.1 Notices. All notices or other communications required or
permitted to be delivered hereunder shall be in writing signed by the party
giving the notice to each of the Holders at their respective addresses as set
forth in Exhibit A to this Agreement:
Copy to the Company at: Somatix Therapy Corporation
850 Marina Village Parkway
Alameda, California 94501-1034
Attention: President
Copy to: Brobeck, Phleger & Harrison
Two Embarcadero Place
2200 Geng Road
Palo Alto, California 94303
Attention: J. Stephan Dolezalek, Esq.
The Company or a Holder may at any time change the address to
which notice to him, her or it shall be delivered by giving notice of such
change to the other parties to this Agreement and such notice shall be deemed
given when received by the other parties hereto.
2.2 Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the matters contemplated herein. This
Agreement supersedes any and all prior understandings as to the subject matter
of this Agreement.
2.3 Amendments and Waivers. Any provision in this Agreement to
the
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contrary notwithstanding, changes in or additions to this Agreement may be made,
and compliance with any covenant or provision herein set forth may be omitted or
waived, if the Company (i) shall obtain consent thereto in writing from persons
holding or having the right to acquire an aggregate of at least sixty-six and
two-thirds percent (66 2/3%) of the aggregate of the Registrable Securities,
(ii) in the case of any amendment to Section 1.2(a) which adversely affects the
rights of the Holders of Old Registrable Securities, shall obtain consent
thereto from such Holders, (iii) in the case of any amendment to Section 1.2(b)
which adversely affects the rights of BMS or Section 1.3 which adversely and
disproportionately affects the rights of BMS, shall obtain consent thereto from
BMS, (iv) in the case of any amendment to Section 1.2(a) or Section 1.2(c) which
adversely affects the rights of the Holders of the New Investor Registrable
Securities, shall obtain consent thereto from a majority of such Holders, and
(iv) shall in each such case, deliver copies of such consent in writing to any
Holders who did not execute the same.
2.4 Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the personal representatives,
successors and assigns of the respective parties hereto. The Company shall not
have the right to assign its rights or obligations hereunder or any interest
herein without obtaining the prior written consent of the Holders of at least
fifty percent (50%) of the aggregate of the Registrable Securities and the
Holders may assign or transfer their rights under this Agreement only as set
forth in Section 1.13.
2.5 General. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. In this Agreement the singular includes the
plural, the plural, the singular, the masculine gender includes the neuter,
masculine and feminine genders. This Agreement shall be governed by and
construed under the laws of the State of Delaware.
2.6 Severability. If any provisions of this Agreement shall be
found by any court of competent jurisdiction to be invalid or unenforceable, the
parties hereby waive such provision to the extent that it is found to be invalid
or unenforceable. Such provision shall, to the maximum extent allowable by law,
be modified by such court so that it becomes enforceable, and, as modified,
shall be enforced as any other provision hereof, all the other provisions hereof
continuing in full force and effect.
2.7 Termination of Prior Agreements. The Company and the
Investors representing sixty-six and two/thirds percent (66-2/3%) of the holders
of registrable securities under the Registration Rights Agreement dated May 12,
1994 between the Company and the signatories thereto, hereby agree that this
Agreement shall supersede the Prior Registration Rights Agreement and the Prior
Registration Rights Agreement is hereby terminated.
2.8 Counterparts. This Agreement may be executed in
counterparts, all of which together shall constitute one and the same
instrument.
15.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first above written.
SOMATIX THERAPY CORPORATION
By:
-------------------------------
Title: Executive Vice President
INVESTOR
By:
-------------------------------
Title:
-------------------------------
Date:
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16.
<PAGE>
<PAGE>
EXHIBIT A
Kleiner Perkins Caufield & Byers V
ATTN: Mr. Brook H. Byers
2750 Sand Hill Road
Menlo Park, CA 94025
Aeneas Venture Corporation
600 Atlantic Avenue
Boston, MA 02210
Health Care Partners, LLC
c/o 6111 North River Road
Rosemont, IL 60018
Aberlyn Capital Management, L.P.
1000 Winter Street
Waltham, MA 02154
Bristol-Myers Squibb Company
Rte. 206 & Province Line Road
P.O. Box 4000
Princeton, NJ 08543-4000
