<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 20, 1998
REGISTRATION NO. 333-57165
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
CENTAUR PHARMACEUTICALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 2384 77-030431
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NUMBER)
484 OAKMEAD PARKWAY
SUNNYVALE, CALIFORNIA 94086
(408) 822-1600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
JOSEPH L. TURNER
CHIEF FINANCIAL OFFICER
CENTAUR PHARMACEUTICALS, INC.
484 OAKMEAD PARKWAY
SUNNYVALE, CALIFORNIA 94086
(408) 822-1600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
BARRY J. KRAMER, ESQ. STEPHAN HUTTER, ESQ.
DAVID K. MICHAELS, ESQ. SHEARMAN & STERLING
JODY HUCKO, ESQ. BOCKENHEIMER LANDSTRASSE 55
JAMES M. HACKETT, ESQ. 60325 FRANKFURT AM MAIN
FENWICK & WEST LLP (49 69) 97107 230
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94306
(650) 494-0600
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses to be paid by the
Company in connection with the sale of the shares of Common Stock being
registered hereby. All amounts are estimates except for the Securities and
Exchange Commission registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee........... $ 27,878
Reimbursement of Managers' expenses(*)........................ 400,000
Accounting fees and expenses.................................. 225,000
Legal fees and expenses....................................... 550,000
Investor relations fees and expenses.......................... 450,000
Road show expenses............................................ 75,000
Transfer agent and registrar fees and expenses................ 10,000
Miscellaneous................................................. 12,122
----------
Total..................................................... $1,750,000
==========
</TABLE>
- --------
* Pursuant to the U.S. Underwriting Agreement and the International
Underwriting Agreement, the Managers have agreed to pay certain costs and
expenses of this offering, including the Swiss Exchange listing fee,
printing and engraving expenses and blue sky fees and expenses. The Company
has agreed to reimburse the Managers for these and certain other expenses,
up to CHF 600,000 ($400,000 based on an exchange rate of $0.6667 per Swiss
franc).
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Delaware General Corporation Law, the Registrant's
Certificate of Incorporation includes a provision that eliminates the personal
liability of its directors for monetary damages for breach of fiduciary duty
as a director except for liability (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) for acts or omissions
not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law or (iv) for any transaction from which the director derived an improper
personal benefit.
As permitted by Section 145 of the Delaware General Corporation Law, the
Bylaws of the Registrant provide that (i) the Registrant is required to
indemnify its directors and executive officers to the fullest extent permitted
by the Delaware General Corporation Law, (ii) the Registrant may indemnify its
other officers, employees and agents as set forth in the Delaware General
Corporation Law, (iii) to the fullest extent permitted by the Delaware General
Corporation Law, the Registrant is required to advance expenses, as incurred,
to its directors and executive officers in connection with a legal proceeding
(subject to certain exceptions), (iv) the rights conferred in the Bylaws are
not exclusive, (v) the Registrant is authorized to enter into indemnification
agreements with its directors, officers, employees and agents and (vi) the
Registrant may not retroactively amend its Bylaws provisions relating to
indemnity.
The Registrant's policy is to enter into indemnity agreements with each of
its directors and executive officers. The indemnity agreements provide that
directors and executive officers will be indemnified and held harmless to the
fullest possible extent permitted by law including against all expenses
(including attorneys' fees), judgments, fines and settlement amounts paid or
reasonably incurred by them in any action, suit or proceeding, including any
derivative action by or in the right of the Registrant, on account of their
services as directors, officers, employees or agents of the Registrant or as
directors, officers, employees or agents of any other company or enterprise
when they are serving in such capacities at the request of the Registrant. The
Registrant will not be obligated pursuant to the agreements to indemnify or
advance expenses to an indemnified party with respect to proceedings or claims
(i) initiated by the indemnified party and not by way of defense, except with
respect to a proceeding authorized by the Board of Directors and successful
proceedings brought to enforce a right to indemnification under the Indemnity
Agreement, (ii) for any amounts paid in settlement of a proceeding unless the
Registrant consents to such settlement, (iii) on account of any suit in which
judgment is rendered
II-1
<PAGE>
against the indemnified party for an accounting of profits made from the
purchase or sale by the indemnified party of securities of the Registrant
pursuant to the provisions of Section 16(b) of the Securities Exchange Act of
1934 and related laws, (iv) on account of conduct by a director which is
finally adjudged to have been in bad faith or conduct that the director did
not reasonably believe to be in, or not opposed to, the best interests of the
Registrant, (v) on account of any criminal action or proceeding arising out of
conduct that the director had reasonable cause to believe was unlawful or (vi)
if a final decision by a court having jurisdiction in the matter shall
determine that such indemnification is not lawful.
The indemnity agreement also provides for contribution in certain situations
in which the Registrant and a director or executive officer are jointly liable
but indemnification is unavailable, such contribution to be based on the
relative benefits received and the relative fault of the Registrant and the
director or executive officer. Contribution is not allowed in connection with
a Section 16(b) judgment, an adjudication of bad faith or conduct that a
director or executive officer did not reasonably believe to be in, or not
opposed to, the best interests of the Registrant or a proceeding arising out
of conduct a director or executive officer had reasonable cause to believe was
unlawful.
The indemnity agreement requires a director or executive officer to
reimburse the Registrant for all expenses advanced only to the extent it is
ultimately determined that the director or executive officer is not entitled,
under Delaware law, the Bylaws, the indemnity agreement or otherwise, to be
indemnified for such expenses. The indemnity agreement provides that it is not
exclusive of any rights a director or executive officer may have under the
Certificate of Incorporation, Bylaws, other agreements, any majority-in-
interest vote of the stockholders or vote of disinterested directors, the
Delaware law or otherwise.
The indemnification provision in the Bylaws, and the indemnity agreements
entered into between the Registrant and its directors and executive officers,
may be sufficiently broad to permit indemnification of the Registrant's
executive officers and directors for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act").
As authorized by the Registrant's Bylaws, the Registrant, with approval by
the Board, expects to purchase director and officer liability insurance.
See also the undertakings set out in response to Item 17.
Reference is made to the following documents filed as exhibits to this
Registration Statement regarding relevant indemnification provisions described
above and elsewhere herein:
<TABLE>
<CAPTION>
DOCUMENT EXHIBIT NUMBER
-------- --------------
<S> <C>
U.S. Underwriting Agreement............................... 1.01
International Underwriting Agreement...................... 1.02
Registrant's Restated Certificate of Incorporation........ 3.01
Form of Registrant's Amended and Restated Certificate of
Incorporation to be filed immediately following the
offering................................................. 3.02
Registrant's Bylaws....................................... 3.03
Third Amended and Restated Investors' Rights Agreement,
dated as of February 14, 1997............................ 4.02
Form of Indemnification Agreement......................... 10.05
</TABLE>
II-2
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The following table sets forth information regarding all securities sold by
the Registrant since July 1, 1995.
<TABLE>
<CAPTION>
AGGREGATE PURCHASE
DATE OF TITLE OF NUMBER OF PRICE AND FORM OF
CLASS OF PURCHASERS SALE(S) SECURITIES(1) SECURITIES CONSIDERATION
------------------- ---------- ------------------- ---------- -------------------
<S> <C> <C> <C> <C>
Neil Solomon and Andrew 2/15/96 Common Stock 2,730 Issued in
Newcorn................. connection with
consulting services
rendered
Prospektiva Investments. 8/12/96 Warrant to purchase 10,000 Issued in
Common Stock at connection with
$3.00 per share consulting services
rendered
52 unaffiliated
purchasers and the
following purchasers
that were then officers,
directors and their
affiliates, and greater
than 5% stockholders:
Paul F. Glenn, Trustee,
Paul F. Glenn Revocable
Trust; Glenn Foundation
for Medical Research;
Brian D. Frenzel; Selvi
Vescovi; Charter
Ventures II, L.P.; Menlo
Ventures IV, L.P.;
Oklahoma Medical
Research Foundation; and
Dillon, Read & Co. Inc.,
as agent................ 2/14/97 to Series D Preferred 2,200,000 $16,500,000 cash
10/3/97 Stock
Prospektiva Investments. 9/19/97 Warrant to purchase 10,000 Issued in
Common Stock at connection with
$3.00 per share consulting services
rendered
Hans-Jurg Buss.......... 2/14/98 Warrant to purchase 10,000 Issued in
Common Stock at connection with
$4.00 per share consulting services
rendered
Steinar Engelsen........ 2/14/98 Warrant to purchase 5,000 Issued in
Common Stock at connection with
$4.00 per share consulting services
rendered
149 officers, directors,
employees
and/or consultants...... 7/1/95 to Options to purchase 1,344,979 Options granted for
7/17/98 Common Stock under no cash
the 1993 Equity consideration
Incentive Plan.
Exercise prices
range from $0.30 to
$10.00 per
share.(2)
27 officers, directors,
employees
and/or consultants...... 7/1/95 to Common Stock(3) 514,550 $97,576 cash (upon
6/30/98 exercise of stock
options with
exercise prices
ranging from $0.10
to $4.00 per share)
Private Equity Bridge
Invest Ltd.............. 7/13/98 Common Stock 26,550 $51,109 cash (upon
exercise of a
warrant with
exercise price of
$1.925 per share)
Aberlyn Holding Company,
Inc..................... 7/23/98 Common Stock 5,695 $10,963 in Common
Stock of the
Company (upon net
exercise of a
warrant with
exercise price of
$1.925 per share)
</TABLE>
- --------
(1) Unless otherwise noted, all sales were made in reliance on Section 4(2) of
the Securities Act and/or Regulation D promulgated under the Securities
Act. The securities were sold to a limited number of people with no
general solicitation or advertising. The purchasers were sophisticated
investors with access to all relevant information necessary to evaluate
the investment who represented to the Registrant that the shares were
being acquired for investment.
(2) With respect to the grant of stock options, exemptions from registration
under the Securities Act were unnecessary in that none of such
transactions involved a "sale" of securities as such term is used in
Section 2(3) of the Securities Act.
(3) All sales of Common Stock pursuant to the exercise of stock options
granted under the Registrant's stock option plan were made pursuant to the
exemption from the registration requirements of the Securities Act
afforded by Rule 701 promulgated under the Securities Act as transactions
pursuant to a compensatory benefit plan or a written contract relating to
compensation.
II-3
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following exhibits are filed herewith:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
1.01 --U.S. Underwriting Agreement.*
1.02 --International Underwriting Agreement.*
3.01 --Registrant's Restated Certificate of Incorporation.
3.02 --Form of Registrant's Amended and Restated Certificate of Incorpo-
ration to be filed immediately following the offering.**
3.03 --Registrant's Bylaws.
4.01 --Form of Specimen Certificate for Registrant's Common Stock.
4.02 --Third Amended and Restated Investors' Rights Agreement, dated as
of February 14, 1997.**
4.03 --Amendment to Third Amended and Restated Investors' Rights Agree-
ment and Third Amended and Restated Voting Agreement and Approval
of Election of Director, dated as of June 9, 1998.**
5.01 --Opinion of Fenwick & West LLP regarding legality of the securities
being registered.*
10.01 --Registrant's 1993 Equity Incentive Plan, as amended.**
10.02 --Registrant's 1998 Equity Incentive Plan.**
10.03 --Registrant's 1998 Directors Stock Option Plan.**
10.04 --Registrant's 1998 Employee Stock Purchase Plan.**
10.05 --Form of Indemnification Agreement entered into by Registrant with
each of its directors and executive officers.**
10.06 --Master Loan and Security Agreement between Registrant and Finova
Technology Finance, Inc., dated as of November 3, 1997; Loan and
Security Agreement No. 1 dated April 22, 1998 between Registrant
and Finova Technology Finance, Inc.; Commitment Letter between
the Registrant and Finova Technology Finance, Inc., dated as of
October 7, 1997 (as revised on December 23, 1997), as amended
April 20, 1998; Leasehold Deeds of Trust dated November 3, 1997
executed by the Registrant; Promissory Note dated April 22, 1998
executed by Registrant.**
10.07 --Lease for 484 Oakmead Parkway, Sunnyvale, CA dated February 25,
1993, as amended August 18, 1995.**
10.08 --Sublease for additional space at 484 Oakmead Parkway, Sunnyvale,
CA dated March 22, 1995.**
10.09 --Lease for 1220 Memorex Drive, Suite 100, Santa Clara, CA dated
February 12, 1997.**
10.10 --Lease for 1220 Memorex Drive, Suites 200 and 300, Santa Clara, CA
dated June 12, 1997.**
10.11 --License with UKRF and OMRF dated July 15, 1992.+**
10.12 --First Amendment to License with UKRF and OMRF dated June 29,
1995.+**
10.13 --Development, License and Marketing Agreement with Astra AB dated
June 26, 1995.+**
10.14 --Supply Agreement with Astra AB dated June 26, 1995.+**
10.15 --Amendments to Development, License and Marketing Agreement with
Astra AB dated July 8, 1997 and October 7, 1997.**
10.16 --Development, Patent and Trademark/Know-How Licensing and Supply
Agreement-- CPI-1189 with H. Lundbeck A/S dated October 31, 1996,
as amended as of October 31, 1996.+**
10.17 --Employment Agreement with Brian D. Frenzel dated December 1, 1993,
and associated Stock Option Agreements.**
10.18 --License Agreement dated January 15, 1998 between Registrant and
Cutanix Corporation.+**
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
10.19 --Services and Supply Agreement dated January 15, 1998 between
Registrant and Cutanix Corporation.+**
10.20 --Stockholders' Agreement dated January 15, 1998 by and among
Cutanix Corporation and certain stockholders of Cutanix
Corporation.
10.21 --License Agreement dated January 1, 1998 by and among OMRF and
Registrant.+
23.01 --Consent of Fenwick & West LLP (included in Exhibit 5.01).*
23.02 --Consent of Ernst & Young LLP, independent auditors.**
24.01 --Power of Attorney (see Page II-6 of this Registration State-
ment).**
27.01 --Amended Financial Data Schedule.**
27.02 --Financial Data Schedule.**
</TABLE>
- --------
* To be supplied by amendment.
** Previously filed.
+ Confidential treatment is being sought with respect to certain portions of
this agreement. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
(b) The following financial statement schedule is filed herewith:
Schedule II--Valuation and Qualifying Accounts
Other financial statement schedules are omitted because the information
called for is not required or is shown either in the financial statements or
the notes thereto.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes to provide to the Managers at
the closing specified in the Purchase Agreement certificates in such
denominations and registered in such names as required by the Managers to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 14 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THE REGISTRANT HAS DULY
CAUSED THIS AMENDMENT TO ITS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF SUNNYVALE, STATE
OF CALIFORNIA, ON THE 20TH DAY OF AUGUST, 1998.
CENTAUR PHARMACEUTICALS, INC.
/s/ JOSEPH L. TURNER
By: _________________________________
Joseph L. TurnerChief Financial
Officer, Treasurer and Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS AMENDMENT TO THE
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
Principal Executive Officer:
* President, Chief Executive August 20, 1998
____________________________________ Officer and a Director
Brian D. Frenzel
Principal Financial Officer and
Principal Accounting Officer:
/s/ Joseph L. Turner Chief Financial Officer, August 20, 1998
____________________________________ Treasurer and Secretary
Joseph L. Turner
Additional Directors:
* Director August 20, 1998
____________________________________
John M. Carney
* Director August 20, 1998
____________________________________
Mark R. Collins
* Director August 20, 1998
____________________________________
Graham K. Crooke
* Director August 20, 1998
____________________________________
Charles R. Engles
* Director August 20, 1998
____________________________________
Steinar J. Engelsen
* Director August 20, 1998
____________________________________
Selvi Vescovi
*By: /s/ Joseph L. Turner
____________________________________
Joseph L. Turner
Attorney-in-fact
</TABLE>
II-6
<PAGE>
CENTAUR PHARMACEUTICALS, INC.
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONS
--------------------
BALANCE AT CHARGED CHARGED BALANCE AT
BEGINNING TO COSTS AGAINST END OF
OF YEAR AND EXPENSES REVENUE DEDUCTIONS YEAR
---------- ------------ ------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year ended December 31,
1997 deducted from
asset account:
Allowance for doubtful
accounts.............. $ 0 $ -- $1,600 $ 0 $1,600
======= ======= ====== ====== ======
Year ended December 31,
1996 deducted from
asset account:
Allowance for doubtful
accounts.............. $ 0 $ -- $ -- $ -- $ 0
======= ======= ====== ====== ======
Year ended December 31,
1995 deducted from
asset account:
Allowance for doubtful
accounts.............. $ 0 $ -- $ -- $ -- $ 0
======= ======= ====== ====== ======
</TABLE>
S-1
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S> <C>
1.01 --U.S. Underwriting Agreement.*
1.02 --International Underwriting Agreement.*
3.01 --Registrant's Restated Certificate of Incorporation.
3.02 --Form of Registrant's Amended and Restated Certificate of In-
corporation to be filed immediately following the offer-
ing.**
3.03 --Registrant's Bylaws.
4.01 --Form of Specimen Certificate for Registrant's Common Stock.
4.02 --Third Amended and Restated Investors' Rights Agreement,
dated as of February 14, 1997.**
4.03 --Amendment to Third Amended and Restated Investors' Rights
Agreement and Third Amended and Restated Voting Agreement
and Approval of Election of Director, dated as of June 9,
1998.**
5.01 --Opinion of Fenwick & West LLP regarding legality of the se-
curities being registered.*
10.01 --Registrant's 1993 Equity Incentive Plan, as amended.**
10.02 --Registrant's 1998 Equity Incentive Plan.**
10.03 --Registrant's 1998 Directors Stock Option Plan.**
10.04 --Registrant's 1998 Employee Stock Purchase Plan.**
10.05 --Form of Indemnification Agreement entered into by Registrant
with each of its directors and executive officers.**
10.06 --Master Loan and Security Agreement between Registrant and
Finova Technology Finance, Inc., dated as of November 3,
1997; Loan and Security Agreement No. 1 dated April 22,
1998 between Registrant and Finova Technology Finance,
Inc.; Commitment Letter between the Registrant and Finova
Technology Finance, Inc., dated as of October 7, 1997 (as
revised on December 23, 1997), as amended April 20, 1998;
Leasehold Deeds of Trust dated November 3, 1997 executed by
the Registrant; Promissory Note dated April 22, 1998 exe-
cuted by Registrant.**
10.07 --Lease for 484 Oakmead Parkway, Sunnyvale, CA dated February
25, 1993, as amended August 18, 1995.**
10.08 --Sublease for additional space at 484 Oakmead Parkway, Sunny-
vale, CA dated March 22, 1995.**
10.09 --Lease for 1220 Memorex Drive, Suite 100, Santa Clara, CA
dated February 12, 1997.**
10.10 --Lease for 1220 Memorex Drive, Suites 200 and 300, Santa
Clara, CA dated June 12, 1997.**
10.11 --License with UKRF and OMRF dated July 15, 1992.+**
10.12 --First Amendment to License with UKRF and OMRF dated June 29,
1995.+**
10.13 --Development, License and Marketing Agreement with Astra AB
dated June 26, 1995.+**
10.14 --Supply Agreement with Astra AB dated June 26, 1995.+**
10.15 --Amendments to Development, License and Marketing Agreement
with Astra AB dated July 8, 1997 and October 7, 1997.**
10.16 --Development, Patent and Trademark/Know-How Licensing and
Supply Agreement-- CPI-1189 with H. Lundbeck A/S dated Oc-
tober 31, 1996, as amended as of October 31, 1996.+**
10.17 --Employment Agreement with Brian D. Frenzel dated December 1,
1993, and associated Stock Option Agreements.**
10.18 --License Agreement dated January 15, 1998 between Registrant
and Cutanix Corporation.+**
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
------- -------------
<C> <S>
10.19 --Services and Supply Agreement dated January 15, 1998 between
Registrant and Cutanix Corporation.+**
10.20 --Stockholders' Agreement dated January 15, 1998 by and among
Cutanix Corporation and certain stockholders of Cutanix
Corporation.
10.21 --License Agreement dated January 1, 1998 by and among OMRF and
Registrant.+
23.01 --Consent of Fenwick & West LLP (included in Exhibit 5.01).*
23.02 --Consent of Ernst & Young LLP, independent auditors.**
24.01 --Power of Attorney (see Page II-6 of this Registration State-
ment).**
27.01 --Amended Financial Data Schedule.**
27.02 --Financial Data Schedule.**
</TABLE>
- --------
* To be supplied by amendment.
** Previously filed.
+ Confidential treatment is being sought with respect to certain portions of
this agreement. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
<PAGE>
EXHIBIT 3.01
RESTATED CERTIFICATE OF INCORPORATION
OF
CENTAUR PHARMACEUTICALS, INC.
ARTICLE I
The name of the corporation is Centaur Pharmaceuticals, Inc.
ARTICLE II
The address of the registered office of the corporation in the State
of Delaware is 1013 Centre Road, Wilmington, New Castle County. The name of its
registered agent at that address is Corporation Service Company.
ARTICLE III
The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
ARTICLE IV
A. Authorization of Shares
-----------------------
The total number of shares of all classes of stock which the
corporation has authority to issue is Forty-Six Million Nine Hundred Twenty-Two
Thousand Seven Hundred Thirty-Five (46,922,735) shares, consisting of Thirty-
Three Million (33,000,000) shares of Common Stock, $0.001 par value per share,
and Thirteen Million Nine Hundred Twenty-Two Thousand Seven Hundred Thirty-Five
(13,922,735) shares of Preferred Stock, $0.001 par value per share, of which Two
Million (2,000,000) shares are designated Series A Preferred Stock, Two Million
Five Hundred Forty-Five Thousand Four Hundred Fifty-Four (2,545,454) shares are
designated Series B Preferred Stock, Four Million One Hundred Seventy-Seven
Thousand Two Hundred Eighty-One (4,177,281) shares are designated Series C
Preferred Stock and Two Million Two Hundred Thousand (2,200,000) shares are
designated Series D Preferred Stock.
B. Designation of Future Series of Preferred Stock
-----------------------------------------------
The Board of Directors is authorized, subject to any limitations
prescribed by the law of the State of Delaware, to provide for the issuance of
the shares of Preferred Stock in one or more series, and, by filing a
certificate of designation pursuant to the applicable law of the State of
Delaware, to establish from time to time the number of shares to be included in
each such series, to fix the designation, powers, preferences and rights of the
shares of each such
<PAGE>
series and any qualifications, limitations or restrictions thereof and to
increase or decrease the number of shares of any such series (but not below the
number of shares of such series then outstanding). Subject to approval by the
Board of Directors, the number of authorized shares of Preferred Stock may be
increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of the stock
of the corporation entitled to vote, unless a vote of any other holders is
required pursuant to a certificate or certificates establishing a series of
Preferred Stock.
Except as expressly provided in any certificate of designation
designating any series of Preferred Stock pursuant to the foregoing provisions
of this Article IV, any new series of Preferred Stock may be designated, fixed
and determined as provided herein by the Board of Directors without approval of
the holders of Common Stock or the holders of Preferred Stock, or any series
thereof, and any such new series may have powers, preferences and rights,
including, without limitation, voting rights, dividend rights, liquidation
rights, redemption rights and conversion rights senior to, junior to or pari
passu with the rights of the Common Stock, the Preferred Stock, or any future
class or series of Preferred Stock or Common Stock.
If the certificate of designation creating a series of Preferred Stock
so provides, any shares of a series of Preferred Stock that are acquired by the
corporation, whether by redemption, purchase, conversion or otherwise, so that
such shares are issued but not outstanding, may not be reissued as shares of
such series or as shares of the class of Preferred Stock. Upon the retirement of
any such shares and the filing of a certificate of retirement pursuant to
Sections 103 and 243 of the Delaware General Corporation Law with respect
thereto, the shares of such series shall be eliminated and the number of shares
of Preferred Stock shall be reduced accordingly.
ARTICLE V
The rights, preferences, privileges and restrictions granted to and
imposed on the Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock and the Common Stock are as follows:
1. DEFINITIONS. For purposes of this Article V, the following
-----------
definitions shall apply:
1.1 "BOARD" shall mean the Board of Directors of the
-----
corporation.
1.2 "CORPORATION" shall mean Centaur Pharmaceuticals, Inc.
-----------
1.3 "COMMON STOCK" shall mean the Common Stock, $0.001 par
------------
value of the corporation.
-2-
<PAGE>
1.4 "LIQUIDATION PREFERENCE" shall mean $0.50 per share for the
----------------------
Series A Preferred Stock, $1.375 per share for the Series B Preferred Stock,
$1.75 per share for the Series C Preferred Stock and $7.50 per share for the
Series D Preferred Stock, plus any declared but unpaid dividends on such share
of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock
or Series D Preferred Stock, as appropriately adjusted for stock dividends,
splits, combinations and the like.
1.5 "ORIGINAL ISSUE DATE" shall mean the date on which the first
-------------------
share of Series D Preferred Stock is issued by the corporation.
1.6 "ORIGINAL ISSUE PRICE" shall mean $0.50 per share for the
--------------------
Series A Preferred Stock, $1.375 per share for the Series B Preferred Stock,
$1.75 per share for the Series C Preferred Stock and $7.50 per share for the
Series D Preferred Stock.
1.7 "PREFERRED STOCK" shall mean the Series A Preferred Stock,
---------------
the Series B Preferred Stock, the Series C Preferred Stock and the Series D
Preferred Stock, collectively.
1.8 "SERIES A PREFERRED STOCK" shall mean the Series A Preferred
------------------------
Stock, $0.001 par value, of the corporation.
1.9 "SERIES B PREFERRED STOCK" shall mean the Series B Preferred
------------------------
Stock, $0.001 par value, of the corporation.
1.10 "SERIES C PREFERRED STOCK" shall mean the Series C Preferred
------------------------
Stock, $0.001 par value, of the corporation.
1.11 "SERIES D PREFERRED STOCK" shall mean the Series D Preferred
------------------------
Stock, $0.001 par value, of the corporation.
1.12 "SUBSIDIARY" shall mean any corporate entity of which at
----------
least fifty percent (50%) of the outstanding voting stock is at the time owned
directly or indirectly by the corporation or by one or more of such subsidiary
corporate entities.
2. DIVIDEND RIGHTS.
---------------
2.1 PAYMENT OF DIVIDENDS. The holders of Preferred Stock shall
--------------------
be entitled to receive, out of any funds legally available therefor, dividends
on each outstanding share, if, when and as declared by the Board. The Board
shall not be under any obligation to declare dividends on Preferred Stock,
except as set forth in the following sentence. No dividends (other than
dividends payable in Common Stock) shall be declared or paid to the holders of
Common Stock unless there is first or simultaneously declared and paid on each
outstanding share of Series A Preferred Stock, Series B Preferred Stock, Series
C Preferred Stock and Series D Preferred Stock a dividend (payable in the same
type and proportionate amount of cash and/or property as the dividend then to be
declared and paid on the Common Stock) in an amount
-3-
<PAGE>
greater than or equal to the amount obtained by multiplying (a) the amount of
the dividend to be paid on each share of Common Stock, by (b) the Conversion
Rate (as hereinafter defined) for the respective series of Preferred Stock.
2.2 NON-CASH DIVIDENDS. Whenever a dividend provided for in
------------------
this Section 2 shall be payable in property other than cash, the value of such
dividend shall be deemed to be the fair market value of such property as
determined in good faith by the Board.
3. LIQUIDATION RIGHTS. In the event of any liquidation, dissolution
------------------
or winding up of the corporation, whether voluntary or involuntary, the funds
and assets of the corporation that may be legally distributed to the
corporation's stockholders (the "Available Funds and Assets") shall be
--------------------------
distributed to stockholders in the following manner:
3.1 PREFERRED STOCK. The holders of each share of each series
---------------
of Preferred Stock then outstanding shall be entitled to be paid, out of the
Available Funds and Assets, and prior and in preference to any payment or
distribution (or any setting apart of any payment or distribution) of any
Available Funds and Assets on any shares of Common Stock, an amount per share
equal to the Liquidation Preference of each such series of Preferred Stock. If
upon any liquidation, dissolution or winding up of the corporation, the
Available Funds and Assets shall be insufficient to permit the payment to
holders of the Preferred Stock of their full preferential amount described in
this subsection, then all of the Available Funds and Assets shall be distributed
among the holders of the then outstanding Preferred Stock, with each holder of
Preferred Stock entitled to a proportion of the Available Funds and Assets equal
to the total Liquidation Preference of the Preferred Stock held by such holder,
if such Liquidation Preference were paid in full, divided by the total
Liquidation Preference of the Preferred Stock held by all holders of Preferred
Stock, if such Liquidation Preference were paid in full.
3.2 REMAINING ASSETS. If there are any Available Funds and
----------------
Assets remaining after the payment or distribution (or the setting aside for
payment or distribution) to the holders of the Preferred Stock of their full
preferential amounts described above in this Section 3, then all such remaining
Available Funds and Assets shall be distributed among the holders of the then
outstanding Common Stock pro rata according to the number of shares of Common
Stock held by each holder thereof.
3.3 MERGER OR SALE OF ASSETS. A (i) consolidation or merger of
------------------------
the corporation with or into any other entity or entities in which the holders
of the corporation's outstanding shares immediately before such consolidation or
merger do not, immediately after such consolidation or merger, hold stock
representing a majority of the voting power of the surviving entity or entities
of such consolidation or merger; or (ii) sale of all or substantially all of the
assets of the corporation, shall each be deemed to be a liquidation, dissolution
or winding up of the corporation as those terms are used in this Section 3.
3.4 NON-CASH CONSIDERATION. If any assets of the corporation
----------------------
distributed to stockholders in connection with any liquidation, dissolution, or
winding up of the corporation are other than cash, then the value of such assets
shall be their fair market value as
-4-
<PAGE>
determined by the Board, except that any securities to be distributed to
------ ----
stockholders in a liquidation, dissolution, or winding up of the corporation
shall be valued as follows:
(a) The method of valuation of securities not subject to
investment letter or other similar restrictions on free marketability shall be
as follows:
(i) if the securities are then traded on a national
securities exchange or the Nasdaq National Market (or a similar national
quotation system), then the value shall be deemed to be the average of the
closing prices of the securities on such exchange or system over the 30-day
period ending three (3) days prior to the distribution; and
(ii) if actively traded over-the-counter, then the
value shall be deemed to be the average of the closing bid prices over the 30-
day period ending three (3) days prior to the distribution; and
(iii) if there is no active public market, then the
value shall be the fair market value thereof, as determined in good faith by the
Board.
(b) The method of valuation of securities subject to
investment letter or other restrictions on free marketability shall be to make
an appropriate discount from the market value determined as above in
subparagraphs (a)(i), (ii) or (iii) of this subsection to reflect the
approximate fair market value thereof, as determined in good faith by the Board.
4. REDEMPTION.
----------
4.1 MANDATORY REDEMPTION OF SERIES A, SERIES B. SERIES C AND
--------------------------------------------------------
SERIES D PREFERRED STOCK.
- ------------------------
(a) Schedule for Redemption. Subject to the terms and
-----------------------
conditions of this subsection and upon receipt of a Redemption Request (as
defined below), the corporation shall redeem, ninety (90) days after receipt of
a Redemption Request (the "Redemption Date"), all of the shares of the Series A
---------------
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock outstanding on the Redemption Date.
(b) Request for Redemption. A request for redemption
----------------------
pursuant to this subsection 4.1 (a "Redemption Request") shall be in writing,
------------------
shall state that it is a request for redemption of all the Series A, Series B,
Series C and Series D Preferred Stock under this subsection 4.1, and shall be
signed by the holders of at least sixty-six and two-thirds percent (66 2/3%) of
the then outstanding shares of Preferred Stock voting on an as-if-converted-
into-Common Stock basis. The Redemption Request must be received by the
corporation between October 1, 1999 and September 30, 2000, inclusive. Upon
receipt of such Redemption Request, the corporation shall redeem the shares of
Series A, Series B, Series C and Series D Preferred Stock from any source of
funds legally available therefor, on the Redemption Date and at the respective
redemption prices set forth in this subsection.
-5-
<PAGE>
(c) Redemption Price. The redemption price for each
----------------
share of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock and Series D Preferred Stock shall be an amount equal to the Original
Issue Price for such share of Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock and Series D Preferred Stock, respectively, plus
all declared and unpaid dividends thereon, as appropriately adjusted for stock
dividends, splits, combinations and the like.
(d) Insufficient Legally Available Funds.
------------------------------------
(i) Proportional Redemption. If on the Redemption
-----------------------
Date, the funds and assets of the corporation legally available to redeem the
Series A, Series B, Series C and Series D Preferred Stock shall be insufficient
to redeem all shares of Series A, Series B, Series C and Series D Preferred
Stock to be redeemed on the Redemption Date, then the corporation shall redeem
the maximum possible number of shares of Series A, Series B, Series C and Series
D Preferred Stock on the Redemption Date; provided, however, that (x) the
-------- -------
corporation shall redeem the same percentage of Series A Preferred Stock, Series
B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, and
(y) any such redemption shall be pro rata by series among the holders of Series
A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series
D Preferred Stock.
(ii) Unredeemed Shares. Any shares of Series A and/or
-----------------
Series B and/or Series C and/or Series D Preferred Stock which are to be
redeemed hereunder but which have not been redeemed due to insufficient legally
available funds and assets of the corporation (the "Unredeemed Shares") shall be
-----------------
carried forward and shall be redeemed pro rata, as set forth in subparagraph
4.1(d)(i), on the 30th day of each calendar quarter thereafter, to the full
extent of legally available funds and assets of the corporation, from the funds
and assets of the corporation legally available at such time, until all
Unredeemed Shares are redeemed. Subject to the provision of Section 4.4,
Unredeemed Shares shall continue to be outstanding and entitled to all dividend,
liquidation, conversion and other rights, preferences, privileges and
restrictions of the Series A, Series B, Series C and Series D Preferred Stock,
respectively, until such shares have been converted or redeemed.
4.2 REDEMPTION NOTICE.
-----------------
(a) Timing; Address for Notice. If the corporation has
--------------------------
received a Redemption Request, then at least twenty (20) but no more than sixty
(60) days prior to the Redemption Date, the corporation shall mail, postage
prepaid, or send by a nationally or internationally (as applicable) recognized
express courier service, fees prepaid, a written notice (the "Redemption
----------
Notice") to each holder of record of the Series A and/or Series B and/or Series
- ------
C and/or Series D Preferred Stock on the applicable Record Date, at the address
last shown on the records of the corporation for such holder or given by the
holder to the corporation for the purpose of notice.
(b) Contents of Notice. The Redemption Notice shall
------------------
specify the following: (i) that the redemption will be effected on the
Redemption Date set forth therein;
-6-
<PAGE>
(ii) the applicable redemption price(s); (iii) the place at which payment may be
obtained; (iv) the date on which such holder's conversion rights as to such
shares terminate (as set forth in Section 6); and (v) a request that such holder
surrender to the corporation, in the manner and at the place designated, the
certificate or certificates representing the shares to be redeemed.
4.3 SURRENDER OF CERTIFICATES. On or after the Redemption Date,
-------------------------
each holder of Preferred Stock to be redeemed shall (unless such holder has
previously exercised his right to convert such shares of Preferred Stock into
Common Stock as provided in Section 6 below), surrender the certificate(s)
representing such shares of Preferred Stock to be redeemed on such Redemption
Date to the corporation, in the manner and at the place designated in the
Redemption Notice, and thereupon the redemption price for such shares shall be
payable to the order of the person whose name appears on such certificate(s) as
the owner thereof, and each surrendered certificate shall be canceled and
retired. If less than all of the shares represented by such certificate are
redeemed, then the corporation shall promptly issue a new certificate
representing the unredeemed shares.
4.4 EFFECT OF REDEMPTION. If the Redemption Notice has been
--------------------
given, and if on the Redemption Date the redemption price for the shares of
Series A, Series B, Series C and Series D Preferred Stock to be redeemed on such
Redemption Date is either paid or irrevocably deposited or set aside for
payment, then notwithstanding that the certificates evidencing any of the shares
of Preferred Stock so called for redemption shall not have been surrendered,
such shares shall not thereafter be transferred on the corporation's books, and
all of the rights of the holders of such shares with respect to such shares
shall terminate after the Redemption Date, except only the right of the holders
to receive the redemption price without interest upon surrender of their
certificate(s) therefor. Shares which have been called for redemption shall not
be deemed to be outstanding shares for the purpose of voting or determining the
total number of shares entitled to vote on any matter on and after the date of
the Redemption Notice and a sum sufficient to redeem such shares has been
irrevocably deposited or set aside to pay the redemption price to the holders of
such shares upon surrender of certificates therefor. Notwithstanding the
foregoing, in the event that shares of Preferred Stock are not redeemed due to a
default in payment by the corporation or because the corporation does not have
sufficient legally available funds, such shares of Preferred Stock shall remain
outstanding and shall be entitled to all of the rights and preferences provided
herein and counted by the corporation for all voting purposes as provided
herein.
5. VOTING RIGHTS.
-------------
5.1 COMMON STOCK. Each holder of shares of Common Stock shall
------------
be entitled to one (1) vote for each share thereof held.
5.2 PREFERRED STOCK. Each holder of shares of Preferred Stock
---------------
shall be entitled to the number of votes equal to the number of whole shares of
Common Stock into which such shares of Preferred Stock could be converted
pursuant to the provisions of Section 6 below at the record date for the
determination of the stockholders entitled to vote on such matters or, if no
such record date is established, the date such vote is taken or any written
consent of stockholders is solicited.
-7-
<PAGE>
5.3 GENERAL. Subject to the foregoing provisions of this
-------
Section 5, each holder of Preferred Stock shall have full voting rights and
powers equal to the voting rights and powers of the holders of Common Stock, and
shall be entitled to notice of any stockholders' meeting in accordance with the
bylaws of the corporation (as in effect at the time in question) and applicable
law, and shall be entitled to vote, together with the holders of Common Stock,
with respect to any question upon which holders of Common Stock have the right
to vote, except as may be otherwise provided by applicable law. Except as
otherwise expressly provided herein or as required by law, the holders of
Preferred Stock and the holders of Common Stock shall vote together and not as
separate classes. Nothing herein shall limit the ability of the corporation and
the holders of the corporation's capital stock to enter into voting agreements.
6. CONVERSION RIGHTS. The outstanding shares of Preferred Stock
-----------------
shall be convertible into Common Stock as follows:
6.1 OPTIONAL CONVERSION.
-------------------
(a) Subject to the terms and conditions of this Section 6,
each share of Preferred Stock shall be convertible, at the option of the holder
thereof and without the payment of any additional consideration therefor, at any
time or from time to time, into fully paid and nonassessable shares of Common
Stock. The number of shares of Common Stock which a holder of Preferred Stock
shall be entitled to receive upon conversion thereof shall be the product
obtained by multiplying the Conversion Rate (as defined herein) for the series
of Preferred Stock held by such holder by the number of shares of such series of
Preferred Stock being converted. In the event of a redemption pursuant to
Section 4 hereof, the conversion rights set forth in this subsection 6.1 shall
terminate at the close of business on the business day immediately preceding the
Redemption Date as to the shares of Preferred Stock to be redeemed pursuant to
Section 4 on such Redemption Date, provided that in the event that shares of
Preferred Stock are not redeemed due to a default in payment by the corporation
or because the corporation does not have sufficient legally available funds, the
conversion rights set forth in this subsection 6.1 for such shares of Preferred
Stock shall survive and continue as if such shares were not to be redeemed.
(b) Each holder of Preferred Stock who elects to convert
the same into shares of Common Stock shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the corporation or any
transfer agent for the Preferred Stock or Common Stock, and shall give written
notice to the corporation at such office that such holder elects to convert the
same and shall state therein the number of shares of Preferred Stock being
converted. Thereupon the corporation shall promptly issue and deliver to such
holder a certificate or certificates for the number of shares of Common Stock to
which such holder is entitled upon such conversion. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of such surrender of the certificate or certificates representing the shares of
Preferred Stock to be converted, and the person entitled to receive the shares
of Common Stock issuable upon such conversion shall be treated for all purposes
as the record holder of such shares of Common Stock on such date.
-8-
<PAGE>
6.2 AUTOMATIC CONVERSION.
--------------------
(a) Each share of Preferred Stock shall automatically be
converted into fully paid and nonassessable shares of Common Stock at the then
effective Conversion Rate, as provided herein: (i) immediately prior to the
closing of an underwritten public offering pursuant to (A) an effective
registration statement filed under the Securities Act of 1933, as amended,
and/or (B) a listing of the Company's Common Stock on the Swiss Exchange, in
either case in connection with and/or covering the offer and sale of Common
Stock for the account of the corporation in which the aggregate public offering
price (before deduction of underwriters' discounts and commissions) equals or
exceeds $10,000,000 and the public offering price per share of which equals or
exceeds $4.125 per share, such price per share of Common Stock to be
appropriately adjusted to reflect Common Stock Events (as defined in subsection
6.4); provided, however, that notwithstanding anything to the contrary herein,
-------- -------
shares of Series D Preferred Stock shall not automatically be
converted into shares of Common Stock pursuant to this clause (a)(i) of this
subsection 6.2 unless the public offering price per share equals or exceeds
$7.50 per share, such price per share to be appropriately adjusted to reflect
Common Stock Events; or (ii) upon the corporation's receipt of the written
consent of the holders of more than sixty percent (60%) of the then outstanding
shares of Preferred Stock to the conversion of all then outstanding Preferred
Stock under this Section 6; provided, however, that an automatic conversion
effected pursuant to clause (ii) of this subsection 6.2(a) shall not apply to
the Series D Preferred Stock unless holders of a majority of the then-
outstanding shares of Series D Preferred Stock approve of such automatic
conversion.
(b) Upon the occurrence of any event specified in
subparagraph 6.2(a)(i) or (ii) above, the outstanding shares of Preferred Stock
shall be converted into Common Stock automatically without the need for any
further action by the holders of such shares and whether or not the certificates
representing such shares are surrendered to the corporation or its transfer
agent; provided, however, that the corporation shall not be obligated to issue
-------- -------
certificates evidencing the shares of Common Stock issuable upon such conversion
unless the certificates evidencing such shares of Preferred Stock are either
delivered to the corporation or its transfer agent as provided below, or the
holder notifies the corporation or its transfer agent that such certificates
have been lost, stolen or destroyed and executes an agreement satisfactory to
the corporation to indemnify the corporation from any loss incurred by it in
connection with such certificates. Upon the occurrence of such automatic
conversion of the Preferred Stock, the holders of Preferred Stock shall
surrender the certificates representing such shares at the office of the
corporation or any transfer agent for the Preferred Stock or Common Stock.
Thereupon, there shall be issued and delivered to such holder promptly at such
office and in its name as shown on such surrendered certificate or certificates,
a certificate or certificates for the number of shares of Common Stock into
which the shares of Preferred Stock surrendered were convertible on the date on
which such automatic conversion occurred.
6.3 CONVERSION RATE AND CONVERSION PRICE. Each share of
------------------------------------
Preferred Stock shall be convertible in accordance with subsection 6.1 or
subsection 6.2 above into the number of shares of Common Stock (the "Conversion
----------
Rate") which results from dividing the Original Issue Price for such series of
- ----
Preferred Stock by the conversion price for such series of
-9-
<PAGE>
Preferred Stock that is in effect at the time of conversion (the "Conversion
----------
Price"). The initial Conversion Price for each series of Preferred Stock shall
- -----
be the Original Issue Price for such series of Preferred Stock. The Conversion
Price for each series of Preferred Stock shall be subject to adjustment from
time to time as provided below.
6.4 ADJUSTMENT UPON COMMON STOCK EVENT. Upon the happening of a
----------------------------------
Common Stock Event (as hereinafter defined), the Conversion Price of the Series
A Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock
and the Series D Preferred Stock shall, simultaneously with the happening of
such Common Stock Event, be adjusted by multiplying the Conversion Price of each
such series of Preferred Stock in effect immediately prior to such Common Stock
Event by a fraction, (i) the numerator of which shall be the number of shares of
Common Stock issued and outstanding immediately prior to such Common Stock
Event, and (ii) the denominator of which shall be the number of shares of Common
Stock issued and outstanding immediately after such Common Stock Event, and the
product so obtained shall thereafter be the Conversion Price for such series of
Preferred Stock. The Conversion Price for a series of Preferred Stock shall be
readjusted in the same manner upon the happening of each subsequent Common Stock
Event. As used herein, the term "Common Stock Event"
------------------
shall mean (i) the issue by the corporation of additional shares of Common Stock
as a dividend or other distribution, without consideration, on outstanding
Common Stock, (ii) a subdivision of the outstanding shares of Common Stock into
a greater number of shares of Common Stock, or (iii) a combination of the
outstanding shares of Common Stock into a smaller number of shares of Common
Stock. This Section 6.4 shall not apply to dividends or distributions also made
with respect to the Preferred Stock pursuant to Section 2.1 hereof.
6.5 ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. If at
--------------------------------------------------
any time or from time to time after the Original Issue Date the corporation pays
a dividend or makes another distribution, without consideration, to the holders
of the Common Stock payable in securities of the corporation other than shares
of Common Stock, then in each such event, provision shall be made so that the
holders of the Preferred Stock shall receive upon conversion thereof, in
addition to the number of shares of Common Stock receivable upon conversion
thereof, the amount of securities of the corporation which they would have
received had their Preferred Stock been converted into Common Stock on the date
of such event (or such record date, as applicable) and had they thereafter,
during the period from the date of such event (or such record date, as
applicable) to and including the conversion date, retained such securities
receivable by them as aforesaid during such period, subject to all other
adjustments called for during such period under this Section 6 with respect to
the rights of the holders of the Preferred Stock or with respect to such other
securities by their terms. This Section 6.5 shall not apply to dividends or
distributions also made with respect to the Preferred Stock pursuant to Section
2.1 hereof.
6.6 ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND SUBSTITUTION.
----------------------------------------------------------
If at any time or from time to time after the Original Issue Date the Common
Stock issuable upon the conversion of the Preferred Stock is changed into the
same or a different number of shares of any class or classes of stock, whether
by recapitalization, reclassification or otherwise (other than by a Common Stock
----- ----
Event or a dividend or distribution provided for elsewhere in this Section 6),
-10-
<PAGE>
then in any such event each holder of Preferred Stock shall have the right
thereafter to convert such stock into the kind and amount of stock and other
securities and property receivable upon such recapitalization, reclassification
or other change by holders of the number of shares of Common Stock into which
such shares of Preferred Stock could have been converted immediately prior to
such recapitalization, reclassification or change, all subject to further
adjustment as provided herein or with respect to such other securities or
property by the terms thereof.
6.7 SALE OF SHARES BELOW CONVERSION PRICE.
-------------------------------------
(a) Adjustment Formula. If at any time or from time to
------------------
time after the Original Issue Date the corporation issues or sells, or is deemed
by the provisions of this subsection 6.7 to have issued or sold, Additional
Shares of Common Stock (as hereinafter defined), otherwise than in connection
with a Common Stock Event as provided in subsection 6.4, a dividend or
distribution as provided in subsection 6.5 or a recapitalization,
reclassification or other change as provided in subsection 6.6, for no
consideration or for an Effective Price (as hereinafter defined) that is less
than the Conversion Price for a series of Preferred Stock in effect immediately
prior to such issue or sale, then, and in each such case, the Conversion Price
for such series of Preferred Stock shall be reduced, as of the close of business
on the date of such issue or sale, to the price obtained by multiplying such
Conversion Price by a fraction:
(i) the numerator of which shall be the sum of (A)
the number of Common Stock Equivalents Outstanding (as hereinafter defined)
immediately prior to such issue or sale of Additional Shares of Common Stock,
plus (B) the quotient obtained by dividing the Aggregate Consideration Received
(as hereinafter defined) by the corporation for the total number of Additional
Shares of Common Stock so issued or sold (or deemed so issued and sold) by the
Conversion Price for such series of Preferred Stock in effect immediately prior
to such issue or sale; and
(ii) the denominator of which shall be the sum of (A)
the number of Common Stock Equivalents Outstanding immediately prior to such
issue or sale plus (B) the number of Additional Shares of Common Stock so issued
or sold (or deemed so issued and sold).
(b) Certain Definitions. For the purpose of making any
-------------------
adjustment required under this subsection 6.7:
(i) "Additional Shares of Common Stock" shall mean
---------------------------------
all shares of Common Stock issued by the corporation, whether or not
subsequently reacquired or retired by the corporation, other than: (A) shares of
Common Stock issued or issuable upon conversion of Preferred Stock; and (B)
shares of Common Stock (or options, warrants or rights therefor) issued to
employees, officers or directors of, or contractors, consultants or advisers to,
the corporation or any Subsidiary pursuant to stock purchase or stock option
plans, stock bonuses or awards, warrants, contracts or other arrangements that
are approved by the Board.
-11-
<PAGE>
(ii) The "Aggregate Consideration Received" by the
--------------------------------
corporation for any issue or sale (or deemed issue or sale) of securities shall
(A) to the extent it consists of cash, be computed at the gross amount of cash
received by the corporation before deduction of any underwriting or similar
commissions, compensation or concessions paid or allowed by the corporation in
connection with such issue or sale and without deduction of any expenses payable
by the corporation; (B) to the extent it consists of property other than cash,
be computed at the fair value of that property as determined in good faith by
the Board; and (C) if Additional Shares of Common Stock, Convertible Securities
or Rights or Options to purchase either Additional Shares of Common Stock or
Convertible Securities are issued or sold together with other stock or
securities or other assets of the corporation for a consideration which covers
both, be computed as the portion of the consideration so received that may be
reasonably determined in good faith by the Board to be allocable to such
Additional Shares of Common Stock, Convertible Securities or Rights or Options.
(iii) "Common Stock Equivalents Outstanding" shall mean
------------------------------------
the number of shares of Common Stock that is equal to the sum of (A) all shares
of Common Stock of the corporation that are outstanding at the time in question,
plus (B) all shares of Common Stock of the corporation issuable upon conversion
of all shares of Preferred Stock or other Convertible Securities that are
outstanding at the time in question, plus (C) all shares of Common Stock of the
corporation that are issuable upon the exercise of Rights or Options for
Convertible Securities that are outstanding at the time in question and the
conversion or exchange of such Convertible Securities into or for Common Stock.
(iv) "Convertible Securities" shall mean stock or
----------------------
other securities convertible into or exchangeable for shares of Common Stock.
(v) The "Effective Price" of Additional Shares of
---------------
Common Stock shall mean the quotient determined by dividing the total number of
Additional Shares of Common Stock issued or sold, or deemed to have been issued
or sold, by the corporation under this subsection 6.7, into the Aggregate
Consideration Received, or deemed to have been received, by the corporation
under this subsection 6.7, for the issue of such Additional Shares of Common
Stock; and
(vi) "Rights or Options" shall mean warrants, options
-----------------
or other rights to purchase or acquire shares of Common Stock or Convertible
Securities.
(c) Deemed Issuances. For the purpose of making any
----------------
adjustment to the Conversion Price of any series of Preferred Stock as required
under this subsection 6.7, if the corporation issues or sells any Rights or
Options or Convertible Securities and if the Effective Price of the shares of
Common Stock issuable upon exercise of such Rights or Options and/or the
conversion or exchange of Convertible Securities (computed without reference to
any additional or similar protective or antidilution clauses) is less than the
Conversion Price then in effect for a series of Preferred Stock, then the
corporation shall be deemed to have issued, at the time of the issuance of such
Rights, Options or Convertible Securities, that number of Additional Shares of
Common Stock that is equal to the maximum
-12-
<PAGE>
number of shares of Common Stock issuable upon exercise or conversion of such
Rights, Options or Convertible Securities upon their issuance and to have
received, as the Aggregate Consideration Received for the issuance of such
shares, an amount equal to the total amount of the consideration, if any,
received by the corporation for the issuance of such Rights or Options or
Convertible Securities, plus, in the case of such Rights or Options, the minimum
amounts of consideration, if any, payable to the corporation upon the exercise
in full of such Rights or Options, plus, in the case of Convertible Securities,
the minimum amounts of consideration, if any, payable to the corporation (other
than by cancellation of liabilities or obligations evidenced by such Convertible
Securities) upon the conversion or exchange thereof; provided that:
-------- ----
(i) if the minimum amounts of such consideration
cannot be ascertained, but are a function of antidilution or similar protective
clauses, then the corporation shall be deemed to have received the minimum
amounts of consideration without reference to such clauses;
(ii) if the minimum amount of consideration payable to
the corporation upon the exercise of Rights or Options or the conversion or
exchange of Convertible Securities is reduced over time or upon the occurrence
or non-occurrence of specified events other than by reason of antidilution or
similar protective adjustments, then the Effective Price shall be recalculated
using the figure to which such minimum amount of consideration is reduced; and
(iii) if the minimum amount of consideration payable to
the corporation upon the exercise of such Rights or Options or the conversion or
exchange of Convertible Securities is subsequently increased, then the Effective
Price shall be recalculated using the increased minimum amount of consideration
payable to the corporation upon the exercise of such Rights or Options or the
conversion or exchange of such Convertible Securities.
No further adjustment of the Conversion Price, adjusted upon the issuance of
such Rights or Options or Convertible Securities, shall be made as a result of
the actual issuance of shares of Common Stock on the exercise of any such Rights
or Options or the conversion or exchange of any such Convertible Securities. If
any such Rights or Options or the conversion rights represented by any such
Convertible Securities shall expire without having been fully exercised, then
the Conversion Price as adjusted upon the issuance of such Rights or Options or
Convertible Securities shall be readjusted to the Conversion Price which would
have been in effect had an adjustment been made on the basis that the only
shares of Common Stock so issued were the shares of Common Stock, if any, that
there actually issued or sold on the exercise of such Rights or Options or
rights of conversion or exchange of such Convertible Securities, and such shares
of Common Stock, if any, were issued or sold for the consideration actually
received by the corporation upon such exercise, plus the consideration, if any,
actually received by the corporation for the granting of all such Rights or
Options, whether or not exercised, plus the consideration received for issuing
or selling all such Convertible Securities actually converted or exchanged, plus
the consideration, if any, actually received by the corporation (other than by
cancellation of liabilities or obligations evidenced by such Convertible
Securities) on the conversion or exchange of such Convertible Securities,
provided that such readjustment shall not apply to prior conversions of
Preferred Stock.
-13-
<PAGE>
6.8 CERTIFICATE OF ADJUSTMENT. In each case of an adjustment or
-------------------------
readjustment of the Conversion Price for a series of Preferred Stock, the
corporation, at its expense, shall cause its Chief Financial Officer to compute
such adjustment or readjustment in accordance with the provisions hereof and
prepare a certificate showing such adjustment or readjustment and the
calculations thereof, and shall mail such certificate, by first class mail,
postage prepaid, to each registered holder of the Preferred Stock at the
holder's address as shown in the corporation's books.
6.9 FRACTIONAL SHARES. No fractional shares of Common Stock
-----------------
shall be issued upon any conversion of Preferred Stock. In lieu of any
fractional share to which the holder would otherwise be entitled, the
corporation shall pay the holder cash equal to the product of such fraction
multiplied by the Common Stock's fair market value as determined in good faith
by the Board as of the date of conversion.
6.10 RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
---------------------------------------------
corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Preferred Stock, such number of its shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of the Preferred Stock; and if at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient to
effect the conversion of all then outstanding shares of the Preferred Stock, the
corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.
6.11 NOTICES. Any notice required by the provisions of this
-------
Section 6 to be given to the holders of shares of the Preferred Stock shall be
deemed given upon the earlier of (i) actual receipt, (ii) for United States
addresses, deposit in the United States mail, by certified or registered mail,
return receipt requested, postage prepaid, or (iii) deposit with a nationally or
internationally (as applicable) recognized express courier, fees prepaid, in
each case addressed to each holder of record at the address of such holder
appearing on the books of the corporation.
6.12 NO IMPAIRMENT. The corporation shall not avoid or seek to
-------------
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the corporation, but shall at all times in good faith
assist in carrying out all such action as may be reasonably necessary or
appropriate in order to protect the conversion rights of the holders of the
Preferred Stock against impairment.
7. RESTRICTIONS AND LIMITATIONS.
----------------------------
7.1 CLASS PROTECTIVE PROVISIONS - STOCK MATTERS. The approval,
-------------------------------------------
by vote or written consent, of the holders of a majority of the outstanding
shares of Preferred Stock voting together on an as-converted-into-Common Stock
basis will be required for the corporation to:
-14-
<PAGE>
(a) increase the total number of authorized shares of
Preferred Stock;
(b) reclassify any outstanding shares or securities of the
corporation into shares having rights, preferences or privileges senior to the
Preferred Stock; or
(c) authorize any other stock having rights or preferences
senior to, or pari passu with, the Preferred Stock.
In addition to the foregoing, the approval, by vote or written consent, of the
holders of at least sixty percent (60%) of the outstanding shares of Preferred
Stock, voting together on an as-converted-into-Common Stock basis, will be
required for the corporation to alter or change any of the rights, preferences,
privileges or restrictions of the Preferred Stock.
7.2 CLASS PROTECTIVE PROVISIONS - TRANSACTIONS. So long as any
------------------------------------------
shares of Preferred Stock remain outstanding, the corporation shall not, without
the approval, by vote or written consent, of the holders of sixty percent (60%)
of the Preferred Stock then outstanding, voting as a single class on an as-
converted-into-Common Stock basis, consummate any of the following transactions
unless the aggregate fair value of the consideration received by all the
corporation's stockholders in such transaction equals or exceeds the product of
$7.50 times the number of Common Stock Equivalents (as defined in subsection
6.7(b)(iii)) outstanding immediately prior to the closing of such transaction:
(a) merger or consolidation with or into any entity if such
merger or consolidation would result in the stockholders of the corporation
immediately prior to such merger or consolidation holding less than a majority
of the voting power of the surviving entity immediately after such merger or
consolidation;
(b) sale of all or substantially all the corporation's
assets in a single transaction or series of related transactions; or
(c) liquidation or dissolution of the corporation.
8. MISCELLANEOUS
-------------
8.1 NO REISSUANCE OF PREFERRED STOCK. No share or shares of
--------------------------------
Preferred Stock acquired by the corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued, and all such shares shall be
canceled, retired and eliminated from the shares which the corporation shall be
authorized to issue.
ARTICLE VI
The Board of Directors of the corporation shall have the power to
adopt, amend or repeal Bylaws of the corporation.
-15-
<PAGE>
ARTICLE VII
Election of directors need not be by written ballot unless a
stockholder demands election by written ballot at the meeting and before voting
begins, or unless the Bylaws of the corporation shall so provide.
ARTICLE VIII
A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law or (iv) for any transaction from which the director derived an improper
personal benefit.
If the Delaware General Corporation Law is hereafter amended to
authorize the further elimination or limitation of the liability of a director,
then the liability of a director of the corporation shall be eliminated or
limited to the fullest extent permitted by the Delaware General Corporation Law,
as so amended.
Neither any amendment nor repeal of this Article VIII, nor the
adoption of any provision of this Certificate of Incorporation inconsistent with
this Article VIII, shall eliminate, reduce or otherwise adversely affect any
limitation on the personal liability of a director of the corporation existing
at the time of such amendment, repeal or adoption of an inconsistent provision.
ARTICLE IX
Effective immediately after the closing of an underwritten public
offering of shares of the corporation's Common Stock actions shall be taken by
the corporation's stockholders only at annual or special meetings of
stockholders, and the corporation's stockholders shall not be able to act by
written consent.
-16-
<PAGE>
EXHIBIT 3.03
_______________________________
BYLAWS
OF
CENTAUR PHARMACEUTICALS, INC.
(a Delaware corporation)
As Adopted June 10, 1998
As Amended August 7, 1998
_______________________________
<PAGE>
BYLAWS
OF
CENTAUR PHARMACEUTICALS, INC.
(a Delaware corporation)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I - STOCKHOLDERS................................................. 1
Section 1.1: Annual Meetings.................................... 1
Section 1.2: Special Meetings................................... 1
Section 1.3: Notice of Meetings................................. 1
Section 1.4: Adjournments....................................... 1
Section 1.5: Quorum............................................. 2
Section 1.6: Organization....................................... 2
Section 1.7: Voting; Proxies.................................... 2
Section 1.8: Fixing Date for Determination of Stockholders
of Record.......................................... 3
Section 1.9: List of Stockholders Entitled to Vote.............. 4
Section 1.10: Action by Written Consent of Stockholders.......... 4
Section 1.11: Inspectors of Elections............................ 5
Section 1.12: Notice of Stockholder Business; Nominations........ 6
ARTICLE II - BOARD OF DIRECTORS.......................................... 8
Section 2.1: Number; Qualifications............................. 8
Section 2.2: Election; Resignation; Removal; Vacancies.......... 8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 2.3: Regular Meetings................................... 8
Section 2.4: Special Meetings................................... 9
Section 2.5: Telephonic Meetings Permitted...................... 9
Section 2.6: Quorum; Vote Required for Action................... 9
Section 2.7: Organization....................................... 9
Section 2.8: Written Action by Directors........................ 9
Section 2.9: Powers............................................. 9
Section 2.10: Compensation of Directors.......................... 9
ARTICLE III - COMMITTEES................................................. 10
Section 3.1: Committees......................................... 10
Section 3.2: Committee Rules.................................... 10
ARTICLE IV - OFFICERS.................................................... 11
Section 4.1: Generally.......................................... 11
Section 4.2: Chief Executive Officer............................ 11
Section 4.3: Chairman of the Board.............................. 12
Section 4.4: President.......................................... 12
Section 4.5: Vice President..................................... 12
Section 4.6: Chief Financial Officer............................ 12
Section 4.7: Treasurer.......................................... 12
Section 4.8: Secretary.......................................... 12
Section 4.9: Delegation of Authority............................ 12
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 4.10: Removal............................................ 13
ARTICLE V - STOCK........................................................ 13
Section 5.1: Certificates....................................... 13
Section 5.2: Lost, Stolen or Destroyed Stock Certificates;
Issuance of New Certificates....................... 13
Section 5.3: Other Regulations.................................. 13
ARTICLE VI - INDEMNIFICATION............................................. 13
Section 6.1: Indemnification of Officers and Directors.......... 13
Section 6.2: Advance of Expenses................................ 14
Section 6.3: Non-Exclusivity of Rights.......................... 14
Section 6.4: Indemnification Contracts.......................... 14
Section 6.5: Effect of Amendment................................ 14
ARTICLE VII - NOTICES.................................................... 15
Section 7.1: Notice............................................. 15
Section 7.2: Waiver of Notice................................... 15
ARTICLE VIII - INTERESTED DIRECTORS...................................... 15
Section 8.1: Interested Directors; Quorum....................... 15
ARTICLE IX - MISCELLANEOUS............................................... 16
Section 9.1: Fiscal Year........................................ 16
Section 9.2: Seal............................................... 16
Section 9.3: Form of Records.................................... 16
Section 9.4: Reliance Upon Books and Records.................... 16
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 9.5: Certificate of Incorporation Governs............... 16
Section 9.6: Severability....................................... 16
ARTICLE X - AMENDMENT.................................................... 17
Section 10.1: Amendments......................................... 17
</TABLE>
<PAGE>
BYLAWS
OF
CENTAUR PHARMACEUTICALS, INC.
(a Delaware corporation)
As Adopted June 10, 1998
As Amended August 7, 1998
ARTICLE I
STOCKHOLDERS
Section 1.1: Annual Meetings. An annual meeting of stockholders shall be
----------- ---------------
held for the election of directors at such date, time and place, either within
or without the State of Delaware, as the Board of Directors shall each year fix.
Any other proper business may be transacted at the annual meeting.
Section 1.2: Special Meetings. Special meetings of stockholders for any
----------- ----------------
purpose or purposes may be called at any time by the Chairman of the Board, the
Chief Executive Officer, the President, by a majority of the members of the
Board of Directors, or by the holders of shares of the Corporation that are
entitled to cast not less than a majority of the total number of votes entitled
to be cast by all stockholders at such meeting. Special meetings may not be
called by any other person or persons. If a special meeting of stockholders is
called by any person or persons other than by a majority of the members of the
----- ----
Board of Directors, then such person or persons shall call such meeting
by delivering a written request to call such meeting to each member of the Board
of Directors, and the Board of Directors shall then determine the time, date and
place of such special meeting, which shall be held not more than one hundred
twenty (120) nor less than thirty-five (35) days after the written request to
call such special meeting was delivered to each member of the Board of
Directors.
Section 1.3: Notice of Meetings. Written notice of all meetings of
----------- ------------------
stockholders shall be given stating the place, date and time of the meeting and,
in the case of a special meeting, the purpose or purposes for which the meeting
is called. Unless otherwise required by applicable law or the Certificate of
Incorporation of the Corporation, such notice shall be given not less than ten
(10) nor more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting.
Section 1.4: Adjournments. Any meeting of stockholders may adjourn from
----------- ------------
time to time to reconvene at the same or another place, and notice need not be
given of any such adjourned meeting if the time, date and place thereof are
announced at the meeting at which the adjournment is taken; provided, however,
-------- -------
that if the adjournment is for more than thirty (30) days, or if after the
adjournment, a new record date is fixed for the adjourned meeting, then a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at
<PAGE>
the meeting. At the adjourned meeting, the Corporation may transact any
business that might have been transacted at the original meeting.
Section 1.5: Quorum. At each meeting of stockholders, the holders of
----------- ------
thirty-five percent (35%) of the shares of stock entitled to vote at the
meeting, present in person or represented by proxy, shall constitute a quorum
for the transaction of business, except if otherwise required by applicable law.
------
If a quorum shall fail to attend any meeting, the chairman of the meeting
or the holders of a majority of the shares entitled to vote who are present, in
person or by proxy, at the meeting may adjourn the meeting. Shares of the
Corporation's stock belonging to the Corporation (or to another corporation, if
a majority of the shares entitled to vote in the election of directors of such
other corporation are held, directly or indirectly, by the Corporation), shall
neither be entitled to vote nor be counted for quorum purposes; provided,
--------
however, that the foregoing shall not limit the right of the
- -------
Corporation or any other corporation to vote any shares of the Corporation's
stock held by it in a fiduciary capacity.
Section 1.6: Organization. Meetings of stockholders shall be presided over
----------- ------------
by such person as the Board of Directors may designate, or, in the absence of
such a person, the Chairman of the Board, or, in the absence of such person, the
President of the Corporation, or, in the absence of such person, such person as
may be chosen by the holders of a majority of the shares entitled to vote who
are present, in person or by proxy, at the meeting. Such person shall be
chairman of the meeting and, subject to Section 1.11 hereof, shall determine the
order of business and the procedure at the meeting, including such regulation of
the manner of voting and the conduct of discussion as seems to him or her to be
in order. The Secretary of the Corporation shall act as secretary of the
meeting, but in his or her absence, the chairman of the meeting may appoint any
person to act as secretary of the meeting.
Section 1.7: Voting; Proxies. Unless otherwise provided by law or the
----------- ---------------
Certificate of Incorporation, and subject to the provisions of Section 1.8 of
these Bylaws, each stockholder shall be entitled to one (1) vote for each share
of stock held by such stockholder. Each stockholder entitled to vote at a
meeting of stockholders, or to express consent or dissent to corporate action in
writing without a meeting, may authorize another person or persons to act for
such stockholder by proxy. Such a proxy may be prepared, transmitted and
delivered in any manner permitted by applicable law. Voting at meetings of
stockholders need not be by written ballot unless such is demanded at the
meeting before voting begins by a stockholder or stockholders holding shares
representing at least one percent (1%) of the votes entitled to vote at such
meeting, or by such stockholder's or stockholders' proxy; provided, however,
-------- -------
that an election of directors shall be by written ballot if demand is so made by
any stockholder at the meeting before voting begins. If a vote is to be taken
by written ballot, then each such ballot shall state the name of the stockholder
or proxy voting and such other information as the chairman of the meeting deems
appropriate. Directors shall be elected by a plurality of the votes of the
shares present in person or represented by proxy at the meeting and entitled to
vote on the election of directors. Unless otherwise provided by applicable law,
the Certificate of Incorporation or these Bylaws, every matter other than the
election of directors shall be decided by the affirmative vote of the holders of
a majority of the shares of stock entitled to vote thereon
-2-
<PAGE>
that are present in person or represented by proxy at the meeting and are voted
for or against the matter.
Section 1.8: Fixing Date for Determination of Stockholders of Record.
----------- -------------------------------------------------------
(a) Generally. In order that the Corporation may determine the stockholders
---------
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not precede the date upon which the resolution fixing the record
date is adopted by the Board of Directors and which shall not be more than sixty
(60) nor less than ten (10) days before the date of such meeting, nor more than
sixty (60) days prior to any other action. If no record date is fixed by the
Board of Directors, then the record date shall be as provided by applicable law.
A determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
--------
however, that the Board of Directors may fix a new record date for the adjourned
- -------
meeting.
(b) Stockholder Request for Action by Written Consent. For such period of
-------------------------------------------------
time as stockholders are authorized to act by written consent pursuant to the
provisions of the Certificate of Incorporation and Section 1.10 hereof, any
stockholder of record seeking to have the stockholders authorize or take
corporate action by written consent without a meeting shall, by written notice
to the Secretary of the Corporation, request the Board of Directors to fix a
record date for such consent. Such request shall include a brief description of
the action proposed to be taken. The Board of Directors shall, within ten (10)
days after the date on which such a request is received, adopt a resolution
fixing the record date. Such record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board of Directors, and
shall not be more than ten (10) days after the date upon which the resolution
fixing the record date is adopted by the Board of Directors. If no record date
has been fixed by the Board of Directors within ten (10) days after the date on
which such a request is received, then the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is required by
applicable law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation by delivery to its registered office in the State of Delaware, to
its principal place of business or to any officer or agent of the Corporation
having custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the Corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board of Directors and prior action by the Board of
Directors is required by applicable law, then the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the date on which the Board of
Directors adopts the resolution taking such prior action.
-3-
<PAGE>
Section 1.9: List of Stockholders Entitled to Vote. A complete list of
----------- -------------------------------------
stockholders entitled to vote at any meeting of stockholders, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in the name of each stockholder, shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder who is present at the meeting.
Section 1.10: Action by Written Consent of Stockholders.
------------ -----------------------------------------
(a) Procedure. Unless otherwise provided by the Certificate of
---------
Incorporation, and except as set forth in Section 1.8(b) above, any action
required or permitted to be taken at any annual or special meeting of the
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted;
provided, however, that effective immediately after the closing of a firm
- -------- -------
commitment underwritten public offering of shares of the Corporation's Common
Stock, any action required or permitted to be taken by the Corporation's
stockholders shall be taken only at a duly called annual or special meeting of
such stockholders, and the Corporation's stockholders shall not be able to act
by written consent. For such period of time as written stockholder consents are
permitted, such consents shall bear the date of signature of each stockholder
who signs the consent and shall be delivered to the Corporation by delivery to
its registered office in the State of Delaware, to its principal place of
business or to any officer or agent of the Corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Delivery
made to the Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. No written consent shall be
effective to take the action set forth therein unless, within sixty (60) days of
the earliest dated consent delivered to the Corporation in the manner provided
above, written consents signed by a sufficient number of stockholders to take
the action set forth therein are delivered to the Corporation in the manner
provided above.
(b) Notice of Consent. Prompt notice of the taking of corporate action by
-----------------
stockholders without a meeting by less than unanimous written consent of the
stockholders shall be given to those stockholders who have not consented thereto
in writing, and, in the case of a Certificate Action (as defined below), if the
Delaware General Corporation Law so requires, such notice shall be given prior
to filing of the certificate in question. If the action which is consented to
requires the filing of a certificate under the Delaware General Corporation Law
(a "Certificate Action"), then if the Delaware General Corporation Law so
------------------
requires, the certificate so filed shall state that written stockholder consent
has been given in accordance with Section 228 of the Delaware General
Corporation Law and that written notice of the taking of corporate action by
stockholders without a meeting as described herein has been given as provided in
such section.
-4-
<PAGE>
Section 1.11: Inspectors of Elections.
------------ -----------------------
(a) Applicability. Unless otherwise provided in the Corporation's
-------------
Certificate of Incorporation or required by the Delaware General Corporation
Law, the following provisions of this Section 1.11 shall apply only if and when
the Corporation has a class of voting stock that is: (i) listed on a national
securities exchange; (ii) authorized for quotation on an interdealer quotation
system of a registered national securities association; or (iii) held of record
by more than 2,000 stockholders; in all other cases, observance of the
provisions of this Section 1.11 shall be optional and at the discretion of the
Corporation.
(b) Appointment. The Corporation shall, in advance of any meeting of
-----------
stockholders, appoint one or more inspectors of election to act at the meeting
and make a written report thereof. The Corporation may designate one or more
persons as alternate inspectors to replace any inspector who fails to act. If
no inspector or alternate is able to act at a meeting of stockholders, the
person presiding at the meeting shall appoint one or more inspectors to act at
the meeting.
(c) Inspector's Oath. Each inspector of election, before entering upon the
----------------
discharge of his duties, shall take and sign an oath faithfully to execute the
duties of inspector with strict impartiality and according to the best of his or
her ability.
(d) Duties of Inspectors. At a meeting of stockholders, the inspectors of
--------------------
election shall (i) ascertain the number of shares outstanding and the voting
power of each share, (ii) determine the shares represented at a meeting and the
validity of proxies and ballots, (iii) count all votes and ballots, (iv)
determine and retain for a reasonable period of time a record of the disposition
of any challenges made to any determination by the inspectors and (v) certify
their determination of the number of shares represented at the meeting and their
count of all votes and ballots. The inspectors may appoint or retain other
persons or entities to assist the inspectors in the performance of the duties of
the inspectors.
(e) Opening and Closing of Polls. The date and time of the opening and the
----------------------------
closing of the polls for each matter upon which the stockholders will vote at a
meeting shall be announced by the inspectors at the meeting. No ballot, proxies
or votes, nor any revocations thereof or changes thereto, shall be accepted by
the inspectors after the closing of the polls unless the Court of Chancery upon
application by a stockholder shall determine otherwise.
(f) Determinations. In determining the validity and counting of proxies and
ballots, the inspectors shall be limited to an examination of the proxies, any
envelopes submitted with those proxies, any information provided in connection
with proxies in accordance with Section 212(c)(2) of the Delaware General
Corporation Law, the ballots and the regular books and records of the
Corporation, except that the inspectors may consider other reliable information
------
for the limited purpose of reconciling proxies and ballots submitted by or on
behalf of banks, brokers, their nominees or similar persons that represent more
votes than the holder of a proxy is authorized by the record owner to cast or
more votes than the stockholder holds of record. If the
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<PAGE>
inspectors consider other reliable information for the limited purpose permitted
herein, the inspectors at the time they make their certification of their
determinations pursuant to this Section 1.11 shall specify the precise
information considered by them, including the person or persons from whom they
obtained the information, when the information was obtained, the means by which
the information was obtained and the basis for the inspectors' belief that such
information is accurate and reliable.
Section 1.12: Notice of Stockholder Business; Nominations.
------------ -------------------------------------------
(a) Annual Meeting of Stockholders.
------------------------------
(i) Nominations of persons for election to the Board of Directors and
the proposal of business to be considered by the stockholders shall be made at
an annual meeting of stockholders (A) pursuant to the Corporation's notice of
such meeting, (B) by or at the direction of the Board of Directors or (C) by any
stockholder of the Corporation who was a stockholder of record at the time of
giving of the notice provided for in this Section 1.12, who is entitled to vote
at such meeting and who complies with the notice procedures set forth in this
Section 1.12.
(ii) For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (C) of subparagraph (a)(i)
of this Section 1.12, the stockholder must have given timely notice thereof in
writing to the Secretary of the Corporation and such other business must
otherwise be a proper matter for stockholder action. To be timely, a
stockholder's notice must be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of business on the
sixtieth (60th) day nor earlier than the close of business on the ninetieth
(90th) day prior to the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the annual
-------- -------
meeting is more than thirty (30) days before or more than sixty (60) days after
such anniversary date, notice by the stockholder, to be timely, must be so
delivered not earlier than the close of business on the ninetieth (90th) day
prior to such annual meeting and not later than the close of business on the
later of the sixtieth (60th) day prior to such annual meeting or the close of
business on the tenth (10th) day following the day on which public announcement
of the date of such meeting is first made by the Corporation. Such
stockholder's notice shall set forth: (a) as to each person whom the stockholder
proposes to nominate for election or reelection as a director all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), including such person's written consent to being named in
------------
the proxy statement as a nominee and to serving as a director if elected; (b) as
to any other business that the stockholder proposes to bring before the meeting,
a brief description of the business desired to be brought before the meeting,
the reasons for conducting such business at the meeting and any material
interest in such business of such stockholder and the beneficial owner, if any,
on whose behalf the proposal is made; and (c) as to the stockholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination or
proposal is made, (1) the name and address of such stockholder, as they appear
on the Corporation's books, and of such beneficial owner and (2) the class and
number of shares of
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the Corporation that are owned beneficially and held of record by such
stockholder and such beneficial owner.
(iii) Notwithstanding anything in the second sentence of subparagraph
(a)(ii) of this Section 1.12 to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the Corporation is
increased and there is no public announcement by the Corporation naming all of
the nominees for director or specifying the size of the increased board of
directors at least seventy (70) days prior to the first anniversary of the
preceding year's annual meeting (or, if the annual meeting is held more than
thirty (30) days before or sixty (60) days after such anniversary date, at least
seventy (70) days prior to such annual meeting), a stockholder's notice required
by this Section 1.12 shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it shall be
delivered to the Secretary of the Corporation at the principal executive office
of the Corporation not later than the close of business on the tenth (10th) day
following the day on which such public announcement is first made by the
Corporation.
(b) Special Meetings of Stockholders. Only such business shall be
--------------------------------
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of such meeting. Nominations
of persons for election to the Board of Directors may be made at a special
meeting of stockholders at which directors are to be elected pursuant to the
Corporation's notice of such meeting (i) by or at the direction of the Board of
Directors or (ii) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice of
the special meeting, who shall be entitled to vote at the meeting and who
complies with the notice procedures set forth in this Section 1.12. In the
event the Corporation calls a special meeting of stockholders for the purpose of
electing one or more directors to the Board of Directors, any such stockholder
may nominate a person or persons (as the case may be), for election to such
position(s) as specified in the Corporation's notice of meeting, if the
stockholder's notice required by subparagraph (a)(ii) of this Section 1.12 shall
be delivered to the Secretary of the Corporation at the principal executive
offices of the Corporation not earlier than the ninetieth (90th) day prior to
such special meeting and not later than the close of business on the later of
the sixtieth (60th) day prior to such special meeting or the tenth (10th) day
following the day on which public announcement is first made of the date of the
special meeting and of the nominees proposed by the Board of Directors to be
elected at such meeting.
(c) General.
-------
(i) Only such persons who are nominated in accordance with the
procedures set forth in this Section 1.12 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of stockholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Section 1.12. Except as otherwise provided by law or these
Bylaws, the chairman of the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought before the meeting
was made or proposed, as the case may be, in accordance with the procedures set
forth in this Section 1.12
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and, if any proposed nomination or business is not in compliance herewith, to
declare that such defective proposal or nomination shall be disregarded.
(ii) For purposes of this Section 1.12, the term "public
------
announcement" shall mean disclosure in a press release reported by the Dow Jones
- ------------
News Service, Associated Press or comparable news service or in a document
publicly filed by the Corporation with the Securities and Exchange Commission
pursuant to Sections 13, 14 or 15(d) of the Exchange Act.
(iii) Notwithstanding the foregoing provisions of this Section 1.12,
at any time that the Corporation is registered under the Exchange Act, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth herein. Nothing in this Section 1.12 shall be deemed to affect any rights
of stockholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act at such time as the
Corporation is subject to the Exchange Act.
ARTICLE II
BOARD OF DIRECTORS
Section 2.1: Number; Qualifications. The Board of Directors shall
----------- ----------------------
consist of one or more members. The number of directors as of the date of
adoption of these Bylaws shall be seven (7), and thereafter shall be fixed
from time to time by resolution of the Board of Directors. No decrease in the
authorized number of directors constituting the Board of Directors shall shorten
the term of any incumbent director. Directors need not be stockholders of the
Corporation.
Section 2.2: Election; Resignation; Removal; Vacancies. Each director shall
----------- -----------------------------------------
hold office until the next annual meeting of stockholders and until his or her
successor is elected and qualified, or until his or her earlier death,
resignation or removal. Any director may resign at any time upon written notice
to the Corporation. Subject to the rights of any holders of Preferred Stock then
outstanding: (i) any director or the entire Board of Directors may be removed,
with or without cause, by the holders of a majority of the shares then entitled
to vote at an election of directors; and (ii) any vacancy occurring in the Board
of Directors for any cause, and any newly created directorship resulting from
any increase in the authorized number of directors to be elected by all
stockholders having the right to vote as a single class, may be filled by the
stockholders, by a majority of the directors then in office, although less than
a quorum, or by a sole remaining director.
Section 2.3: Regular Meetings. Regular meetings of the Board of Directors
----------- ----------------
may be held at such places, within or without the State of Delaware, and at such
times as the Board of Directors may from time to time determine. Notice of
regular meetings need not be given if the date, times and places thereof are
fixed by resolution of the Board of Directors.
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Section 2.4: Special Meetings. Special meetings of the Board of Directors
----------- ----------------
may be called by the Chairman of the Board, the President or a majority of the
members of the Board of Directors then in office and may be held at any time,
date or place, within or without the State of Delaware, as the person or persons
calling the meeting shall fix. Notice of the time, date and place of such
meeting shall be given, orally or in writing, by the person or persons calling
the meeting to all directors at least four (4) days before the meeting if the
notice is mailed, or at least twenty-four (24) hours before the meeting if such
notice is given by telephone, hand-delivery, telegram, telex, mailgram,
facsimile or similar communication method. Unless otherwise indicated in the
notice, any and all business may be transacted at a special meeting.
Section 2.5: Telephonic Meetings Permitted. Members of the Board of
----------- -----------------------------
Directors, or any committee of the Board, may participate in a meeting of the
Board or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to
conference telephone or similar communications equipment shall constitute
presence in person at such meeting.
Section 2.6: Quorum; Vote Required for Action. At all meetings of the
----------- --------------------------------
Board of Directors a majority of the total number of authorized directors shall
constitute a quorum for the transaction of business. Except as otherwise
provided herein or in the Certificate of Incorporation, or required by law, the
vote of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 2.7: Organization. Meetings of the Board of Directors shall be
----------- ------------
presided over by the Chairman of the Board, or in his or her absence by the
President, or in his or her absence by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his or her absence, the
chairman of the meeting may appoint any person to act as secretary of the
meeting.
Section 2.8: Written Action by Directors. Any action required or
----------- ---------------------------
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board or
such committee, as the case may be, consent thereto in writing and the writing
or writings are filed with the minutes of proceedings of the Board or committee,
respectively.
Section 2.9: Powers. The Board of Directors may, except as otherwise
------------ ------
required by law or the Certificate of Incorporation, exercise all such powers
and do all such acts and things as may be exercised or done by the Corporation.
Section 2.10: Compensation of Directors. Directors, as such, may
------------ -------------------------
receive, pursuant to a resolution of the Board of Directors, fees and other
compensation for their services as directors, including without limitation their
services as members of committees of the Board of Directors.
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<PAGE>
ARTICLE III
COMMITTEES
Section 3.1: Committees. The Board of Directors may, by resolution
----------- ----------
passed by a majority of the whole Board, designate one or more committees, each
committee to consist of one or more of the directors of the Corporation. The
Board may designate one or more directors as alternate members of any committee
who may replace any absent or disqualified member at any meeting of the
committee. In the absence or disqualification of a member of the committee, the
member or members thereof present at any meeting of such committee who are not
disqualified from voting, whether or not he, she or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member. Any such committee,
to the extent provided in a resolution of the Board of Directors, shall have and
may exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation and may authorize the
seal of the Corporation to be affixed to all papers that may require it; but no
such committee shall have the power or authority in reference to amending the
Certificate of Incorporation (except that a committee may, to the extent
------
authorized in the resolution or resolutions providing for the issuance of shares
of stock adopted by the Board of Directors as provided in subsection (a) of
Section 151 of the Delaware General Corporation Law, fix the designations and
any of the preferences or rights of such shares relating to dividends,
redemption, dissolution, any distribution of assets of the Corporation, or the
conversion into, or the exchange of such shares for, shares of any other class
or classes or any other series of the same or any other class or classes of
stock of the Corporation, or fix the number of shares of any series of stock or
authorize the increase or decrease of the shares of any series), adopting an
agreement of merger or consolidation under Sections 251 or 252 of the Delaware
General Corporation Law, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the Corporation's property and assets,
recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution, or amending the Bylaws of the Corporation; and
unless the resolution of the Board of Directors expressly so provides, no such
committee shall have the power or authority to declare a dividend, authorize the
issuance of stock or adopt a certificate of ownership and merger pursuant to
Section 253 of the Delaware General Corporation Law.
Section 3.2: Committee Rules. Unless the Board of Directors otherwise
----------- ---------------
provides, each committee designated by the Board may make, alter and repeal
rules for the conduct of its business. In the absence of such rules, each
committee shall conduct its business in the same manner as the Board of
Directors conducts its business pursuant to Article II of these Bylaws.
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<PAGE>
ARTICLE IV
OFFICERS
Section 4.1: Generally. The officers of the Corporation shall consist of a
----------- ---------
Chief Executive Officer and/or a President, one or more Vice Presidents, a
Secretary, a Treasurer and such other officers, including a Chairman of the
Board of Directors and/or Chief Financial Officer, as may from time to time be
appointed by the Board of Directors. All officers shall be elected by the Board
of Directors; provided, however, that the Board of Directors may empower the
-------- -------
Chief Executive Officer of the Corporation to appoint officers other than the
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Financial Officer or the Treasurer. Each officer shall hold office until his or
her successor is elected and qualified or until his or her earlier death,
resignation or removal. Any number of offices may be held by the same person.
Any officer may resign at any time upon written notice to the Corporation. Any
vacancy occurring in any office of the Corporation by death, resignation,
removal or otherwise may be filled by the Board of Directors.
Section 4.2: Chief Executive Officer. Subject to the control of the
----------- -----------------------
Board of Directors and such supervisory powers, if any, as may be given by the
Board of Directors, the powers and duties of the Chief Executive Officer of the
Corporation are:
(a) To act as the general manager and, subject to the control of the
Board of Directors, to have general supervision, direction and control of the
business and affairs of the Corporation;
(b) To preside at all meetings of the stockholders;
(c) To call meetings of the stockholders to be held at such times and,
subject to the limitations prescribed by law or by these Bylaws, at such places
as he or she shall deem proper; and
(d) To affix the signature of the Corporation to all deeds, conveyances,
mortgages, guarantees, leases, obligations, bonds, certificates and other papers
and instruments in writing which have been authorized by the Board of Directors
or which, in the judgment of the Chief Executive Officer, should be executed on
behalf of the Corporation; to sign certificates for shares of stock of the
Corporation; and, subject to the direction of the Board of Directors, to have
general charge of the property of the Corporation and to supervise and control
all officers, agents and employees of the Corporation.
The President shall be the Chief Executive Officer of the Corporation unless the
Board of Directors shall designate another officer to be the Chief Executive
Officer. If there is no President, and the Board of Directors has not designated
any other officer to be the Chief Executive Officer, then the Chairman of the
Board shall be the Chief Executive Officer.
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<PAGE>
Section 4.3: Chairman of the Board. The Chairman of the Board shall have
----------- ---------------------
the power to preside at all meetings of the Board of Directors and shall have
such other powers and duties as provided in these Bylaws and as the Board of
Directors may from time to time prescribe.
Section 4.4: President. The President shall be the Chief Executive
----------- ---------
Officer of the Corporation unless the Board of Directors shall have designated
another officer as the Chief Executive Officer of the Corporation. Subject to
the provisions of these Bylaws and to the direction of the Board of Directors,
and subject to the supervisory powers of the Chief Executive Officer (if the
Chief Executive Officer is an officer other than the President), and subject to
such supervisory powers and authority as may be given by the Board of Directors
to the Chairman of the Board and/or to any other officer, the President shall
have the responsibility for the general management and control of the business
and affairs of the Corporation and the general supervision and direction of all
of the officers, employees and agents of the Corporation (other than the Chief
Executive Officer, if the Chief Executive Officer is an officer other than the
President) and shall perform all duties and have all powers that are commonly
incident to the office of president or that are delegated to the President by
the Board of Directors.
Section 4.5: Vice President. Each Vice President shall have all such
----------- --------------
powers and duties as are commonly incident to the office of Vice President or
that are delegated to him or her by the Board of Directors or the Chief
Executive Officer. A Vice President may be designated by the Board to perform
the duties and exercise the powers of the Chief Executive Officer in the event
of the Chief Executive Officer's absence or disability.
Section 4.6: Chief Financial Officer. Subject to the direction of the
----------- -----------------------
Board of Directors and the President, the Chief Financial Officer shall perform
all duties and have all powers that are commonly incident to the office of chief
financial officer.
Section 4.7: Treasurer. The Treasurer shall have custody of all monies
------------ ---------
and securities of the Corporation. The Treasurer shall make such disbursements
of the funds of the Corporation as are authorized and shall render from time to
time an account of all such transactions. The Treasurer shall also perform such
other duties and have such other powers as are commonly incident to the office
of a treasurer or as the Board of Directors or the President may from time to
time prescribe.
Section 4.8: Secretary. The Secretary shall issue or cause to be issued
----------- ---------
all authorized notices for, and shall keep or cause to be kept, minutes of all
meetings of the stockholders and the Board of Directors. The Secretary shall
have charge of the corporate minute books and similar records and shall perform
such other duties and have such other powers as are commonly incident to the
office of secretary or as the Board of Directors or the President may from time
to time prescribe.
Section 4.9: Delegation of Authority. The Board of Directors may from
----------- -----------------------
time to time delegate the powers or duties of any officer to any other officers
or agents, notwithstanding any provision hereof.
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Section 4.10: Removal. Any officer of the Corporation shall serve at the
------------ -------
pleasure of the Board of Directors and may be removed at any time, with or
without cause, by the Board of Directors. Such removal shall be without
prejudice to the contractual rights of such officer, if any, with the
Corporation.
ARTICLE V
STOCK
Section 5.1: Certificates. Every holder of stock shall be entitled to
----------- ------------
have a certificate signed by or in the name of the Corporation by the Chairman
or Vice-Chairman of the Board of Directors, or the President or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the Secretary or
an Assistant Secretary, of the Corporation, certifying the number of shares
owned by such stockholder in the Corporation. Any or all of the signatures on
the certificate may be a facsimile.
Section 5.2: Lost, Stolen or Destroyed Stock Certificates; Issuance of
----------- ---------------------------------------------------------
New Certificates. The Corporation may issue a new certificate of stock in
- ----------------
the place of any certificate previously issued by it that is alleged to have
been lost, stolen or destroyed, and the Corporation may require the owner of the
lost, stolen or destroyed certificate, or such owner's legal representative, to
agree to indemnify the Corporation and/or to give the Corporation a bond
sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate.
Section 5.3: Other Regulations. The issue, transfer, conversion and
----------- -----------------
registration of stock certificates shall be governed by such other regulations
as the Board of Directors may establish.
ARTICLE VI
INDEMNIFICATION
Section 6.1: Indemnification of Officers and Directors. Each person who
----------- -----------------------------------------
was or is made a party to, or is threatened to be made a party to, or is
involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "proceeding"), by reason of the fact that he
----------
or she (or a person of whom he or she is the legal representative) is or was a
director or officer of the Corporation or is or was serving at the request of
the Corporation as a director or officer of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, shall be indemnified and held harmless by the
Corporation to the fullest extent permitted by the Delaware General Corporation
Law against all expenses, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes and penalties and amounts paid or to be
paid in settlement) reasonably incurred or suffered by such person in connection
therewith, and such indemnification shall
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<PAGE>
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of his or her heirs, executors and administrators;
provided, however, that the Corporation shall indemnify any such person seeking
- -------- -------
indemnity in connection with a proceeding (or part thereof) initiated by such
person only if such proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation; provided, further, that the Corporation shall not
-------- -------
be required to indemnify a person for amounts paid in settlement of a proceeding
unless the Corporation consents in writing to such a settlement (such consent
not to be unreasonably withheld).
Section 6.2: Advance of Expenses. The Corporation shall pay all expenses
----------- -------------------
(including attorneys' fees) incurred by such a director or officer in defending
any such proceeding as such expenses are incurred in advance of its final
disposition; provided, however, that if the Delaware General Corporation Law
-------- -------
then so requires, the payment of such expenses incurred by such a director or
officer in advance of the final disposition of such proceeding shall be made
only upon delivery to the Corporation of an undertaking, by or on behalf of such
director or officer, to repay all amounts so advanced if it should be determined
ultimately that such director or officer is not entitled to be indemnified under
this Article VI or otherwise; and provided, further, that the Corporation shall
-------- -------
not be required to advance any expenses to a person against whom the Corporation
directly brings a claim, in a proceeding, alleging that such person has breached
his or her duty of loyalty to the Corporation, committed an act or omission not
in good faith or that involves intentional misconduct or a knowing violation of
law, or derived an improper personal benefit from a transaction.
Section 6.3: Non-Exclusivity of Rights. The rights conferred on any
------------ -------------------------
person in this Article VI shall not be exclusive of any other right that such
person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, Bylaw, agreement, vote or consent of stockholders
or disinterested directors, or otherwise. Additionally, nothing in this Article
VI shall limit the ability of the Corporation, in its discretion, to indemnify
or advance expenses to persons whom the Corporation is not obligated to
indemnify or advance expenses pursuant to this Article VI.
Section 6.4: Indemnification Contracts. The Board of Directors is
----------- -------------------------
authorized to cause the Corporation to enter into indemnification contracts with
any director, officer, employee or agent of the Corporation, or any person
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, including employee benefit plans, providing indemnification and
related rights to such person. Such rights may be greater than those provided
in this Article VI.
Section 6.5: Effect of Amendment. Any amendment, repeal or modification
----------- -------------------
of any provision of this Article VI shall be prospective only, and shall not
adversely affect any right or protection conferred on a person pursuant to this
Article VI and existing at the time of such amendment, repeal or modification.
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ARTICLE VII
NOTICES
Section 7.1: Notice. Except as otherwise specifically provided herein or
----------- ------
required by law, all notices required to be given pursuant to these Bylaws shall
be in writing and may in every instance be effectively given by hand delivery
(including use of a delivery service), by depositing such notice in the mail,
first-class postage prepaid for notices within the U.S. and airmail postage
prepaid for notices in which the sender or recipient is outside of the U.S., or
by sending such notice by prepaid telegram, telex, recognized express courier,
mailgram or facsimile. Any such notice shall be addressed to the person to whom
notice is to be given at such person's address as it appears on the records of
the Corporation. The notice shall be deemed given (i) in the case of hand
delivery, when received by the person to whom notice is to be given or by any
person accepting such notice on behalf of such person, (ii) in the case of
delivery by mail, upon deposit in the mail, (iii) in the case of delivery by
recognized express courier, on the first business day after such notice is
dispatched, and (iv) in the case of delivery via telegram, telex, mailgram, or
facsimile, when dispatched.
Section 7.2: Waiver of Notice. Whenever notice is required to be given
----------- ----------------
under any provision of these Bylaws, a written waiver of notice, signed by the
person entitled to notice, whether before or after the time stated therein,
shall be deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting at the beginning of the meeting to
the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders, directors or members of a
committee of directors need be specified in any written waiver of notice.
ARTICLE VIII
INTERESTED DIRECTORS
Section 8.1: Interested Directors; Quorum. No contract or transaction
----------- ----------------------------
between the Corporation and one or more of its directors or officers, or between
the Corporation and any other corporation, partnership, association or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board or committee thereof that authorizes
the contract or transaction, or solely because his, her or their votes are
counted for such purpose, if: (i) the material facts as to his, her or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board or committee
in good faith authorizes the contract or transaction by the affirmative votes of
a majority of the disinterested directors, even though the disinterested
directors be less than a quorum; (ii) the material facts as to his, her or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the
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<PAGE>
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or (iii) the
contract or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified by the Board of Directors, a committee thereof
or the stockholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorizes the contract or transaction.
ARTICLE IX
MISCELLANEOUS
Section 9.1: Fiscal Year. The fiscal year of the Corporation shall be
----------- -----------
determined by resolution of the Board of Directors.
Section 9.2: Seal. The Board of Directors may provide for a corporate
----------- ----
seal, which shall have the name of the Corporation inscribed thereon and shall
otherwise be in such form as may be approved from time to time by the Board of
Directors.
Section 9.3: Form of Records. Any records maintained by the Corporation
----------- ---------------
in the regular course of its business, including its stock ledger, books of
account and minute books, may be kept on, or be in the form of, magnetic tape,
diskettes, photographs, microphotographs or any other information storage
device, provided that the records so kept can be converted into clearly legible
--------
form within a reasonable time. The Corporation shall so convert any records so
kept upon the request of any person entitled to inspect the same.
Section 9.4: Reliance Upon Books and Records. A member of the Board of
----------- -------------------------------
Directors, or a member of any committee designated by the Board of Directors
shall, in the performance of his or her duties, be fully protected in relying in
good faith upon records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of the Corporation's
officers or employees, or committees of the Board of Directors, or by any other
person as to matters the member reasonably believes are within such other
person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Corporation.
Section 9.5: Certificate of Incorporation Governs. In the event of any
----------- ------------------------------------
conflict between the provisions of the Corporation's Certificate of
Incorporation and Bylaws, the provisions of the Certificate of Incorporation
shall govern.
Section 9.6: Severability. If any provision of these Bylaws shall be held
----------- ------------
to be invalid, illegal, unenforceable or in conflict with the provisions of the
Corporation's Certificate of Incorporation, then such provision shall
nonetheless be enforced to the maximum extent possible consistent with such
holding and the remaining provisions of these Bylaws (including, without
limitation, all portions of any section of these Bylaws containing any such
provision held to be invalid, illegal, unenforceable or in conflict with the
Certificate of Incorporation that are not
-16-
<PAGE>
themselves invalid, illegal, unenforceable or in conflict with the Certificate
of Incorporation) shall remain in full force and effect.
ARTICLE X
AMENDMENT
Section 10.1: Amendments. Stockholders of the Corporation holding a
------------ ----------
majority of the Corporation's outstanding voting stock shall have the power to
adopt, amend or repeal Bylaws. To the extent provided in the Corporation's
Certificate of Incorporation, the Board of Directors of the Corporation shall
also have the power to adopt, amend or repeal Bylaws of the Corporation, except
insofar as Bylaws adopted by the stockholders shall otherwise provide.
-17-
<PAGE>
EXHIBIT 4.01
===============================================================================
CP SHARES
COMMON STOCK [LOGO OF CENTAUR PHARMACEUTICALS, INC.] COMMON STOCK
CUSIP 15134E 10 8
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
SEE REVERSE FOR CERTAIN
DEFINITIONS AND A
STATEMENT AS TO THE
RIGHTS, PREFERENCES,
PRIVILEGES AND
RESTRICTIONS ON SHARES
THIS CERTIFIES THAT
IS THE OWNER OF
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, PAR VALUE $0.001 PER
SHARE OF Centaur Pharmaceuticals, Inc, (the "Corporation"), a Delaware
corporation. The shares represented by this certificate are transferable only on
the stock transfer books of the Corporation by the holder of record hereof, or
by the holder's duly authorized attorney or legal representative, upon the
surrender of this certificate properly endorsed.
This certificate is not valid until countersigned and registered by the
Corporation's transfer agent and registrar.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
executed by the facsimile signatures of its duly authorized officers and has
caused a facsimile of its corporate seal to be hereunto affixed.
Dated:
[CORPORATE SEAL]
/s/ Brian D. Frenzel /s/ Joseph L. Turner
PRESIDENT AND CHIEF SECRETARY, TREASURER AND
EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
COUNTERSIGNED AND REGISTERED:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
TRANSFER AGENT AND REGISTRAR
BY
AUTHORIZED OFFICER
================================================================================
<PAGE>
CENTAUR PHARMACEUTICALS, INC.
A statement of the rights, preferences, privileges and restrictions granted
to or imposed upon each class of stock or series thereof, as established from
time to time by the Certificate of Incorporation of the Corporation and by any
certificate of determination, and the number of shares constituting each class
and series and the designations thereof, may be obtained by the holder hereof
upon written request and without charge from the Secretary of the Corporation
at its corporate headquarters.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT-.........Custodian.........
TEN ENT - as tenants by the (Cust) (Minor)
entireties under Uniform Gifts to
JT TEN - as joint tenants with Minors Act..................
right of survivorship (State)
and not as tenants in UNIF TRF MIN ACT- .....Custodian (until age..)
common (Cust)
.....under Uniform Transfers
(Minor)
to Minors Act...............
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, _____________________________ hereby sell, assign and
transfer unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
_____________________________
_____________________________
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
_________________________________________________________________________ Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
________________________________________________________________________Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated ____________________________
___________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE
FACE OF THE CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY
CHANGE WHATEVER.
Signature(s) Guaranteed
By_____________________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.
<PAGE>
EXHIBIT 10.20
STOCKHOLDERS' AGREEMENT
CUTANIX CORPORATION
DATED: JANUARY 15, 1998
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Overview of Agreement................................................ 2
2. Certain Definitions.................................................. 3
(a) Affiliate....................................................... 3
(b) Bona Fide Offer................................................. 3
(c) Consulting Agreement............................................ 4
(d) Control......................................................... 4
(e) Corporation's Notice............................................ 4
(f) Determination Date.............................................. 4
(g) Employee Stockholder............................................ 4
(h) Employment Agreement............................................ 4
(i) Immediate Family Member......................................... 4
(j) Involuntary Transfer............................................ 4
(k) I/T Stockholder................................................. 5
(l) I/T Shares...................................................... 5
(m) Remaining Stockholders.......................................... 5
(n) Selling Stockholder............................................. 5
(o) Stock Purchase Agreements....................................... 5
3. Restrictions on Transfer............................................. 6
(a) Restrictions on Transfer of Securities.......................... 6
(b) Exceptions...................................................... 6
(c) Transferee Bound by the Terms of this Agreement................. 6
(d) Consent Granted In Connection With Indebtedness................. 7
4. When the Corporation May Purchase Shares............................. 7
(a) In General...................................................... 7
(b) Bona Fide Offer................................................. 8
(c) Termination for Cause........................................... 9
(d) Involuntary Transfer............................................ 9
(e) Voting Rights................................................... 10
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
5. Procedures Applicable to All Transfers of Shares..................... 12
(a) Who May Buy: Corporation, then the Remaining
Stockholders.................................................. 12
(b) If the Remaining Stockholders Buy,
How Many Shares Can they Purchase?............................ 12
(c) What is the Purchase Price for the Shares?...................... 13
6. Closing and Payment of Purchase Price................................ 16
(a) Closing; Purchase Price......................................... 16
(b) Closing Procedures.............................................. 17
7. Transfer of Shares After Expiration of the Corporation's
and the Remaining Stockholders' Rights............................... 17
8. Come Along Rights.................................................... 18
9. Governance of Corporation............................................ 20
(a) Directors....................................................... 20
(b) Required Vote................................................... 20
(c) Duration of Voting Agreement.................................... 22
10. Legend............................................................... 22
11. Investment Only...................................................... 22
12. Others Securities Covered............................................ 23
13. Equitable Relief..................................................... 23
14. Notices.............................................................. 24
15. Entire Understanding................................................. 24
16. Non-Transferable and Non-Assignable.................................. 25
17. Severability......................................................... 25
18. Captions............................................................. 25
19. Dispute Resolution................................................... 26
(a) Good Faith Negotiations......................................... 26
(b) Arbitration..................................................... 26
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
(c) Rules of the Arbitration........................................ 26
(d) Arbitrators..................................................... 27
(e) Finality of Arbitration......................................... 27
20. Termination.......................................................... 28
21. New Stockholders..................................................... 28
22. Governing Law........................................................ 28
EXHIBIT A - Stockholders.................................................. 32
EXHIBIT B - Form of Irrevocable Proxies................................... 33
EXHIBIT C - Form of Promissory Note....................................... 35
</TABLE>
iv
<PAGE>
STOCKHOLDERS' AGREEMENT
-----------------------
This AGREEMENT is dated as of the 15th day of January, 1998 and is by
and among Cutanix Corporation, a Delaware corporation (the "Corporation"),
Charles R. Engles ("Engles"), Dennis S. Bookshester ("Bookshester") and Centaur
Pharmaceuticals, Inc. ("Centaur") (Engles, Bookshester and Centaur are referred
to herein individually as a "Stockholder" and collectively as the
"Stockholders").
WHEREAS, the Corporation presently has authorized 3,000,000 shares of
common stock, par value $.10 per share ("Common Stock"), of which 900,000 are
issued and outstanding and owned by the Stockholders (such outstanding shares of
common stock being referred to herein as the "Shares"), and 2,000,000 shares
preferred stock, none of which is outstanding; and
WHEREAS, the parties desire to make provisions for the transfer and
restrictions on transfer of the capital stock of the Corporation so as to insure
the proper growth, control and prosperity of the Corporation;
NOW, THEREFORE, in consideration of the mutual representations and
covenants herein contained, the parties hereto represent and agree as follows:
<PAGE>
1. Overview of Agreement.
---------------------
The objective of this Agreement is to limit and govern the transfer of
Shares and provide the opportunity for the orderly repurchase by the Corporation
and/or the Stockholders of the Shares held by Stockholders under various
circumstances, and to provide for the orderly governance of the Corporation.
Generally, a Stockholder may not sell his Shares for one year from the
date of this Agreement at all without the prior written permission of the other
Stockholders, and thereafter (i) any Stockholder (A) who desires to sell some or
all of his Shares to a third party, or (B) whose shares are subject to an
Involuntary Transfer, (ii) Engles (and all other Cutanix employees who become
Stockholders, if any) if terminated as an employee of the Corporation for cause,
and (iii) Bookshester, if he is terminated as a consultant to the Corporation
for cause, shall be deemed to be a selling Stockholder who has made an offer to
the Corporation to sell all of his/its Shares. If the Corporation does not
purchase any or only purchases part of those Shares, the other Stockholders
shall be entitled to purchase all or any part of the Shares not purchased by the
Corporation as described in this Agreement. Under certain circumstances certain
Stockholders may also have a "come along" right, which would allow them to
include their Shares as part of a sale of Shares being made by a Selling
Stockholder. The purchase price for a Selling Stockholder's Shares generally
shall be based upon their fair market value, which will be determined by the
procedures set forth in Section 5, below. The purchase price payable to a
Selling Stockholder is to be paid in three annual installments of thirty four
percent (34%), thirty three percent (33%) and thirty three percent (33%), with
the first installment to be made at
2
<PAGE>
closing, and with interest on the outstanding balance to accrue at the prime
rate as of the day of sale, as evidenced by an interest bearing note, as
described below, unless the Selling Stockholder sells a small number of Shares,
in which cases, payment in full will be made at Closing. In addition, if Engles
ceases to be an employee of the Corporation or Bookshester ceases to provide
consulting services to the Corporation prior to the completion of four full-
years of service, they are required to grant an irrevocable proxy to a designee
of the Board of Directors to vote their Shares. This Agreement (and the proxies,
if any) shall terminate upon the completion of an initial public offering of the
Corporation's securities.
Should any of the descriptions in this Overview be inconsistent with
the remainder of this Agreement, the latter shall govern.
2. Certain Definitions.
-------------------
(a) "Affiliate" shall mean (i) any person or entity which Controls,
is Controlled by, or is under common Control with, another person or entity,
(ii) any entity which is Controlled by an Immediate Family Member of an officer,
director or Stockholder of the Corporation, or (iii) any person or entity which
Controls, is Controlled by or is under Common Control with an entity described
in clause (ii) of this Section 2(a).
(b) "Bona Fide Offer" shall mean an offer in writing, signed by a
person or entity other than the Corporation, an Affiliate of the Corporation or
an Affiliate of the Selling Stockholder offering to purchase all or any part of
a Stockholder's Shares.
3
<PAGE>
(c) "Consulting Agreement" shall mean the Consulting Agreement between
the Corporation and Bookshester of even date herewith.
(d) "Control" shall mean the ownership of or ability to control fifty
percent (50%) or more of the outstanding voting securities or other indicia of
ownership of an entity.
(e) "Corporation's Notice" shall mean a written notice, to be
delivered by the Corporation to the persons identified in Sections 4(b) through
and including 4(d), below, setting forth the number of Shares, if any, which the
Corporation desires to purchase from a Selling Stockholder.
(f) "Determination Date" shall mean (i) in the case of the termination
of Engles' (or other employees') employment or Bookshester's engagement as a
consultant by the Corporation, the Last Day and (ii) in the case of an
Involuntary Transfer, the date of the occurrence of the Involuntary Transfer
(The term "Last Day" is defined in Section 4(c), below).
(g) "Employee Stockholder" shall mean an employee of the Corporation,
other than Engles, who becomes a stockholder after the execution of this
Agreement.
(h) "Employment Agreement" shall mean the Employment Agreement between
the Corporation and Engles dated as of November 1, 1997.
(i) "Immediate Family Member" shall mean a spouse, parent,
grandparent, sibling, lineal descendent, aunt, uncle or first cousin of a
person.
(j) "Involuntary Transfer" shall mean any transfer, proceeding or
action by which a Stockholder shall be involuntarily deprived or divested by
operation of law or otherwise of any right, title or interest in or to any of
his Shares, including, but not limited to, (i) any
4
<PAGE>
transfer pursuant to a divorce or separation agreement or a final decree of a
court in a divorce action, (ii) any seizure under levy of attachment or
execution, including any transfer of such Shares related to the satisfaction of
an obligation, (iii) any transfer in connection with bankruptcy or other court
proceeding to a debtor in possession, trustee in bankruptcy or other officer or
agency, (iv) any transfer to a state or to a public officer or agency pursuant
to any statute pertaining to escheat or abandoned property, or (v) any transfer
similar to those set forth in Subsections 2(j)(i) through (iv) above. For the
purpose of clarification, death or incompetency shall not constitute an
Involuntary Transfer.
(k) "I/T Stockholder" shall mean a Stockholder whose Shares, in
whole or in part, have been or are subject to an Involuntary Transfer.
(l) "I/T Shares" shall mean those Shares that have been or are
subject to an Involuntary Transfer.
(m) "Remaining Stockholders" shall mean all of the Stockholders of
the Corporation other than a Selling Stockholder.
(n) "Selling Stockholder" shall mean a Stockholder who either elects,
or is required, to offer to sell his Shares to the Corporation and/or, if the
Corporation elects not to purchase all of such Shares, to the other
Stockholders.
(o) "Stock Purchase Agreements" shall mean, in the case of Engles, the
Stock Purchase Agreement between Engles and the Corporation dated as of November
1, 1997, and in the case of Bookshester, the Stock Purchase Agreement between
Bookshester and the Corporation dated as of January 15, 1998.
5
<PAGE>
3. Restrictions on Transfer.
------------------------
(a) Restrictions on Transfer of Securities. For a period of one year
--------------------------------------
from the date of this Agreement, no Stockholder may transfer his Shares under
any circumstances without the prior written consent of the other Stockholders,
which consent may be withheld for any reason whatsoever. Thereafter, except as
otherwise set forth herein, no Stockholder may sell, assign, transfer, pledge,
encumber or otherwise dispose of any of his/its Shares without the prior written
consent of the other Stockholders, which consent may be withheld for any reason
whatsoever. Otherwise, any attempted sale, assignment, transfer, pledge,
encumbrance or other disposition shall be void and of no effect. Any attempted
Transfer in violation of this provision shall be void.
(b) Exceptions. Notwithstanding anything in this Agreement to the
----------
contrary (i) the provisions of this Agreement shall not apply to the Transfer of
Shares by Centaur to any of its Affiliates, or by Engles and Bookshester to
trusts or similar entities created and/or controlled by them for the benefit of
themselves and/or their respective spouses and lineal descendants, so long as
the transferee in any such case agrees in writing to be bound by the terms and
conditions of this Agreement and (ii) the Corporation's right to purchase
Engles' Shares and Bookshester's Shares pursuant to Section 7 of the Stock
Purchase Agreements shall take priority over any of the provisions of this
Agreement.
(c) Transferee Bound by the Terms of this Agreement. Notwithstanding
-----------------------------------------------
anything contained in this Agreement to the contrary, if any Stockholder
transfers any of his/its Shares, the transferee(s) shall be bound by the terms
of this Agreement as if such transferee(s) were a party
6
<PAGE>
hereto. All such transferee(s) shall execute and deliver to the Corporation and
the other Stockholders an agreement to be bound by all of the terms and
conditions of this Agreement. If a transferee does not execute and deliver such
agreement within thirty (30) days of the transfer, or refuses to execute such
agreement, then the Shares which were the subject of the transfer shall be
canceled.
(d) Consent Granted In Connection With Indebtedness. If consent is
-----------------------------------------------
granted to a Stockholder to assign, pledge, mortgage, hypothecate or otherwise
encumber all or any of the Stockholder's Shares in connection with any
indebtedness owed by the Stockholder and either (i) the Stockholder defaults in
the payment or in any other manner on the note or other obligation secured by
the aforesaid assignment, pledge, mortgage, hypothecation or other encumbrance,
or (ii) the Stockholder's Shares are attached, seized or otherwise possessed,
then the Corporation and, to the extent the Corporation does not act, the other
Stockholders, shall have the right and power (but not the obligation) to cure
such default and/or take such other actions (and to receive such assigned,
pledged, mortgaged, hypothecated or otherwise encumbered Shares as consideration
therefor) in order to acquire title to such Shares and to prevent the secured
creditor or creditors from taking title (either legal or equitable) to such
Shares.
4. When the Corporation May Purchase Shares.
----------------------------------------
(a) In General. Any Stockholder who (i) wishes to sell his/its
----------
Shares to an outside purchaser pursuant to a Bona Fide Offer or (ii) is subject
to an Involuntary Transfer shall be deemed a Selling Stockholder who has made an
offer first to the Corporation and then to the
7
<PAGE>
Remaining Stockholders to sell his/its Shares as set forth below. In addition,
Engles shall be deemed to be a Selling Stockholder if he is terminated from
employment with the Corporation for "Cause" (as defined in the Employment
Agreement), Bookshester shall be deemed to be a Selling Stockholder if he is
terminated as a consultant to the Corporation for "Cause" (as defined in the
Consulting Agreement), and an Employee Stockholder shall be deemed to be a
Selling Stockholder if he is terminated for "Cause" (as defined in his
employment agreement with the Corporation, or if none, as such term is defined
in the Employment Agreement).
(b) Bona Fide Offer. A Stockholder may only sell Shares to a third
---------------
party pursuant to a Bona Fide Offer. If a Selling Stockholder receives a Bona
Fide Offer from a third party to purchase all or part of his/her/its Shares
which the Selling Stockholder wishes to accept, the Selling Stockholder shall
promptly send a certified copy of the Bona Fide Offer to the Corporation and the
Remaining Stockholders, which copy will include, among other things, the terms
of the Bona Fide Offer and the name(s), address(es) (both home and office) and
business(es) or other occupation(s) of the offerer(s) (the "Notice of Bona Fide
Offer"). The Corporation shall have the first right to purchase any or all of
the Shares subject to the Bona Fide Offer on the terms set forth in the Notice
of Bona Fide Offer by delivering the Corporation's Notice to the Selling
Stockholder and the Remaining Stockholders within forty five (45) days from its
receipt thereof. If the Corporation purchases none, or less than all, of the
Shares offered by the Selling Stockholder, the Remaining Stockholders will have
the right to purchase any and all of the remaining Shares offered by the Selling
Stockholder, all in accordance with the procedures set forth in Section 5,
below.
8
<PAGE>
(c) Termination for Cause. If Engles' employment with the
---------------------
Corporation is terminated for Cause pursuant to the Employment Agreement, or if
any Employee Stockholder is terminated for Cause as determined under Section
4(a) hereof, or if Bookshester's engagement as a consultant to the Corporation
is terminated for Cause pursuant to the Consulting Agreement, he will be deemed
to be a Selling Stockholder who on the Last Day has offered to sell all of his
Shares first to the Corporation and then to the Remaining Stockholders. The
Corporation shall have the first right to purchase any or all of the Selling
Stockholder's Shares by delivering the Corporation's Notice to the Selling
Stockholder and the Remaining Stockholders within forty five (45) days from the
Last Day. If the Corporation purchases none, or less than all, of the Shares
offered by the Selling Stockholder, the Remaining Stockholders will have the
right to purchase any and all of the remaining Shares offered by the Selling
Stockholder, all in accordance with the procedures set forth in Section 5,
below. For the purpose of this Agreement, the term "Last Day" shall mean, in
the case of Engles or an Employee Stockholder, the date Engles or an Employee
Stockholder, as the case may be, is terminated as an employee for Cause and, in
the case of Bookshester, shall mean the date Bookshester is terminated as a
consultant for Cause.
(d) Involuntary Transfer. An I/T Stockholder, if feasible, or his
--------------------
personal representative (including, for example, a guardian), as the case may
be, must send written notice of an Involuntary Transfer to the Corporation and
the Remaining Stockholders, with a copy to the intended transferee of the Shares
(the "I/T Transferee"), within thirty (30) days after the occurrence thereof
(the "Notice of Involuntary Transfer"). The Corporation shall have the first
9
<PAGE>
right to purchase any or all of the I/T Shares by giving written notice to the
I/T Stockholder, or his personal representative (including, for example, a
guardian), as the case may be, the I/T Transferee and the Remaining Stockholders
within forty five (45) days from either the date of the Involuntary Transfer or
the date of the Notice of Involuntary Transfer, at the Corporation's option. If
the Corporation purchases none, or less than all, of the I/T Shares, the
Remaining Stockholders will have the right to purchase any and all of the
remaining I/T Shares, all in accordance with the procedures set forth in Section
5, below.
(e) Voting Rights. Upon the execution of this Agreement, Engles and
-------------
Bookshester shall each execute and deliver to the Corporation an irrevocable
proxy in the form annexed hereto as Exhibit B which will provide that if either
(i) Engles fails to complete four full years of service under the Employment
Agreement or (ii) Bookshester fails to complete four full years of service under
the Consulting Agreement, such party will grant to a designee selected by the
Corporation's Board of Directors from time to time the irrevocable right and
power to vote all of his Shares which, pursuant to the Stock Purchase
Agreements, vested prior to his departure from the Company, on all matters to
come before the stockholders of the Corporation. For the purpose of this
Agreement, the issue of whether Engles or Bookshester has completed four years
of service to the Corporation will, in the case of Engles, be based upon whether
the Employment Agreement was continuously in force for four years, and in the
case of Bookshester, will be based upon whether the Consulting Agreement was
continuously in force for four years. Any
10
<PAGE>
proxy granted under this Section will terminate upon the termination of this
Agreement or upon a Change in Control/1/.
- ---------------------
/1/ For the purposes of this Agreement, "Change in Control" shall mean (a)
prior to an initial public offering by the Corporation, the date that a person
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended from time to time or any successor thereto (the "Exchange
Act")) has become the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of fifty percent (50%) or more of the voting power of all
securities of the Corporation then outstanding (not including any person or
entity which becomes a stockholder of the Corporation prior to January 31, 1998
or any Affiliate of such persons or entities); (b) after the initial public
offering by the Corporation, (i) the date of public announcement that a person
has become the beneficial owner of thirty percent (30%) or more of the voting
power of all securities of the Corporation then outstanding (not including any
person or entity which becomes a stockholder of the Corporation prior to January
31, 1998 of such or any Affiliates of such persons or entities or (ii) the date
of the commencement of a tender offer or tender exchange by any person, if upon
the consummation thereof such person would be the beneficial owner of thirty
percent (30%) or more of the voting power of all securities of the Corporation
then outstanding; or (c) either before or after an initial public offering by
the Corporation, (i) the date on which individuals who constituted the Board of
Directors of the Corporation on the date this Agreement was adopted cease for
any reason to constitute a majority thereof, provided that any person becoming a
director subsequent to such date whose election or nomination was approved by at
least a majority of such incumbent Board of Directors shall be considered as
though such person were an incumbent director, (ii) the dissolution of the
Corporation; (iii) a sale or other disposition or the last sale or other
disposition to occur in a series of sales and/or other dispositions within any
twelve (12) month period ("Serial Sales") by the Corporation of assets which, in
the case of Serial Sales, as of the beginning of such twelve (12) month period,
account for more than seventy five percent (75%) of the total assets or seventy-
five percent (75%) of the revenue of the Corporation, as determined in
accordance with generally accepted accounting principles; provided, however,
that no sale or disposition of assets or stock shall be taken into account to
the extent that proceeds of such sale or disposition (whether in cash or
in-kind) are reinvested or are, in the case of proceeds received in-kind, used
in the ongoing conduct of the Corporation, provided further that such a
reinvestment shall not be deemed to have occurred unless made within twelve (12)
months of such sale or disposition and provided further that, the term
reinvestment shall include, inter alia, the use of proceeds to repay debt
----- ----
incurred in connection with the operation of the business in which the assets
sold or disposed of were used; or (iv) any other event which the Board
determines, in its discretion, would materially alter the structure of the
Corporation or its ownership.
11
<PAGE>
5. Procedures Applicable to All Transfers of Shares.
------------------------------------------------
(a) Who May Buy: Corporation, then the Remaining Stockholders. The
---------------------------------------------------------
Corporation has the first right to buy any or all of the Shares being offered
for sale by a Selling Stockholder. If the Corporation either does not deliver
the Corporation's Notice within the time periods set forth in Sections 4(b)
through and including (d), above, or elects to purchase less than all of the
Shares offered by a Selling Stockholder, then the Remaining Stockholders shall
have the right to purchase any or all of the Shares not being purchased by the
Corporation at the same price and terms which are available to the Corporation.
The Remaining Stockholders may exercise this right by delivering a written
notice of their intention to do so to the Corporation, the other Remaining
Stockholders, the Selling Stockholder (or his/her/its representative, if
applicable) and, if applicable, the I/T Transferee, within forty five (45) days
after the expiration of the forty five (45) day period for the Corporation to
deliver the Corporation's Notice. Any Remaining Stockholder that does not
deliver such notice within such second forty five (45) day period shall be
deemed to have waived its or his rights hereunder to purchase the Shares of the
Selling Stockholder.
(b) If the Remaining Stockholders Buy, How Many Shares Can they
-----------------------------------------------------------
Purchase? If the Corporation does not purchase all of the Shares of a Selling
- --------
Stockholder offered pursuant to Sections 4(b) through and including (d), above,
then the Remaining Stockholders may buy as many or as few of the Shares as they
wish; provided, however, that if more than one Remaining Stockholder desires to
purchase the Shares, the Shares shall be apportioned among them on a pro-rata
basis based upon their respective percentage ownership of the Corporation, as
follows. The
12
<PAGE>
number of Shares which each individual Remaining Stockholder may purchase shall
be determined by multiplying (A) the number of Shares of a Selling Stockholder
available to the Remaining Stockholders for purchase by (B) a fraction, the
numerator of which is the number of Shares owned by an individual Remaining
Stockholder and the denominator of which is the total number of Shares owned by
all of the Remaining Stockholders who desire to participate in the purchase of
the Selling Stockholder's Shares. By way of illustration, only, assume for the
purposes of this example, that there are 1,000,000 shares of common stock
outstanding, with Stockholders A, B, and C owning 100,000, 200,000 and 600,000,
respectively, and 100,000 owned by other Stockholders. Assume further that
Stockholder A desires to sell 100,000 Shares pursuant to a Bona Fide Offer, that
the Corporation elects not to exercise its option to buy Stockholder A's Shares,
and that both Stockholder B and Stockholder C desire to purchase Stockholder A's
Shares. Stockholder B will be entitled to purchase 25,000 of the Shares
(determined by multiplying (i) 100,000 by (ii) 200,000/800,000) and Stockholder
C will be entitled to purchase 75,000 of the Shares (determined by multiplying
(i) 100,000 by (ii) 600,000/800,000).
(c) What is the Purchase Price for the Shares? The purchase price to
-----------------------------------------
be paid for the Shares of a Selling Stockholder shall equal their Fair Market
Value, except (i) in the case of a Bona Fide Offer, in which case the purchase
price shall be as set forth in the Notice of Bona Fide Offer and (ii) in the
case of a Stockholder who is required to sell his Shares because he has either
(A) been terminated as an employee of or consultant to the Corporation for Cause
or (B) been subject to an Involuntary Transfer, in which case the purchase price
for such Stockholder's
13
<PAGE>
Shares shall be 75% of their Fair Market Value. Fair Market Value will be
determined as follows:
(i) In General. The Fair Market Value of a Selling Stockholder's
----------
Shares is to be determined as of the Determination Date and shall equal the Fair
Market Value of all of the Shares then issued and outstanding, multiplied by a
fraction, the numerator of which shall be the number of Shares being sold by the
Selling Stockholder and the denominator of which shall be the total number of
Shares then issued and outstanding.
(ii) Procedures for Determining Fair Market Value. The Fair Market
--------------------------------------------
Value of the Shares of a Selling Stockholder will be determined as follows:
(A) By Agreement. The Selling Stockholder (or his
------------
representative, if applicable, or, in the case of an Involuntary Transfer, the
I/T Transferee) (the "Transferor") and the purchaser(s) of the Selling
Stockholder's Shares will attempt to agree on the Fair Market Value of the
Shares during a period of thirty (30) days commencing on either (i) the date of
the Corporation's Notice, if the Corporation elects to purchase all of the
Selling Stockholder's Shares or (ii) if the Corporation does not give the
Corporation's Notice or elects to purchase none or less than all of the Selling
Stockholder's Shares, the expiration of the period for The Remaining
Stockholders to deliver notice pursuant to Section 5(a) hereof, which thirty
(30) day period may be extended by the written agreement of the Transferor and
The Remaining Stockholders (the "Valuation Discussion Period").
(B) Use of Independent Appraiser(s). If the Transferor and the
-------------------------------
purchaser(s) of the Selling Stockholder's Shares cannot agree on the Fair Market
Value of the
14
<PAGE>
Selling Stockholder's Shares, then all of the Shares issued and outstanding
shall be appraised by an independent appraiser experienced in valuing similarly
situated companies and generally familiar with the skin care and treatment
industry. The Transferor and the purchaser(s) of the Selling Stockholder's
Shares will attempt to agree upon an independent appraiser during a period of
thirty (30) days commencing upon the expiration of the Valuation Discussion
Period, which thirty (30) day time limit may be extended by mutual written
agreement of the Transferor and the purchaser(s). If an independent appraiser is
agreed upon, then such independent appraiser shall appraise all of the then
issued and outstanding Shares and such appraised value shall be deemed to be the
Fair Market Value of the Shares. If the Transferor and the purchaser(s) of the
Selling Stockholder's Shares cannot agree on an independent appraiser, then each
of (a) the Transferor and (b) the purchaser(s), as a group, shall have the right
to select an independent appraiser who shall be experienced in valuing similarly
situated Companies and generally familiar with the skin care and treatment
industry, and the mean of the appraisals of the two (2) independent appraisers
shall be the Fair Market Value, of all of the then issued and outstanding
Shares. Thereafter, the Fair Market Value of the Selling Stockholder's Shares
shall be determined in accordance with the procedures set forth in Section
5(c)(i), above. The methods to be used by such appraiser(s) shall be similar to
those involved in giving a fairness opinion.
(C) Costs. If the parties agree on an independent appraiser, the
-----
costs of independent appraisal shall be borne fifty percent (50%) by the
Transferor and fifty percent (50%) by the purchaser(s) of the Selling
Stockholder's Shares, as a group. If the parties cannot agree on an independent
appraiser, each party shall be responsible only for the costs of the
15
<PAGE>
independent appraiser selected by him/her/it. In either case, if there is more
than one purchaser, each purchaser will be responsible for paying a percentage
of the costs attributed to the purchasers as a group which is equal to the
percentage of the Selling Stockholder's Shares which he/she/it is purchasing.
6. Closing and Payment of Purchase Price.
-------------------------------------
(a) Closing; Purchase Price. The closing of the purchase of a
-----------------------
Selling Stockholder's Shares by the Corporation or the Remaining Stockholders
shall be held within either (i) thirty (30) days of delivery of the
Corporation's Notice, if it intends to purchase all of the Selling Stockholder's
Shares under Section 4(b) through and including (d), above, or (ii) if the
Corporation does not purchase all of the Selling Stockholder's Shares, thirty
(30) days after the expiration of the forty five (45) day period for the
Remaining Stockholders to exercise their right to buy the remaining Shares
provided for in Section 5, above, or such other time as the parties shall agree;
provided, however, that if an appraisal is required to determine the purchase
price pursuant to Section 5(c) hereof, the closing will take place as soon as
possible after the conclusion of the appraisal, but in no event more than ten
(10) business days thereafter. Except as set forth in Section 6(b), below or as
accelerated in the sole discretion of the Board of Directors of the Corporation,
the purchase price for the Shares shall be payable in three equal annual
installments, with the first installment of thirty-four percent (34%) of the
purchase price to be made at the closing and the balance payable in thirty-three
percent (33%) installments on the first two (2) annual anniversary dates of the
closing, together with interest thereon at the prime
16
<PAGE>
rate published by Citibank, N.A. (or a comparable institution selected by the
Board of Directors of the Corporation if Citibank N.A. ceases to be a premier
bank or to publish a prime rate) in effect on the date of the closing. The
purchase price may be prepaid in whole or in part without penalty at any time.
(b) Closing Procedures. At the closing the Transferor shall
------------------
surrender the stock certificate(s) evidencing his Shares, duly endorsed, and
shall receive a check for thirty-four percent (34%) of the purchase price and a
promissory note (a form of which is attached to this Agreement as Exhibit C)
evidencing the purchaser(s)' obligation to pay the balance of the purchase
price. Notwithstanding the foregoing, in the event a Selling Stockholder sells
Shares valued at less then fifty thousand ($50,000), payment in full will be
made at closing.
7. Transfer of Shares After Expiration of the Corporation's and the
----------------------------------------------------------------
Remaining Stockholder's Rights. If the Corporation and/or the Remaining
- ------------------------------
Stockholders do not purchase all of the available Shares of a Selling
Stockholder within the time periods specified in this Agreement, then the
following applies:
(a) In the case of a Bona Fide Offer, the Selling Stockholder, or his
representative, as the case may be, may then sell or otherwise transfer the
unpurchased Shares to a third party on the terms set forth in the Notice of Bona
Fide Offer at any time during a three (3) month period beginning the day after
the Remaining Stockholder's forty-five (45) day purchase period under Section
5(a), above, expires, subject to (i) the purchaser or transferee agreeing to be
bound by the terms of this Agreement and (ii) the rights to the Remaining
Stockholders pursuant
17
<PAGE>
to Section 8 hereof. If the Selling Stockholder, or his representative, fails to
sell or complete the transfer of his or her Shares during such three (3) month
period, he or she may not sell or transfer any of his or her Shares unless he or
she has again complied with the provisions of this Agreement.
(b) In the case of an Involuntary Transfer, the transfer will be
considered completed, subject to the I/T Transferee agreeing to be bound by the
terms of this Agreement.
(c) In the case of Engles and Bookshester, if they become subject to
a termination for Cause as set forth in Section 4(c) hereof, the Stockholder may
retain his Shares, but will continue to be subject to the terms of this
Agreement.
(d) In each of the cases described in Sections 7 (a) - (c), above, all
subsequent transfers of the Shares are subject to the provisions of this
Agreement.
8. Come Along Rights. Centaur, Engles and Bookshester each are free to
-----------------
sell, either in a lump sum or cumulatively, up to fifty percent (50%) of each of
their respective original holdings/2/ without triggering the provisions of this
Section 8, subject to all of the other provisions of this Agreement. In the
event that (i) any of Centaur, Engles or Bookshester, proposes to sell Shares
in excess of fifty percent (50%) of each of their original holdings to a third
party who is not a Stockholder (taking into account all prior sales by the party
of his or its original holdings) and (ii) the Corporation and the Remaining
Stockholders do not desire to purchase all of such Shares, then each of the
others (each, a "Participant") may, but is not
- --------------------
/2/ The original holdings of the parties are as follows: Centaur, 600,000
Shares; Engles, 200,000 Shares; and Bookshester, 100,000 Shares. Such Share
amounts will be adjusted to take into account any stock splits, reverse stock
splits or stock dividends.
18
<PAGE>
required to, exercise a "come along" right to require the proposed purchaser of
the Shares offered by the Selling Stockholder(s) to also purchase any or all of
the Shares owned by him/it on the same terms and conditions; provided, however,
that (i) any Stockholder who exercises a right of first refusal under Section 4
and 5 hereof to purchase any of the Shares of the Selling Stockholder may not
also exercise the come along rights provided for under this Section 8 in
connection with the same transaction and (ii) the maximum number of shares which
a Participant may sell to the purchaser shall be equal to the portion of the
Selling Stockholder's holdings in excess of fifty percent (50%) of his/its
original holdings which are being sold to the third-party purchaser in the
transaction (taking into account all prior sales by the Selling Stockholder)./3/
A
- --------------------------------------------------------------------------------
/3/ The following is based on Centaur, Engles and Bookshester having original
holdings of 600,000, 200,000 and 100,000 Shares, respectively. Assume, for the
purpose of this example, that Centaur, Engles and Bookshester increase their
holdings to 700,000, 250,000 and 150,000 Shares, respectively. The following
will illustrate how the come along rights would take effect:
A. If Centaur desires to sell 400,000 Shares to a third party, and neither
the Corporation nor any of the Remaining Stockholders exercise rights of first
refusal, then Engles and Bookshester may each require the purchaser to purchase
100,000 of their Shares.
B. If Centaur desires to sell 600,000 Shares to a third party and Engles
exercises a right of first refusal to purchase 100,000 of such Shares, Engles
may not exercise come along rights, and Bookshester may require the purchaser of
Centaur's shares to purchase up to 150,000 of his Shares.
C. If Engles and Bookshester together sell all of their Shares to a third
party and neither the Corporation nor any other Stockholder exercises a right of
first refusal, Centaur may require the purchaser to also purchase up to 150,000
of its Shares (100,000 Shares based on Engles' sale and 50,000 Shares based on
Bookshester's sale).
D. If Centaur sells 200,000 of its Shares in a single initial transaction,
Engles and Bookshester will not have a come along right. However, if Centaur
subsequently sells another 200,000 Shares, and neither the Corporation nor the
remaining Stockholders exercise rights of first refusal, then Engles and
Bookshester may each require the Purchaser to purchase 100,000 of their Shares
(Based on the first fifty percent of Centaur's Shares (300,000 Shares) being
exempt from come along rights).
E. If Centaur desires to sell all 700,000 of its shares and neither the
Corporation nor any of the Remaining Stockholder exercise rights of first
refusal, then Engles and Bookshester may each sell all of their holdings (based
upon Centaur's sale of fifty percent of its original holdings (300,000 shares).
19
<PAGE>
Participant may exercise this right by delivery of written notice of its
exercise of the right to the Selling Stockholder(s), the other Participants and
the Corporation no later than forty-five (45) days after his/its receipt of the
Notice of Bona Fide Offer. The Selling Stockholder(s) may not proceed with
his/its proposed sale unless the purchaser is willing to also purchase the
Shares of Stockholders who exercise their come along right. All share amounts
set forth in this Section 8 shall be adjusted to take into account stock splits,
reverse stock splits and the issuance of stock dividends.
9. Governance of the Corporation.
-----------------------------
(a) Directors. The Board of Directors of the Corporation upon the
---------
execution of this Agreement shall be composed of three members, being Brian D.
Frenzel, as the designee of Centaur, Engles and Bookshester. Centaur, Engles
and Bookshester agree that so long as they are Stockholders, they will vote all
of their Shares, in person or by proxy, for the election of a designee of each
of Centaur, Engles and Bookshester to the Board of Directors; provided, however,
that (i) upon the termination of Engles' Employment Agreement with the
Corporation, Centaur and Bookshester will no longer be required to vote for
Engles' designee and (ii) upon the termination of Bookshester's Consulting
Agreement with the Corporation, Centaur and Engles will no longer be required to
vote for Bookshester's designee.
(b) Required Vote. Each Stockholder will vote their shares in favor
-------------
of the adoption of Restated and Amended By-Laws containing the following
provisions. All actions of the Board of Directors shall require the affirmative
vote of a majority of directors, except
20
<PAGE>
that (i) the unanimous vote of the disinterested Directors will be necessary to
approve, modify or terminate any contract between the Corporation and an
officer, director, stockholder, or Affiliate of the Corporation, or any
Affiliate of any officer, director or stockholder of the Corporation and (ii)
the following actions shall require the affirmative approval of at least seventy
five percent (75%) of the Board:
(a) Changing the size of the Board of Directors;
(b) Appointing new Directors;
(c) Approving the sale of the Corporation or the sale of
substantially all of its assets;
(d) Approving an Amendment of the Corporation's Certificate of
Incorporation or Bylaws;
(e) Approving the annual business plan and budget of the
Corporation;
(f) Establishing or acquiring any subsidiary or ownership
interest in any entity;
(g) Changing the legal structure, principal office or the name of
the Corporation;
(h) Declaring bankruptcy or dissolving or liquidating the
Corporation;
(i) Guaranteeing the obligations of any other person or entity;
(j) Approving the selection of auditors of the Corporation;
(k) Granting licenses of and entering into other transactions
involving the Company's technology;
(l) Declaring dividends; and
(m) The creation of any committee of the Board of Directors.
21
<PAGE>
In addition to the foregoing, the Stockholders agree to vote in favor of
authorizing an increase in the Corporation's authorized capitalization if
necessary for the Corporation to meet any contractual obligation.
(c) Duration of Voting Agreement. Notwithstanding anything to the
----------------------------
contrary set forth herein, all provision of this Agreement setting forth
agreements regarding the voting of Shares shall expire ten years from the date
hereof, unless renewed in accordance with the laws of the State of California.
10. Legend. Restrictive legends in the following form shall be endorsed
------
on all share certificates issued or to be reissued by the Corporation:
"The sale, assignment, transfer, pledge, encumbrance or other
disposition of the shares evidenced by this certificate is subject to
a Stockholders' Agreement dated as of January 15, 1998 (a copy of
which is on file at the office of the Corporation) and any sale,
assignment, transfer, pledge, encumbrance or other disposition of
these shares in breach of the Stockholders' Agreement shall be void
and of no effect."
"The securities evidenced by this certificate have not been registered
under the Securities Act of 1933, as amended, or any State securities
laws and may not be transferred unless they are so registered or an
exemption to registration is available."
11. Investment Only. Each of the Stockholders acknowledges and agrees and
---------------
any person or entity who may acquire any of the Shares under the terms hereof
acknowledges and agrees that he or she acquired the Shares for investment and
without a view to a public distribution thereof, that any transfer or sale of
the Corporation's stock shall be subject to the Securities Act of 1933,
22
<PAGE>
as amended, and that the Corporation may require, as a condition of such sale or
transfer, an opinion of counsel, in form and content satisfactory to counsel to
the Corporation, that such sale or transfer is not in violation of the
Securities Act of 1933, as amended, the Rules and Regulations promulgated
thereunder or any State's securities laws.
12. Other Securities Covered. The parties understand that the Corporation
------------------------
may issue other securities of many kinds (including, perhaps, by way of example
and not limitation, additional common stock) to the Stockholders. The
Stockholders agree that each and every one of those securities will be subject
to this Agreement and shall bear the appropriate legend referred to above in
this Agreement.
13. Equitable Relief. The parties acknowledge that in the event of a
----------------
breach of this Agreement, damages may be difficult or impossible to ascertain
and the non-breaching parties could be irreparably damaged. Accordingly, in
addition to any other remedy to which a party may be entitled at law, the non-
breaching party or parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and/or to compel specific performance of this
Agreement in any action instituted in any Court having jurisdiction. In the
event the non-breaching party or parties seek to enforce its or their rights,
the other party agrees not to interpose as a defense that the non-breaching
party or parties have an adequate remedy at law.
23
<PAGE>
14. Notices. Any notice required or permitted hereunder shall be in
-------
writing, sent by registered or certified mail, postage prepaid, or recognized
overnight courier for which a receipt is given, as follows:
(i) if to any Stockholder, to the address indicated on Exhibit A
hereto, or to such other address as the Stockholder shall designate by written
notice to the other parties to this Agreement; and
(ii) if to the Corporation, to:
Cutanix Corporation
484 Oakmead Parkway
Sunnyvale, California 94086
Attention: President
A copy of any notice sent hereunder shall also be sent to:
Ira S. Nordlicht, Esq.
Nordlicht & Hand
645 Fifth Avenue
New York, New York 10022
Any party may change the address to which notice to him or her is to
be given by notice as herein provided.
15. Entire Understanding. This Agreement (together with the Stock
--------------------
Purchase Agreements, the Employment Agreement and the Consulting Agreement)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, executors, administrators,
24
<PAGE>
legal representatives, successors and assigns. This Agreement cannot be modified
or terminated except by an agreement in writing signed by the Corporation,
Centaur, Engles and Bookshester.
16. Non-Transferable and Non-Assignable. Except as otherwise provided
-----------------------------------
herein, neither this Agreement nor any of the rights of the parties hereunder
may be assigned, transferred or pledged by any Stockholder or the Corporation
(except to a successor corporation) without the prior written consent of all the
parties hereto and any attempt to do so will be void.
17. Severability. Should any part of this Agreement be held unenforceable
------------
or in conflict with the applicable laws or regulations of any applicable
jurisdiction, the invalid or unenforceable part or provision shall be replaced
with a provision which accomplishes, to the extent possible, the original
business purpose of the invalid or unenforceable part or provision in a valid
and enforceable manner, and the remainder of this Agreement shall remain binding
upon the parties hereof.
18. Captions. The captions and article headings employed in this
--------
Agreement are intended solely for the convenience of the parties and shall in no
way affect or influence the meaning or interpretation of any of the provisions
hereof.
25
<PAGE>
19. Dispute Resolution.
------------------
(a) Good Faith Negotiations. In the event that any controversy or
-----------------------
claim shall arise under, out of, in connection with, or relating to this
Agreement or the breach thereof, other than disputes regarding the valuation of
the Shares, which are subject to Section 5, above, the party initiating such
controversy or making such claim shall provide to the other party a written
notice containing a brief and concise statement of the initiating party's
claims, together with relevant facts supporting them. During a period of sixty
(60) days, or such longer period as may be mutually agreed upon in writing by
the parties, following the date of said notice, the parties shall make good
faith efforts to settle the dispute. Such efforts will include, but shall not
be limited to, full presentation of both parties' claims and responses, with or
without the assistance of counsel.
(b) Arbitration. In the event that the parties have been unable to
-----------
reach accord using the procedures set forth in Section 19(a) and only if such is
the case, either party may initiate arbitration proceedings, subject to a
party's right to seek injunctive relief as provided for in Section 13 hereof.
Failure to comply with the provisions of Section 19(a) with respect to any
controversy or claim shall constitute an absolute bar to the institution of any
arbitration proceedings with respect to such controversy or claim.
(c) Rules of the Arbitration. Subject to the provisions of Sections
------------------------
19(a) and 19(b), any controversy or claim which may arise under, out of, in
connection with, or relating to this Agreement or the breach thereof shall be
settled by final and binding arbitration in Santa
26
<PAGE>
Clara County, California, in accordance with the then existing rules of the
American Arbitration Association and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. The parties
hereto agree that the service of any notice in the course of such arbitration at
the respective addresses provided for in Section 14 hereof shall be valid and
binding.
(d) Arbitrators. In any arbitration proceeding hereunder, unless the
-----------
parties agree in writing otherwise, the parties shall designate one arbitrator.
If the parties are unable to agree on a single arbitrator, there shall be three
(3) arbitrators to be selected in accordance with the then existing rules of
appointment of the American Arbitration Association (the "AAA"), with each party
designating one arbitrator and the two so designated jointly appointing a third
arbitrator. If there are more than two parties involved in the dispute and they
cannot agree upon a single arbitrator, then the arbitration will be held before
a panel of three arbitrators selected by the AAA. The arbitrators will render a
decision within six months of the date when the third arbitrator is appointed,
except in the extraordinary situation where rendering such decision within six
months would deprive any party of procedural due process. The decision of a
majority of the arbitrators shall be final and binding on the parties, each
arbitrator having one (1) vote.
(e) Finality of Arbitration. The intent of the parties is that,
-----------------------
except for the entering of an arbitration order in a court of competent
jurisdiction, disputes will be resolved finally in arbitration as provided
above, without appeal, and without recourse to litigation in the courts.
27
<PAGE>
20. Termination. This Agreement shall automatically terminate and be of
-----------
no further force and effect upon the consummation of an initial public offering
of the Corporation's securities.
21. New Stockholders. Any person or entity who is issued securities by
----------------
the Corporation shall become party to this Agreement by executing an agreement
with the Corporation pursuant to which such new securities holder agrees to
abide by the terms of this Agreement and to be treated as a Stockholder for all
reasons hereunder (other than the right to designate a Director). The Shares of
any new Stockholder will be subject to such vesting and forfeiture provisions as
the Board may determine.
22. Governing Law. This Agreement shall be governed by the law of the
-------------
State of California governing contracts made in and to be performed solely in
such State.
28
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the day and year first above written.
CUTANIX CORPORATION
By: /s/ Charles R. Engles
-----------------------------------------
Name: Charles R. Engles
Title: President and Chief Executive Officer
CENTAUR PHARMACEUTICALS, INC.
By: /s/ Brian D. Frenzel
-----------------------------------------
Name: Brian D. Frenzel
Title: President and Chief Executive Officer
/s/ Charles R. Engles
---------------------------------------------
Charles R. Engles
/s/ Dennis S. Bookshester
---------------------------------------------
Dennis S. Bookshester
29
<PAGE>
[NOTARY OMITTED]
30
<PAGE>
[NOTARY OMITTED]
31
<PAGE>
EXHIBIT A
STOCKHOLDERS
===============================================================================
NAME ADDRESS
- -------------------------------------------------------------------------------
Centaur Pharmaceuticals, Inc. 484 Oakmead Parkway
Sunnyvale, CA 94086
- -------------------------------------------------------------------------------
Charles R. Engles 5 Wintercreek
Portola Valley, CA 94028
- -------------------------------------------------------------------------------
Dennis S. Bookshester 1325 North Astor Street
Chicago, IL 60610
- -------------------------------------------------------------------------------
32
<PAGE>
EXHIBIT B
IRREVOCABLE PROXY
The undersigned hereby irrevocably appoints Brian D. Frenzel, as the
designee of the Board of Directors of Cutanix Corporation ("Cutanix"), or any
successor designee appointed by the Board of Directors, as the undersigned's
proxy to vote on all matters which come before the stockholders of Cutanix,
200,000 shares of common stock of Cutanix, constituting the undersigned's
original holdings in Cutanix, or such greater or lesser number of securities as
such securities may be converted into; provided, however, that this Irrevocable
Proxy shall not take effect unless the undersigned fails to complete four full
years of service to the Corporation under the Employment Agreement between
Cutanix and the undersigned dated as of November 1, 1997. Furthermore, if the
undersigned does complete four full years of service to Cutanix under such
Employment Agreement, this Irrevocable Proxy shall become null and void. This
Irrevocable Proxy is delivered pursuant to that certain Stockholders' Agreement
among Cutanix and certain stockholders of Cutanix dated as of January 15, 1998
and will expire upon the termination of such Stockholders' Agreement or upon
Change in Control of Cutanix (as defined in the Stockholders' Agreement) .
Dated: January 19, 1998 /s/ Charles R. Engles
----------------------------
Charles R. Engles
[NOTARY OMITTED]
33
<PAGE>
IRREVOCABLE PROXY
The undersigned hereby irrevocably appoints Brian D. Frenzel, as the
designee of the Board of Directors of Cutanix Corporation ("Cutanix"), or any
successor designee appointed by the Board of Directors, as the undersigned's
proxy to vote on all matters which come before the stockholders of Cutanix,
100,000 shares of common stock of Cutanix, constituting the undersigned's
original holdings in Cutanix or such greater or lesser number of securities as
such securities may be converted into; provided, however, that this Irrevocable
Proxy shall not take effect unless the undersigned fails to complete four full
years of service to the Corporation under the Consulting Agreement between
Cutanix and the undersigned dated as of January 15, 1998. Furthermore, if the
undersigned does complete four full years of service to Cutanix under such
Consulting Agreement, this Irrevocable Proxy shall become null and void. This
Irrevocable Proxy is delivered pursuant to that certain Stockholders' Agreement
among Cutanix and certain stockholders of Cutanix dated as of January 15, 1998
and will expire upon the termination of such Stockholders' Agreement or upon
Change in Control of Cutanix (as defined in the Stockholders' Agreement).
Dated: January 20, 1998 /s/ Dennis S. Bookshester
-------------------------------
Dennis S. Bookshester
[NOTARY OMITTED]
34
<PAGE>
EXHIBIT C
FORM OF PROMISSORY NOTE
$[Estimated Balance Due]
(subject to adjustment)
[Location]
[Date]
FOR VALUE RECEIVED, the undersigned (the "Maker" or "___") hereby
promises to pay, in two equal amounts on each of the two anniversaries of the
above date to the order of [Name of Selling Stockholder] ("Name" or "you"),
[Address of Payee], the principal sum of [Amount] ($Amount), to be adjusted
according to the terms of the Stockholders Agreement dated as of January 15,
l998 between the Maker and you (the "Stockholders Agreement"), with interest
thereon at the rate of [Prime Rate at Time of Closing] (____%) per annum).
All payments of principal and interest are to be made in lawful money of the
United States of America at the address of ____________ (Name) as set forth
above, or such other places as you shall designate to [Maker] in writing.
The principal sum of this Note may be paid by [Maker] at any time or times
prior to the date it is due, in whole or in part, without premium or penalty.
This Note shall bind [Maker] and its successors and assigns and shall be
governed by the law of the State of California without reference to its conflict
of laws provisions.
[Maker]
BY: ______________________
Notary:
35
<PAGE>
EXHIBIT 10.21
LICENSE AGREEMENT
-----------------
This Agreement is made and entered into as of the 1/st/ day of January, 1998, by
and among the OKLAHOMA MEDICAL RESEARCH FOUNDATION, an Oklahoma nonprofit
corporation ("OMRF"), 825 N.E. 13th Street, Oklahoma City, Oklahoma 73104
----
("Licensor"); and CENTAUR PHARMACEUTICALS, INC., a Delaware corporation
- ----------
("Licensee"), having an office at 484 Oakmead Parkway, Sunnyvale, California
- ----------
94086 (collectively the "Parties").
-------
RECITALS
A. Licensor owns rights in and to technology relating to compositions of
and methods for using spin trap nitronyl hindered phenols developed or
investigated by Drs. Edward G. Janzen, Allan L. Wilcox and Randall D. Hinton. of
OMRF, including the Licensed Technology further described and defined below.
B. Licensee desires to obtain the right to utilize Licensed Technology in
order to make, have made, use and sell Licensed Products (as defined below).
NOW, THEREFORE, for and in consideration of the foregoing and the mutual
covenants and agreements contained herein, the parties agree as follows:
1. DEFINITIONS
-----------
As used herein:
1.1 "LICENSED PATENTS" means:
----------------
(a) United States Patent No. 5,455,272, titled "Spin Trap Nitronyl
Hindered Phenols", issued October 3, 1995; and
(b) United States Patent No. 5,527,828, titled "Method of Preventing
Lipid Peroxidation with Spin Trap Nitronyl Hindered Phenols", issued
June 18, 1996; and
(c) United States Patent No. 5,532,277, titled " Spin Trap Nitronyl
Hindered Phenols", issued July 2, 1996; and
(d) All patent applications and continuations-in-part presently
contemplated by OMRF relating to compositions of and methods for using
spin trap nitronyl hindered phenols as evidenced by documented
communications between Drs. Janzen, Wilcox and/or Hinton and Sidley &
Austin, patent counsel for OMRF;
- ---------------------
[*] -- Confidential treatment is being sought with respect to this portion of
this agreement. This portion has been omitted from this filing and has
been filed separately with the Securities and Exchange Commission.
<PAGE>
(e) Such other patents and patent applications as the Parties may add
to this Agreement from time to time by the execution of a suitable
written agreement;
and all divisionals, continuations, reexaminations, reissues, extensions and
foreign counterparts of these applications and patents and all patents and
comparable rights that issue thereon.
1.2 "LICENSED TECHNOLOGY" means the Licensed Patents and all designs,
-------------------
technical information, know-how, knowledge, data, specifications, test results
and other information (including but not limited to designs, technical
information, know-how, knowledge, data, specifications, test results and other
information previously disclosed to Licensee) relating to the subject matter of
the Licensed Patents known to Licensor on the date of this Agreement.
1.3 "LICENSED PROCESS" means any process which is covered in whole or in
----------------
part by an issued, unexpired claim or a pending claim contained in the Licensed
Patents in the country in which the process is practiced.
1.4 "LICENSED PRODUCTS" means any product or part of a product which:
-----------------
(a) is covered in whole or in part by an issued, unexpired claim or a
pending claim contained in the Licensed Patents in the country in
which the product or part of a product is made, used or sold,
(b) is manufactured using a Licensed Process, or
(c) is used in a Licensed Process and has no substantial use except in
a Licensed Process.
1.5 "LICENSED TERRITORY" means the entire world.
------------------
1.6 "SALE"/"SOLD" means the sale, transfer, exchange or other disposition
-----------
of Licensed Products excluding (a) transfers of Licensed Products by Licensee
---------
to its Affiliates; (b) transfers of Licensed Products for which Licensee
receives no more than nominal payment in connection with clinical testing in
support of efforts to obtain regulatory approvals to sell Licensed Products in
the Licensed Territory; and (c) all distribution of Licensed Products for
promotional purposes for which Licensee receives no more than nominal payment.
Sales of Licensed Products shall be deemed consummated upon the later of
recognition of revenue or receipt of payment, by Licensee or its Sublicensees,
as the case may be, for such Sales of Licensed Products from the purchaser.
1.7 "NET SELLING PRICE" of Licensed Products means the actual cash receipts
-----------------
of Licensee or its Sublicensees and, if applicable, the value of all properties
and services received in consideration of a Sale (as defined above) of Licensed
Products, less only:
(a) customary trade, quantity, or cash discounts actually allowed and
taken;
-2-
<PAGE>
(b) any freight or other transportation costs, insurance charges,
import/export duties, tariffs or other excise taxes separately
invoiced to and paid or reimbursed by the purchaser;
(c) returns which are accepted by Licensee or its Sublicensees from
unrelated purchasers in accordance with their normal practice and for
which Licensee or its Sublicensees give credit to such purchasers; and
(d) sales or use taxes which Licensee or its Sublicensees are under a
legal obligation to pay;
provided, however, that where a Sale (as defined above) is deemed consummated by
- -----------------
the transfer or other disposition of Licensed Products for other than a selling
price stated in cash, the term "Net Selling Price" shall mean the average Net
Selling Price billed by Licensee or its Sublicensee, as the case may be, in
consideration of the Sale of comparable Licensed Products during the three (3)
month period immediately preceding such Sale, without reduction of any kind.
With respect to a Licensed Product that is a Combination Product, "Net Selling
Price" shall mean the "Adjusted Gross Sales" (as defined below) of such
Combination Product less the allowances and adjustments listed in items (a)
through (d) above. "Adjusted Gross Sales" of Combination Products shall mean
the gross sales multiplied by a fraction, A/(A + B), where "A" shall be the
average per unit price of the Licensed Product as sold alone in that country and
"B" shall be the average per unit selling price in the country of each
pharmaceutically active ingredient in the Combination Product other than the
Licensed Product. If B is available in the country, the least expensive
presentation shall be used as reference for the calculation. The fraction,
A/(A+B), shall never be less than one-half (1/2). If sufficient information is
not available to make this calculation, then Licensor and Licensee shall
mutually agree on a surrogate measurement.
1.8 "LICENSEE'S AUDITORS" means the independent certified or chartered
-------------------
accountants regularly employed by Licensee to audit its accounts and certify its
financial statements.
1.9 "PROPRIETY INFORMATION" is defined in paragraph 9.1 of this Agreement.
---------------------
1.10 "REQUIRED CONSENTS" is defined in paragraph 13.3 of this Agreement.
-----------------
1.11 "AGREEMENT" means this Agreement including all Exhibits (if any)
---------
attached to this Agreement together with any written amendments of any of the
foregoing.
1.12 "AFFILIATE" means any person, corporation or business entity that owns
---------
or controls Licensee, is under common control with Licensee or which is owned or
controlled by Licensee through ownership of a majority interest, directly or
indirectly, of the outstanding stock eligible to vote for the Board of Directors
or other similar governing body of the entity.
-3-
<PAGE>
1.13 "COMBINATION PRODUCT" shall mean any finished pharmaceutical product
-------------------
containing a Licensed Product as an active ingredient in combination with one or
more other active ingredients.
1.14 "FDA" means the U.S. Food and Drug Administration.
---
1.15 "NDA" means a New Drug Application or its equivalent under then
---
applicable FDA regulations for the marketing of a human pharmaceutical Licensed
Product.
1.16 "SUBLICENSEES" is defined in paragraph 2.3 of this Agreement.
------------
2. GRANT OF LICENSEE
-----------------
2.1 LICENSE. Subject to the license retained by Licensor in paragraph 2.2
-------
below and the other terms of this Agreement, Licensor hereby grants to Licensee
the exclusive right and license to use the Licensed Technology to make, have
made, use, lease and sell Licensed Products and to practice the Licensed
Processes in the Licensed Territory during the term of this Agreement unless
sooner terminated as provided in this Agreement.
2.2 RETAINED LICENSE. Licensor retains the perpetual, royalty-free right
----------------
and license to practice the Licensed Technology solely for research and
educational purposes.
2.3 SUBLICENSES. Licensee shall have the right to sublicense the rights
-----------
granted hereunder to third parties as well as to Affiliates of Licensee
(hereinafter collectively referred to as "Sublicensees"), provided that Licensee
------------ -------------
promptly notifies Licensor of each such sublicense. Any such sublicense will
survive termination of this Agreement only if Licensors approve the identity of
the Sublicensee in writing, either before or after Licensee's grant of the
sublicense. Licensee may request Licensors' approval of a Sublicensee at any
time, and Licensors will not unreasonably withhold or delay such approval.
2.4 SUBLICENSEE OBLIGATIONS. All Sublicenses granted by Licensee shall
-----------------------
provide that the obligations to Licensor of Licensee under sections 5, 9, 11 and
12 of this Agreement shall be binding upon Sublicensee as if it were a party to
this Agreement.
2.5 SUBLICENSEE COPIES AND REPORTS. Licensee shall provide to Licensor
------------------------------
(1) a copy of all sublicense agreements promptly after execution, and (2)
annually, copies of all reports received by Licensee from its Sublicensees
during the preceding twelve (12) month period.
2.6 NONCASH CONSIDERATION. If Licensee receives from Sublicensees
---------------------
anything of value in lieu of cash payments in satisfaction of payment of
obligations under the sublicense and this Agreement, then Licensee shall
determine the cash value of such consideration in good faith and shall pay
Licensor based on such cash value as set forth in Section 4.
-4-
<PAGE>
2.7 NO IMPLIED LICENSE. The license and right granted in this Agreement
------------------
shall not be construed to confer any rights upon Licensee by implication,
estoppel or otherwise as to any technology not specifically identified in this
Agreement as "Licensed Technology," nor shall it be construed to confer any
rights outside the Licensed Territory.
2.8 FIRST RIGHT OF NEGOTIATION. Licensee shall have the first right to
--------------------------
negotiate with Licensor to obtain a license to practice any patent Licensor may
acquire after the date of this Agreement that is dominated by one or more
patents included in the Licensed Patents on such terms and conditions that
Licensor and Licensee may agree through negotiations in good faith. If Licensee
declines to exercise its right to negotiate or the parties have not entered into
a License within six (6) months after Licensor notifies Licensee of the
existence of a patent subject to this paragraph, Licensor may negotiate with and
grant a License or other rights in such patent to others on terms substantially
no more favorable to such other party than were last offered by Licensor to
Licensee.
3. DUE DILIGENCE
-------------
3.1 DILIGENCE. Licensee shall use its reasonable efforts throughout the
----------
term of this Agreement to bring one or more Licensed Products to market through
a program for exploiting the right and license granted in this Agreement and for
creating, supplying and servicing a market for Licensed Products in the Licensed
Territory.
4. ROYALTIES, PAYMENTS, STOCK AND REIMBURSEMENT
--------------------------------------------
4.1 AMOUNTS OF PAYMENTS. In partial consideration of the right and license
--------------------
granted in the Agreement, Licensee shall pay to Licensor:
(a) upon execution of this Agreement, a License Initiation Fee in the
amount of [*] which includes reimbursement of expenses incurred
by Licensor through October 1, 1997, in preparing, filing, prosecuting
and maintaining the Licensed Patents; plus
(b) an annual minimum royalty of $10,000, payable on each anniversary
date of this Agreement for any year in which earned royalties as
defined in Section 4.1(c) are not paid, provided that [*] of such
annual minimum royalty payments shall be cumulatively creditable
against the earned royalties specified in Section 4.1(c), such credit
to be taken by reducing the earned royalty rate of Section 4.1(c) by
not more than [*] (that is, to an effective rate of not less than
[*])plus
(c) an earned royalty equal to [*] of the Net Selling Price of
Licensed Products Sold by or for Licensee and its Sublicensees; plus
-5-
<PAGE>
(d) a milestone payment of [*] for the first filing of an
Investigational New Drug (IND) application with the United States Food
and Drug Administration or a foreign equivalent thereof; plus
(e) a milestone payment of [*] for the first acceptance of a New Drug
Application (NDA) by the United States Food and Drug Administration or
a foreign equivalent thereof;
provided that only one of each milestone payment specified in Sections 4.1(d)
and 4.1(e) will be paid on any compound within the Licensed Products regardless
of how many countries or for how many different disease indications such IND and
NDA applications are filed.
4.2 NON-CUMULATIVE ROYALTIES. Royalties shall be payable by Licensee with
------------------------
respect to all of its or its Sublicensees' Licensees' resale of any products
purchased. Royalties shall not become payable at the time of transfer from
Licensee to its Sublicensees, but shall become payable only when Licensee
receives payment of royalties (after recovery of any prepaid royalties included
in any Sublicense Initiation Fee) from its Sublicensee with respect to such
Sublicensee's Sales.
4.3 NO MULTIPLE ROYALTIES. No multiple royalties shall be payable because
---------------------
any Licensed Product is covered by more than one patent within the Licensed
Patents.
4.4 DEDUCTION OF TAXES. Any income or other tax which Licensee is
------------------
required to withhold and pay on behalf of Licensor with respect to the royalties
payable to Licensor under this Agreement shall be deducted from such royalties
prior to remittance to Licensor; provided, however, that in regard to any tax so
-----------------
deducted, Licensee shall give Licensor such assistance as may reasonably be
necessary to enable Licensor to claim exemption therefrom. In each case
Licensee shall furnish Licensor with proper evidence of the taxes so paid on its
behalf.
4.5 INTEREST. Royalty and other payments required in this Agreement
--------
shall, if overdue, bear interest until payment at a per annum rate of two
percent (2%) above the prime rate in effect at the Chase Manhattan Bank, N.A.,
New York, New York, U.S.A., on the due date, but not more than the highest rate
permitted by law. The payment of such interest shall not foreclose Licensor
from exercising any other rights they may have because any payment is late.
4.6 CURRENCY CONVERSION AND DELIVERY. All payments required in this
--------------------------------
Agreement shall be paid in United States dollars, delivered in accordance with
paragraphs 6.2 and 13.9 of this Agreement or to such other place as Licensor may
reasonably designate consistent with the applicable laws and regulations in any
foreign country. If any currency conversion shall be required in connection
with the payment of royalties hereunder, such conversion shall be at the rate in
effect at the Chase Manhattan Bank, New York, New York, U.S.A., on the last
business day of the calendar quarterly reporting period to which such payment(s)
relate.
5. RECORDS
-------
-6-
<PAGE>
5.1 RECORDS OF SALES. Licensee shall at all times during the term of this
----------------
Agreement and for a period of three (3) years after termination of this
Agreement keep at its principal place of business true and accurate records of
all Sales subject to Section 4 of this Agreement in such form and manner that
all royalties owed hereunder to Licensor may be readily and accurately
determined. Such records shall be kept for a period of at least three (3) years
after the and of the royalty period to which they pertain and shall include, but
not by way of limitation, all information necessary for Licensee's Auditors to
prepare the reports required by Section 6 of this Agreement.
5.2 INSPECTION. Licensor shall have the right, from time to time, at
----------
reasonable times during normal business hours no later than three (3) years
after expiration or termination of this Agreement and at Licensor's expense, to
examine the records of Licensee through an independent certified public
accountant for the purpose of verifying the amounts owed to Licensor hereunder
and the accuracy of the reports furnished by Licensee under Section 6 of this
Agreement. Licensor and their accountant shall maintain the confidentiality of
all confidential information obtained from examination of Licensee's records and
shall use such information only for the purposes of this Agreement.
6 REPORTS.
-------
6.1 QUARTERLY REPORTS. Licensee shall prepare and deliver to Licensor
-----------------
within sixty (60) days after March 31, June 30, September 30 and December 31 of
each year during the term of this Agreement a true and accurate report, giving
such particulars of the business conducted by Licensee and its sublicensees
during the preceding three (3) month period as is required to calculate the
royalties due Licensor hereunder. Such report shall include at least the
following:
(a) the total Net Selling Price of all Licensed Products Sold by
Licensee and its Sublicensees during the preceding three (3) month
period and for the calendar year to date;
(b) all Sublicense Initiation Fees received from Sublicensees during
the preceding three (3) month period and for the calendar year to
date; and
(c) the names and address of all new Sublicensees of Licensee since
the previous report.
6.2 PAYMENTS. With each such report delivered, Licensee shall pay to
--------
Licensor all amounts due under this Agreement. If no payments are due, Licensee
shall so report.
6.3 AUDIT REPORT. Within one hundred fifty (150) days after the end of
------------
each whole or partial fiscal year of Licensee in which Licensed Products are
Sold during the term of this Agreement, Licensee shall have its books and
records audited by Licensee's Auditors and shall direct them to prepare and
submit to Licensor certified financial statements for the preceding fiscal year
including, at a minimum, a balance sheet together with an operating statement
-7-
<PAGE>
together with an audit report thereon. Appropriate disclosure will be made in
the footnotes to Licensee's audited financial statements of (i) the total Sales
of Licensed Products by Licensee and its Sublicensees during the past year and
(ii) the amounts owed to Licensor in total at the year end balance sheet date.
If such disclosure is not made in the footnotes to Licensee's audited financial
statements, then Licensee's Auditors shall prepare a special report covering
items (i) and (ii) above and submit it to Licensor.
7. PATENT PROSECUTION
------------------
7.1 Licensor shall apply for, seek prompt issuance of, and maintain during
the term of this Agreement the patents, patent applications and foreign
counterparts, as the case may be, included within the Licensed Patents that are
(a) specifically identified by patent number or application serial number in
paragraph 1.1 of this Agreement, or (b) timely identified or specified by
Licensee by notice to Licensor. Except as provided in Section 7.4, the
prosecution and maintenance of all patent applications, foreign counterparts and
patents within the Licensed Patents shall be the primary responsibility of
Licensor; provided, however, that Licensee shall be afforded reasonable
--------- -------
opportunities to advise Licensor and shall cooperate with Licensor in such
prosecution and maintenance.
7.2 Except as provided in Section 7.4, Licensee shall reimburse Licensor
for all reasonable out-of-pocket fees, costs and expenses reasonably paid or
incurred by Licensor in filing, prosecuting and maintaining the Licensed Patents
during the term of this Agreement. Licensee shall deliver such reimbursement to
Licensor (or, if Licensor requests, directly to Licensor's patent counsel)
within thirty (30) days after Licensor (or Licensor's patent counsel) notify
Licensee from time to time of the amount of such fees, costs and expenses which
have been paid or incurred by Licensor.
7.3 Licensor shall promptly advise Licensee of the grant, lapse,
revocation, surrender, any threatened invalidation of or of their intention to
abandon any such patent, application or foreign counterpart. If Licensor
advises Licensee of its intention not to pursue a patent on any Licensed
Technology or to abandon any such patent, application or foreign counterpart,
Licensee shall have the right, at its own expense, to pursue such patent,
application or foreign counterpart, and all rights resulting therefrom shall
vest in Licensee alone.
7.4 Licensee shall designate each country, if any, in which Licensee
desires that patent application(s) corresponding to the Licensed Patents be
filed. Licensee shall pay all costs and legal fees associated with the
preparation and filing of such designated foreign patent applications, and such
applications shall be in Licensor's name. Licensor may elect to file
corresponding patent applications in countries other than those designated by
Licensee, but in that event Licensor shall be responsible for all costs
associated with such non-designated filings. Licensor will notify Licensee that
it intends to make such filings. Licensee will then have thirty (30) days to
decide to pay for such filings and prosecutions. If it does not decide to pay
for such applications within the 30-day period, neither of such applications nor
any patents that issue thereon shall be considered to be Licensed Patents, and
Licensee shall forfeit its rights under this
-8-
<PAGE>
Agreement with respect to such applications and patents unless it can
demonstrate that filing patent applications in such countries is not
commercially feasible for the Licensed Product(s).
8. PATENT INFRINGEMENT
-------------------
8.1 NOTICE OF INFRINGEMENT. The Parties shall promptly notify each other
----------------------
of any alleged infringement of the Licensed Patents and of any available
evidence of such infringement.
8.2 SUIT BY LICENSEE. Licensee shall have the right, but shall not be
----------------
obligated, to commence suit for any infringement of the Licensed Patents, and
Licensor agrees that Licensee may cause Licensor to join it as a party to any
such suit at no expense to Licensor. The total cost of any such infringement
action commenced or defended solely by Licensee shall be borne by Licensee, and
Licensee shall retain any recovery or damages awarded in such action, but such
recovery or damages shall be treated as Sales of Licensed Products, and Licensee
shall pay royalties thereon to Licensor in accordance with paragraph 4.1(b) of
this Agreement. No settlement, consent judgment or other voluntary final
disposition of the suit may be entered into without the written consent of
Licensor, which consent shall not be unreasonably withheld. Licensee shall
indemnify Licensor against any order for costs or award of sanctions that may be
made or entered against Licensor in such proceedings.
8.3 SUIT BY LICENSOR. If within six (6) months after notice by Licensee
----------------
to Licensor, or by Licensor to Licensee, of any alleged infringement, Licensee
has been unsuccessful in persuading the alleged infringer to desist and has not
brought an infringement action, or if Licensee notifies Licensor at any time of
its intention not to bring suit against an alleged infringer, then and only
then, Licensor shall have the right, but shall not be obligated, to commence
suit for such infringement at Licensor's sole expense, and Licensor may, in such
suit, use the name of Licensee as a nominal party. No settlement, consent
judgment or other voluntary final disposition of the suit may be entered into
without the written consent of Licensee, which consent shall not be unreasonably
withheld. Licensee shall not be responsible for any order for costs or award of
sanctions that may be made or entered against Licensee in such proceedings.
8.4 DEFENSE. In the event that a declaratory judgment action alleging
-------
invalidity, unenforceability or noninfringement of any of the Licensed Patents
shall be brought against Licensee, Licensor or either of them, Licensee shall
have the first right to defend such action; provided, however, that if Licensee
-----------------
determines at any time that it does not desire to defend such action, it shall
promptly so advise Licensor, and Licensor shall then have the right to defend
such action at Licensor's sole expense. Licensee shall not be responsible for
any order for costs or award of sanctions that may be made or entered against
Licensee in such proceedings.
8.5 COOPERATION. In any suit either party may commence or defend pursuant
-----------
to its rights under this Agreement in order to enforce or defend the validity or
enforceability of the Licensed Patents, the other party shall, at the reasonable
request and expense of the party initiating or defending such suit, reasonably
cooperate in all respects and, to the extent possible,
-9-
<PAGE>
have its employees testify when requested and make available relevant records,
papers, information, samples, specimens and the like.
9. CONFIDENTIALITY
---------------
9.1 MAINTENANCE OF CONFIDENTIALITY. No party shall, without the express
------------------------------
written consent of the other parties to this Agreement in advance, for any
reason or at any time either during or for a period of three (3) years
subsequent to the term of this Agreement except as otherwise provided in this
paragraph, use (except in the course of practicing the licenses granted in this
Agreement) or disclose (except as is necessary in the course of patenting,
sublicensing, marketing or selling Licensed Products or obtaining governmental
approval to do so, or as is required to be disclosed pursuant to law (provided
that the receiving party uses reasonable efforts to give the disclosing party
reasonable notice of such required disclosure) as contemplated in this
Agreement) to any person (including without limitation any director, officer or
employee of a party who is not under an obligation of confidentiality
substantially similar to the obligation contained herein) the Licensed
Technology or any other information relating to the Licensed Products
(hereinafter referred to as the "Proprietary Information"). This obligation of
-----------------------
non-use and non-disclosure shall not extend to Proprietary Information:
(a) which can be demonstrated by the receiving party to have been
within its legitimate possession prior to the time of disclosure by
the disclosing party;
(b) which was in the public domain prior to disclosure by the
disclosing party, as evidenced by documents which were generally
published prior to such disclosure;
(c) which, after disclosure by the disclosing party, comes into the
public domain through no fault of the receiving party; or
(d) which is disclosed to the receiving party by a third party having
legitimate possession thereof and the unrestricted right to make such
disclosure.
9.2 PRIOR AGREEMENTS. The provisions of this Agreement supersede and
----------------
shall be substituted for any terms of any prior confidentiality agreement(s)
relating to the Proprietary Information between Licensee and Licensor which are
not consistent with this Agreement.
10. TERM AND TERMINATION
--------------------
10.1. DURATION Unless sooner terminated as otherwise provided in this
--------
Agreement, the term of this Agreement shall commence upon the date hereof and
shall continue until the later of fifteen (15) years from the date hereof or the
date of expiration of the last to expire of the Licensed Patents, except that
-----------
upon expiration of this Agreement at the end of such term, Licensee shall
automatically have a perpetual, paid-up, royalty-free license to make, have
made, use, sell and sublicense Licensed Technology without restriction.
-10-
<PAGE>
10.2 TERMINATION. Licensor shall have the right to terminate this Agreement
-----------
on the occurrence of any one or more of the following events:
(a) failure of Licensee to make any payment required pursuant to this
Agreement when due;
(b) failure of Licensee to render reports to Licensor as required by
this Agreement;
(c) the insolvency of Licensee;
(d) the institution of any proceeding by Licensee under any
bankruptcy, insolvency or moratorium law;
(e) any assignment by Licensee of substantially all of its assets for
the benefit of creditors;
(f) placement of Licensee's assets in the hands of a trustee or a
receiver unless the receivership or trust is dissolved within thirty
(30) days thereafter; or
(g) the material and intentional breach by Licensee of any other term
of this Agreement.
10.3 EXERCISE. Licensor may exercise its right of termination by giving
--------
Licensee, its trustees or receivers or assigns, sixty (60) days prior written
notice of Licensor's election to terminate. Upon the expiration of such period,
this Agreement shall automatically terminate unless (a) the other party has
previously cured the breach or condition permitting termination under the
preceding paragraph or (b) such breach or condition cannot reasonably be cured
within sixty (60) days due to causes beyond Licensee's control, Licensee
commences good faith efforts to cure such breach within such 60-day period and
Licensee does cure the breach within one hundred twenty (120) days after the
expiration of such 60-day period, in which case this Agreement shall not
terminate. Such notice and termination shall not prejudice Licensor's rights to
any royalties and other sums due hereunder and shall not prejudice any cause of
action or claim of Licensor accrued or to accrue on account of any breach or
default by Licensee.
10.4 FAILURE TO ENFORCE. The failure of Licensor at any time, or for any
------------------
period of time, to enforce any of the provisions of this Agreement shall not be
construed as a waiver of such provisions or the right of Licensor thereafter to
enforce each and every such provision.
10.5 TERMINATION BY LICENSEE. Licensee may terminate this Agreement at any
-----------------------
time giving Licensor six (6) months prior written notice of Licensee's election
to terminate.
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<PAGE>
10.6 EFFECT. In the event this Agreement is terminated prior to its
------
expiration for any reason whatsoever, Licensee shall not have any right to
return of any payments of any kind theretofore made by it to Licensor pursuant
to this Agreement; Licensee shall return, or at Licensor's direction destroy,
all plans, drawings, papers, notes, writings and other documents, samples,
organisms, biological materials and models constituting the Licensed Technology,
retaining no copies; and Licensee shall refrain from using or publishing any
portion of the Licensed Technology as provided in Section 9 of this Agreement.
Upon such termination of this Agreement, Licensee shall cease manufacturing,
processing, producing, using, selling or distributing Licensed Products;
provided, however that Licensee may continue to sell in the ordinary course of
- -----------------
business for a period of one hundred eighty (180) days reasonable quantities of
Licensed Products which are fully manufactured and in Licensee's normal
inventory at the date of termination if:
(a) all monetary obligations of Licensee to Licensor have been
satisfied and
(b) royalties on such sales are paid to Licensor in the amounts and in
the manner provided in this Agreement.
Upon termination of this Agreement, any sublicenses, granted by Licensee to
Sublicensees that have been approved by Licensor as contemplated by Section 2.3
and in which the Sublicensees are in full compliance, including without
limitation compliance with the obligations under Sections 5, 9, 11 and 12 of
this Agreement, shall continue in full force and effect with Licensor
substituted in Licensee's place. The provisions of Sections 9, 11 and 12 of
this Agreement shall remain in full force and effect notwithstanding any
termination of this Agreement.
11. INDEMNIFICATION AND INSURANCE
-----------------------------
11.1 INDEMNIFICATION. Licensee shall defend, indemnify, and hold harmless
----------------
Licensor, the University of Oklahoma and their officers, directors, trustees and
employees and all of their heirs, executors, administrators and legal
representatives ("Indemnitees") from and against any and all claims, demands,
-----------
loss, liability, expense or damage (including investigative costs, court costs
and attorneys' fees) Indemnitees may suffer, pay or incur as a result of claims,
demands or actions against any of the Indemnitees arising or alleged to arise by
reason of or in connection with any and all personal injury, economic loss and
property damage caused or alleged to be caused or contributed to in whole or in
part by the manufacture, use, lease, sale or sublicense of Licensed Products by
Licensee, whether asserted under a tort or contractual theory or any other legal
theory, including but not limited to any and all claims, demands, and actions in
which it is alleged that: (1) an Indemnitee's negligence or representations
about the Licensed Products caused any defect in their manufacture, design,
labeling or performance, or (2) any alleged infringement of any patent,
trademark or copyright, caused or contributed in whole or in part to the
personal injury, economic loss or property damage. Licensee's obligations under
this paragraph shall survive the expiration or termination of this Agreement for
any reason.
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<PAGE>
11.2 INSURANCE. Without limiting Licensee's indemnity obligations under
---------
the preceding paragraph, prior to testing any compounds in humans, Licensee
shall obtain a liability insurance policy which:
(a) insures Indemnitees for all claims, demands and actions mentioned
in the preceding paragraph of this Agreement;
(b) includes a contractual endorsement providing coverage for all such
liability which may be incurred by Indemnitees in connection with this
Agreement;
(c) requires the insurance carrier to provide Licensor with no less
than thirty (30) days written notice of any change in the terms of
coverage of the policy or its cancellation; and
(d) provides Indemnitees with product liability coverage in the
following amounts for the periods indicated below:
(i) $500,000 in product liability coverage during the period in
which one (1) or more Licensed Products are being used in United
States FDA clinical trials in human beings but no Licensed Products
are approved by FDA for use in human beings;
(ii) $2,500,000 in product liability coverage for each Licensed
Product approved by FDA for use in human beings;
subject to a deductible of not more than $100,000 per occurrence.
Licensee shall maintain such liability insurance policy throughout the term of
this Agreement and for three (3) years thereafter.
11.3 NOTICE OF CLAIMS. Licensee will promptly notify Licensor of all
----------------
claims involving Licensed Products.
11.4 EVIDENCE OF INSURANCE. Licensee shall provide Licensor with copies
---------------------
of liability policies which comply fully with this Agreement during the entire
period Licensee is required to maintain such insurance. If Licensee fails at
any time to maintain insurance as required in this Agreement, Licensor may (but
shall be under no obligation to) purchase its own policy providing all or any of
the coverage and recover from Licensee the cost thereof, which shall be payable
on demand.
11.5 COMPLIANCE WITH SECURITIES LAWS. Licensee shall use its reasonable
-------------------------------
efforts to ensure that any sales of its securities that shall be effected
subsequent to the date hereof shall only be made, and that any activities to
raise funds with which Licensee will satisfy any of its
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<PAGE>
obligations to Licensors hereunder will only be conducted, in compliance with
all applicable laws, including without limitation all applicable federal, state
or foreign securities laws. Licensee shall retain independent legal counsel to
advise Licensee with respect to the liabilities and obligations arising out of,
among other things, the raising of funds by Licensee to fund its payment
obligations to Licensors hereunder and the offers or sales of securities by
Licensee. Such counsel shall be experienced and competent in corporate and
securities matters such as the foregoing and shall be reasonably acceptable to
Licensors. It is understood and agreed that current counsel to Licensee, Fenwick
& West, is acceptable to Licensors.
11.6 INDEMNIFICATION BY LICENSEE. Licensee shall indemnify and hold
---------------------------
harmless Indemnitees against and with respect to all losses, damages, claims,
liabilities or expenses (including reasonable attorneys' fees and expenses)
incurred or sustained by any of them as a result of, or arising out of, any
violation, breach or nonfulfillment on the part of Licensee of any
representation, warranty, covenant or agreement made by Licensee pursuant to
this Agreement. Licensor or another indemnified party hereunder shall notify
Licensee in writing promptly after it or they acquire actual knowledge of any
action or claim against it or them hereunder which may give rise to liability of
Licensee pursuant to this paragraph. Licensee may, at its own expense, through
legal counsel approved by Licensor, defend or settle any such claim or action,
provided that Licensee posts security that is adequate in the reasonable
discretion of Licensor to protect Licensor or the other indemnified party or
parties and provided Licensor are notified in writing of Licensee's intent to so
defend within ten (10) days after Licensee has been notified by Licensor or such
other indemnified party of such claim or action.
11.7 CONTRIBUTION BY LICENSEE. If the indemnification provided for in the
------------------------
immediately preceding paragraph is unavailable or insufficient to hold harmless
an indemnified party in respect of any of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above, then Licensee
shall contribute to the amount paid or payable by each such indemnified party as
a result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by Licensee on the one hand and Licensor and any other indemnified
parties on the other from the activities from which such losses, claims, damages
or liabilities arose, as well as the relative fault of Licensee on the one hand
and Licensor on the other in connection with the actions or inactions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations.
12. MERCHANTABILITY, EXCLUSION OF WARRANTIES, LIMITATION OF DAMAGES AND
-------------------------------------------------------------------
WARRANTIES
- ----------
12.1 Licensee has made its own evaluation of the potential capabilities,
safety, utility and commercial application of the Licensed Technology, Licensed
Products and Licensed Processes.
ACCORDINGLY, LICENSOR MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND
WITH RESPECT TO THE LICENSED TECHNOLOGY, LICENSED PRODUCTS OR LICENSED
PROCESSES AND
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<PAGE>
EXPRESSLY DISCLAIM ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE AND ANY OTHER IMPLIED WARRANTIES WITH RESPECT TO
THE CAPABILITIES, SAFETY, UTILITY OR COMMERCIAL APPLICATION OF
LICENSED TECHNOLOGY, LICENSED PRODUCTS AND LICENSED PROCESSES.
12.2 LIMITATION OF LIABILITY. LICENSOR SHALL NOT BE LIABLE FOR ANY
-----------------------
DIRECT, CONSEQUENTIAL OR OTHER DAMAGES SUFFERED BY LICENSEE OR ANY OTHER
RESULTING FROM THE USE OF THE LICENSED TECHNOLOGY, LICENSED PRODUCTS OR
LICENSED PROCESSES.
12.3 REPRESENTATIONS AND WARRANTIES OF LICENSEE. Licensee hereby makes
------------------------------------------
the following representations and warranties to Licensor, which representations
and warranties, together with all other representations and warranties of
Licensee in this Agreement, are true and correct on the date hereof;
(a) Licensee is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to enter into this Agreement
and perform its obligations hereunder.
(b) Neither the execution or delivery of this Agreement, nor the
consummation of the transactions contemplated herein, will (a) violate
or conflict with any provision of the Certificate of Incorporation or
By-laws of Licensee, as each may have been amended; (b) with or
without the giving of notice or the lapse of time or both (i) result
in a breach of, or violate, or be in conflict with or constitute a
default under, or result in the termination or cancellation of, or
accelerate the performance required under, any security instrument,
mortgage, note, debenture, indenture, loan, lease, contract, agreement
or other instrument, to which Licensee is a party or by which it or
any of its properties or assets may be bound or affected, or (ii)
result in the loss or adverse modification of any lease, franchise,
license or other contractual right or other authorization granted to
or otherwise held by Licensee; (c) require the consent of any party to
any such agreement or commitment to which Licensee is a party or by
which any of its properties or assets are bound; (d) result in the
creation or imposition of any lien, claim or encumbrance upon any
property or assets of Licensee; or (e) require any consent, approval,
authorization, order, filing, registration or qualification of or with
any court or governmental authority or arbitrator to which Licensee is
subject or by which any of its properties or assets may be bound or
affected.
(c) All actions to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein
have been duly taken, and this Agreement constitutes the valid and
binding obligation of Licensee enforceable in accordance with its
terms.
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<PAGE>
(d) There are no claims (relating to patent infringement or any other
matters), actions, suits, proceedings, arbitrations or investigations
pending or, to the best of Licensee's knowledge, threatened, against
Licensee which if adversely determined would adversely affect the
Licensed Technology (or the patentability thereof) or other technology
practiced by Licensee, or Licensee's ability to enter into or carry
out this Agreement or use or license Licensed Technology.
12.4 REPRESENTATIONS AND WARRANTIES OF LICENSOR. Licensor hereby makes the
------------------------------------------
following representations and warranties to Licensee, which representations and
warranties, together with all other representations and warranties of Licensor
in this Agreement, are true and correct on the date hereof;
(a) Licensor is a nonprofit corporation duly organized, validly
existing and in good standing under the laws of the State of Oklahoma
and has all requisite corporate power and authority to enter into this
Agreement and perform its obligations hereunder.
(b) Neither the execution or delivery of this Agreement, nor the
consummation of the transactions contemplated herein, will (a) violate
or conflict with any provision of the Articles of Incorporation or By-
laws of Licensor, as each may have been amended; (b) require the
consent of any party to any agreement or commitment to which Licensor
is a party or which affects the Licensed Technology; (c) result in the
creation or imposition of any lien, claim or encumbrance upon the
Licensed Technology; or (d) require any consent, approval,
authorization, order, filing, registration or qualification of or with
any court or governmental authority or arbitrator to which Licensor is
subject or by which the Licensed Technology may be affected.
(c) All actions to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein
have been duly taken, and this Agreement constitutes the valid and
binding obligation of Licensor enforceable in accordance with its
terms.
(d) There are no claims (relating to patent infringement or any other
matters), actions, suits, proceedings, arbitrations or investigations
pending or, to the best of Licensor's knowledge, threatened, against
Licensor which if adversely determined would adversely affect the
Licensed Technology (or the patentability thereof) or Licensor's
ability to enter into or carry out this Agreement.
13. MISCELLANEOUS AND GENERAL
-------------------------
13.1 EXPORT CONTROLS. Licensee acknowledges that Licensor is subject to
---------------
United States laws and regulations controlling the export of technical data,
computer software,
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<PAGE>
laboratory prototypes and other commodities and that its obligations hereunder
are contingent on compliance with all applicable United States export and other
laws and regulations. The transfer of certain technical data and commodities may
require a license from the cognizant agency of the United States Government
and/or written assurances by Licensee that Licensee shall not export data or
commodities to certain foreign countries without prior approval of such agency.
Licensor neither represent that a license shall not be required nor that, if
required, it shall be issued.
13.2 LEGAL COMPLIANCE. Licensee agrees that it will comply with all
----------------
applicable laws and regulations in relation to its manufacture, processing,
producing, use, selling or distributing of Licensed Products and that it will
not at any time take any action which would cause Licensor or Licensee to be in
violation of any of such applicable laws and regulations.
13.3 REQUIRED CONSENTS. Licensee shall obtain any and all licenses,
-----------------
permits, approvals or authorizations ("Required Consents") required by any
-----------------
governmental entity or agency having jurisdiction over the transactions
contemplated by this Agreement. Licensor shall cooperate with, and provide
reasonable assistance to, Licensee in obtaining the Required Consents; provided,
---------
however, that Licensee shall reimburse Licensor for all of Licensor's out-of-
- -------
pocket expenses incurred in providing such assistance.
13.4 INDEPENDENT CONTRACTOR. Licensee's relationship to Licensor
----------------------
hereunder shall be that of a licensee only. Licensee shall not be the agent of
Licensor and shall have no authority to act for or on behalf of Licensor in any
matter. Persons retained by Licensee as employees or agents shall not by reason
thereof be deemed to be employees or agents of Licensor.
13.5 PATENT MARKING. Licensee agrees to mark, to the extent practical, the
--------------
Licensed Products sold in the United States with all applicable United States
patent numbers. All Licensed Products shipped to or sold in other countries
shall be marked, to the extent practical, in such a manner as to conform with
the patent laws and practice of the country of manufacture or sale.
13.6 USE OF NAMES. No name of any party to this Agreement, or of any
------------
officer, trustee, director or employee of any party, may be used by any party in
any manner for announcing, advertising, promoting or marketing Licensed
Products, Licensed Processes or securities unless the written permission of such
party, or the individual, as the case may be, is obtained in advance.
13.7 INTERPRETATION. The parties are equally responsible for the
--------------
preparation of this Agreement, and in any judicial proceeding the terms hereof
shall not be more strictly construed against one party than the other.
13.8 NOTICES. All notices, statements and reports required or contemplated
-------
herein by one party to the other shall be in writing and shall be deemed to have
been given upon delivery in person or upon the expiration of five (5) days after
deposit in a lawful mail depository in the
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<PAGE>
country of residence of the party giving the notice, registered or certified
airmail postage prepaid, and addressed as follows:
If to Licensor:
---------------
Attention: President
Oklahoma Medical Research Foundation
825 N. E. 13th Street
Oklahoma City, Oklahoma 73104
Facsimile: (405) 271-3980
With a copy to:
John S. Pratt
Kilpatrick Stockton LLP
1100 Peachtree Street
Atlanta, Georgia 30309-4530
Facsimile: (404) 815-6555
If to Licensee:
---------------
Attention: President
Centaur Pharmaceuticals, Inc.
484 Oakmead Parkway
Sunnyvale, CA 94086
Facsimile: 408-481-1601
With a copy to:
Ira Nordlicht
Nordlicht and Hand
Olympic Tower
645 Fifth Avenue
New York, NY 10022
Any party hereto may change the address to which notices to such party are
to be sent by giving notice to the other parties at the addresses and in the
manner provided above. Any notice herein required or permitted to be given may
be given, in addition to the manner set forth above, by telex, facsimile or
cable, provided that the party giving such notice obtains acknowledgment by
telex, facsimile or cable that such notice has been received by the party or
parties to be notified. Notice made in this manner shall be deemed to have been
given when such acknowledgment has been transmitted.
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<PAGE>
13.9 ASSIGNMENTS AND INUREMENT. Except as otherwise provided in this
-------------------------
Agreement, Licensee shall not grant, transfer, convey or otherwise assign any of
its rights or delegate any of its obligations under this Agreement (except in
the course of a merger, consolidation or acquisition of all or substantially all
of Licensee's business) without the prior written consent of Licensor, which
consent shall not be unreasonably withheld or delayed, and any attempt by
Licensee to do so shall be of no effect; however, this Agreement shall be
assignable by Licensor. This Agreement shall be binding upon and inure to the
benefit of the successors and permitted assigns of the parties hereto.
13.10 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
----------------
between Licensor and Licensee with respect to the subject matter hereof and
shall not be modified, amended or terminated except as herein provided or except
by another agreement in writing executed by the parties hereto.
13.11 HEADINGS. The section and paragraph headings are for convenience
--------
only and are not a part of this Agreement.
13.12 SEVERABILITY. All rights and restrictions contained herein may be
------------
exercised and shall be applicable and binding only to the extent that they do
not violate any applicable laws and are intended to be limited to the extent
necessary so that they will not render this Agreement illegal, invalid or
unenforceable. If any provision or portion of any provision of this Agreement
not essential to the commercial purpose of this Agreement shall be held to be
illegal, invalid or unenforceable by a court of competent jurisdiction, it is
the intention of the parties that the remaining provisions or portions thereof
shall constitute their agreement with respect to the subject matter hereof, and
all such remaining provisions or portions thereof shall remain in full force and
effect. To the extent legally permissible, any illegal, invalid or
unenforceable provision of this Agreement shall be replaced by a valid provision
which will implement the commercial purpose of the illegal, invalid or
unenforceable provision. In the event that any provision essential to the
commercial purpose of this Agreement is held to be illegal, invalid or
unenforceable and cannot be replaced by a valid provision which will implement
the commercial purpose of this Agreement, this Agreement and the rights granted
herein shall terminate.
13.13 COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the day and year first above
written.
LICENSOR:
--------
OKLAHOMA MEDICAL RESEARCH FOUNDATION
By: /s/ William G. Thurman, M.D.
-------------------------------------
Dr. William G. Thurman, M.D.
President Emeritus
LICENSEE:
---------
CENTAUR PHARMACEUTICALS, INC.
By: /s/ Brian D. Frenzel
-------------------------------------
Brian D. Frenzel
President and CEO
SIGNATURE PAGE TO CENTAUR/OMRF LICENSE AGREEMENT
- ------------------------------------------------
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