CUSIP No. 0002296781 Page 1 of 48 Pages
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
Cubist Pharmaceuticals, Inc.
_________________________________________________________________
(Name of Issuer)
Common Stock, $.001 par value
_________________________________________________________________
(Title of Class of Securities)
0002296781
_________________________________________________________________
(CUSIP Number)
Jeremy L. Curnock Cook John C. MacMurray, Esq.
Rothschild Asset Management Ltd. Reboul, MacMurray, Hewitt,
Five Arrows House Maynard & Kristol
St. Swithin's Lane 45 Rockefeller Plaza
London EC4N 8NR England New York, New York 10111
Tel. 011-171-280-5000 Tel. (212) 841-5700
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 18, 1997
________________________________
(Date of Event Which Requires
Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ].
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CUSIP No. 0002296781 Page 2 of 48 Pages
1) Name of Reporting Person International S.S.
or I.R.S. Identification Biotechnology
No. of Above Person Trust plc
_________________________________________________________________
2) Check the Appropriate Box (a) [ ]
if a Member of a Group (b) [ ]
_________________________________________________________________
3) SEC Use Only
_________________________________________________________________
4) Source of Funds WC
_________________________________________________________________
5) Check if Disclosure of
Legal Proceedings is Not Applicable
Required Pursuant to
Items 2(d) or 2(e)
_________________________________________________________________
6) Citizenship or Place
of Organization United Kingdom
_________________________________________________________________
Number of 7) Sole Voting 1,116,327 shares of
Shares Beneficially Power Common Stock, $.001 Owned by
par value ("Common
Reporting Person Stock")
________________________________________
8) Shared Voting
Power -0-
________________________________________
9) Sole Disposi- 1,116,327 shares of
tive Power Common Stock
________________________________________
10) Shared Dis-
positive Power -0-
________________________________________
11) Aggregate Amount Beneficially 1,116,327 shares of
Owned by Each Reporting Person Common Stock
_________________________________________________________________
12) Check if the Aggregate
Amount in Row (11)
Excludes Certain Shares
_________________________________________________________________
13) Percent of Class
Represented by 10.8%
Amount in Row (11)
_________________________________________________________________
14) Type of Reporting
Person CO
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CUSIP No. 0002296781 Page 3 of 48 Pages
Schedule 13D
____________
Item 1. Security and Issuer.
___________________
This statement relates to the Common Stock, $.001 par value (the
"Common Stock"), of Cubist Pharmaceuticals, Inc., a Delaware corporation
(the "Issuer"). The principal executive offices of the Issuer are located
at 24 Emily Street, Cambridge, Massachusetts 02139.
Item 2. Identity and Background.
_______________________
(a) The undersigned hereby files this Schedule 13D on behalf of
International Biotechnology Trust plc, a corporation organized under the
laws of the United Kingdom ("IBT" or the "Reporting Person"). The name,
business address and occupation of each executive officer and director of
IBT is set forth on Schedule A hereto.
(b) The principal business of IBT is that of a publicly-traded
investment trust company.
(c) IBT's principal business address is Five Arrows House, St.
Swithin's Lane, London EC4N 8NR, England.
(d) Neither IBT nor any of the persons identified in this Item 2
has, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) Neither IBT nor any of the persons identified in this Item 2
has, during the last five years, been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
_________________________________________________
This statement relates to the purchase by IBT of 816,327 shares
of Common Stock (the "Shares") directly from the Issuer pursuant to a Stock
Purchase Agreement dated as of July 18, 1997 by and between IBT and the
Issuer (the "Purchase Agreement") (the "Private Placement"). The Purchase
Agreement is attached as Exhibit A hereto, and any description thereof is
qualified in its entirety by reference thereto. The purchase price of the
Shares was $6.125 per share, or, in the aggregate, $5,000,002.875. On July
24, 1997 IBT purchased an additional
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CUSIP No. 0002296781 Page 4 of 48 Pages 300,000
shares of Common Stock on the open market, at a purchase price of $6.00 per
share, or, in the aggregate, $1,800,000. The source of funds for both such
acquisitions was IBT's funds available for investment.
Item 4. Purpose of Transaction.
______________________
IBT purchased the Common Stock in the transactions described in
Item 3 above for investment purposes. In accordance with the terms of the
Purchase Agreement, the Issuer will use its best efforts to cause an
individual designated by IBT to be elected to a seat on the Board of
Directors of the Issuer.
Item 5. Interest in Securities of the Issuer.
____________________________________
(a) Based on a total of 10,385,713 shares of Common Stock
outstanding after the completion of the Private Placement, IBT owns
1,116,327 shares of Common Stock, or approximately 10.8% of the Common
Stock outstanding.
(b) Except as described in Item 6 below, IBT has sole power to
vote or direct the voting of and to dispose or to direct the disposition of
the shares of Common Stock referred to in paragraph (a) above.
(c) Except as described in this statement, neither IBT nor any
of the persons identified in Item 2 above has effected any transaction in
the Common Stock in the past 60 days.
(d) No other person has the power to direct the receipt of
dividends on, or the proceeds from sales of, the shares of Common Stock
owned by IBT.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings
or Relationships with Respect to
Securities of the Issuer.
_______________________________________
Pursuant to a contractual agreement, IBT has engaged Rothschild
Asset Management Limited ("RAM") to act as its discretionary investment
manager. Pursuant to such agreement RAM manages the business and assets of
IBT, which includes the authority to make decisions regarding the
acquisition or disposition of portfolio securities by IBT and to exercise
any rights (including voting rights) with respect to such securities. IBT
has the right to terminate RAM's appointment as manager at any time if RAM
is not performing its duties as manager to the satisfaction of the Board of
Directors of IBT.
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CUSIP No. 0002296781 Page 5 of 48 Pages
Pursuant to the Purchase Agreement, IBT has agreed with the Issuer that for
five years it will not, without the prior written consent of the Issuer,
directly or indirectly acquire beneficial ownership of any shares of Common
Stock (or any securities convertible into, exercisable for or exchangeable
for Common Stock) of the Issuer, if the effect of such acquisition would be
to increase the aggregate number of shares of Common Stock then directly or
indirectly beneficially owned by IBT to more than the number of shares
purchased pursuant to the Purchase Agreement.
As a condition to the Purchase Agreement, the Issuer and IBT
entered into a Registration Rights Agreement on July 18, 1997 (the
"Registration Rights Agreement") with respect to the Shares purchased
thereunder, giving IBT certain rights to the registration of the Shares
under the Securities Act of 1933, as amended. The Registration Rights
Agreement is attached as Exhibit B hereto, and any description thereof is
qualified in its entirety by reference thereto.
Item 7. Material to be Filed as Exhibits.
________________________________
Exhibit A -- Purchase Agreement
Exhibit B -- Registration Rights Agreement
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CUSIP No. 0002296781 Page 6 of 48 Pages
Signature
_________
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: July 24, 1997
INTERNATIONAL BIOTECHNOLOGY
TRUST PLC
By:/s/ Jeremy L. Curnock Cook
Director
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CUSIP No. 0002296781 Page 7 of 48 Pages
SCHEDULE A
__________
EXECUTIVE OFFICERS AND DIRECTORS OF IBT
The business address of each person listed below is c/o
Rothschild Asset Management Limited, Five Arrows House, St. Swithin's Lane,
London EC4N 8NR, England. The occupation of each person listed below
refers only to his relationship to IBT.
Name Occupation Citizenship
____ __________ ___________
John M. Green-Armytage Chairman U.K.
Donald Cecil Deputy U.S.
Chairman
Gary M. Brass Director U.K.
Jeremy L. Curnock Cook Director U.K.
Peter B. Collacott Director U.K.
Stephen A. Duzan Director U.S.
James D. Grant Director U.S.
Howard E. Greene Director U.S.
Dennis M.J. Turner Director U.K.
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CUSIP No. 0002296781 Page 8 of 48 Pages
EXHIBIT_A
_________
CUBIST PHARMACEUTICALS, INC.
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT is dated as of the 18th day of July, 1997
by and between CUBIST PHARMACEUTICALS, INC., a Delaware corporation with its
principal office at 24 Emily Street, Cambridge, Massachusetts 02139 (the
"Company"), and the several purchasers named in the attached Exhibit A
(individually, a "Purchaser" and collectively, the "Purchasers").
WHEREAS, the Company desires to issue and sell to the Purchasers, and
the Purchasers, severally, desire to purchase from the Company, shares of the
authorized but unissued shares of common stock, $.001 par value per share, of
the Company (the "Common Stock"), all upon the terms and subject to the
conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual agreements,
representations, warranties and covenants herein contained, the parties
hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:
(a) "Affiliate" of a party means any corporation or other business
entity controlled by, controlling or under common control with such party.
For this purpose "control" shall mean direct or indirect beneficial ownership
of fifty percent (50%) or more of the voting or income interest in such
corporation or other business entity.
(b) "Closing Date" means the date of the Closing.
(c) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and all of the rules and regulations promulgated thereunder.
(d) "IBT" means International Biotechnology Trust plc, a corporation
organized under the laws of the United Kingdom.
(e) "Intangible Rights" means (i) patents, trademarks, trade names,
service marks and copyrights, trademark, trade name, service mark and
copyright registrations, logotypes, all applications pending on the date
hereof by or before any governmental body with respect to any of the
foregoing and (ii) all licenses or other
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CUSIP No. 0002296781 Page 9 of 48 Pages
contracts or agreements granted by or to the Company or to which the Company
is a party that relate, in whole or in part, to any of the items referred to
in clause (i) above.
(f) "Purchase Price" means $6.125 per Share (subject to proportionate
adjustment upon the occurrence of any stock split, stock dividend or reverse
stock split that is consummated or becomes effective during the period
commencing after the date hereof and ending immediately prior to the
Closing).
(g) "Registration Rights Agreement" shall mean that certain
Registration Rights Agreement, substantially in the form of Exhibit B
attached hereto, to be entered into by the Company and the Purchasers at the
Closing.
(h) "Regulation S" shall mean Regulation S promulgated under the
Securities Act, as such Regulation may be amended and in effect from time to
time.
(i) "Regulation S Shares" shall mean any Shares sold or issued by the
Company in reliance on Regulation S, which reliance and the need therefor
shall be determined by the Corporation in its absolute discretion at the time
of such sale or issuance and shall be conclusively evidenced by affixing the
legends required by Section 7.2(a) hereof.
(j) "Majority Purchasers" shall mean those Purchasers which have the
right, pursuant to this Agreement, to purchase more than fifty percent (50%)
of the Shares.
(k) "SEC" shall mean the Securities and Exchange Commission.
(l) "Securities Act" shall mean the Securities Act of 1933, as amended,
and all of the rules and regulations promulgated thereunder.
(m) "Shares" shall mean (i) in the case of any Purchaser, the shares of
Common Stock to be purchased by such Purchaser, at the Closing, pursuant to
Section 2.1 of this Agreement and (ii) in the case of all of the Purchasers
as a group, the aggregate number of shares of Common Stock to be purchased by
all of the Purchasers, at the Closing, pursuant to Section 2.1 of this
Agreement.
2. Purchase and Sale of Shares.
2.1 Purchase and Sale. Subject to and upon the terms and conditions
set forth in this Agreement, the Company agrees to issue and sell to each
Purchaser, and each Purchaser, severally, hereby agrees to purchase from the
Company, at the Closing, that number of shares of Common Stock equal to the
quotient obtained by dividing
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CUSIP No. 0002296781 Page 10 of 48 Pages
(i) the dollar amount set forth opposite the name of such Purchaser under the
heading "Total Amount of Investment" on Exhibit A hereto by (ii) the Purchase
Price. The purchase price payable by each Purchaser for each of the shares
of Common Stock to be purchased by such Purchaser pursuant to this Agreement
shall be equal to the Purchase Price. The aggregate purchase price payable
by the Purchasers to the Company for all of the Shares shall be
$5,000,002.875.
2.2 Closing. The closing of the transactions contemplated under this
Agreement (the "Closing") shall take place at the offices of Bingham, Dana &
Gould LLP, 150 Federal Street, Boston, Massachusetts 02110 at 10:00 a.m. on
July 18, 1997 or at such other location, date and time as may be agreed upon
in writing between all of the Purchasers and the Company. At the Closing,
the Company shall deliver to each Purchaser a single stock certificate,
registered in the name of such Purchaser, representing the number of shares
of Common Stock purchased by such Purchaser, against payment of the purchase
price therefor by wire transfer of immediately available funds to such
account or accounts as the Company shall designate in writing.
3. Representations and Warranties of the Company. The Company hereby
represents and warrants to each of the Purchasers as follows:
3.1 Incorporation. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is qualified to do business in each jurisdiction in which the character
of its properties or the nature of its business requires such qualification,
except where the failure to so qualify would not have a material adverse
effect upon the Company. The Company has all requisite corporate power and
authority to carry on its business as now conducted.
3.2 Capitalization. The authorized capital stock of the Company
consists of (i) 25,000,000 shares of Common Stock, of which 9,569,386 shares
are outstanding on the date hereof and (ii) 5,000,000 shares of preferred
stock, of which no shares are outstanding on the date hereof. Except as set
forth in Schedule 3.2 hereto, there are no existing options, warrants, calls,
preemptive (or similar) rights, subscriptions or other rights, agreements,
arrangements or commitments of any character obligating the Company to issue,
transfer or sell, or cause to be issued, transferred or sold, any shares of
the capital stock of the Company or other equity interests in the Company or
any securities convertible into or exchangeable for such shares of capital
stock or other equity interests, and there are no outstanding contractual
obligations of the Company to repurchase, redeem or otherwise acquire any
shares of its capital stock or other equity interests.
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CUSIP No. 0002296781 Page 11 of 48 Pages
3.3 Authorization. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution, delivery and performance of this Agreement and the Registration
Rights Agreement and the consummation of the transactions contemplated herein
and therein has been taken. When executed and delivered by the Company, each
of this Agreement and the Registration Rights Agreement shall constitute the
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as such may be limited by
bankruptcy, insolvency, reorganization or other laws affecting creditors'
rights generally and by general equitable principles. The Company has all
requisite corporate power to enter into this Agreement and the Registration
Rights Agreement and to carry out and perform its obligations under the terms
of this Agreement and the Registration Rights Agreement.
3.4 Valid Issuance of the Shares. The Shares being purchased by the
Purchasers hereunder will, upon issuance pursuant to the terms hereof, be
duly authorized and validly issued, fully paid and nonassessable.
3.5 Financial Statements. The Company has furnished to each Purchaser
its audited Statements of Income, Stockholders' Equity and Cash Flows for
each of the fiscal years ended December 31, 1995 and 1996, its audited
Consolidated Balance Sheet as of December 31, 1996, its unaudited Statements
of Income, Stockholders' Equity and Cash Flows for the period from January 1,
1997 to March 31, 1997, and its unaudited Balance Sheet as of March 31, 1997.
All such financial statements are hereinafter referred to collectively as the
"Financial Statements". The Financial Statements have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved, and fairly present, in all
material respects, the financial position of the Company and the results of
its operations as of the date and for the periods indicated thereon, except
that the unaudited financial statements may not be in accordance with
generally accepted accounting principles because of the absence of footnotes
normally contained therein and are subject to normal year-end audit
adjustments which, individually, and in the aggregate, will not be material.
Since March 31, 1997, there has been no material adverse change (actual or
threatened) in the assets, liabilities (contingent or other), operations or
condition (financial or other) of the Company.
3.6 SEC Documents. The Company has furnished to each Purchaser, a true
and complete copy of the Company's Annual Report on Form 10-K for the year
ended December 31, 1996, the Company's Quarterly Report on Form 10-Q for the
three months ended March 31, 1997, and any other statement, report,
registration statement (other than registration statements on Form S-8) or
definitive
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CUSIP No. 0002296781 Page 12 of 48 Pages
proxy statement filed by the Company with the SEC during the period
commencing March 31, 1997 and ending on the date hereof. The Company will,
promptly upon the filing thereof, also furnish to each Purchaser all
statements, reports (including, without limitation, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K), registration statements and definitive
proxy statements filed by the Company with the SEC during the period
commencing on the date hereof and ending on the Closing Date (all such
materials required to be furnished to each Purchaser pursuant to this
sentence or pursuant to the next preceding sentence of this Section 3.6 being
called, collectively, the "SEC Documents"). As of their respective filing
dates, the SEC Documents complied or will comply in all material respects
with the requirements of the Exchange Act or the Securities Act, as
applicable, and none of the SEC Documents contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading, as of their
respective filing dates, except to the extent corrected by a subsequently
filed SEC Document. The Company has, during the period that the Company has
been subject to the requirements of Section 12 or 15(d) of the Exchange Act,
filed in a timely manner all reports and other material required to be filed
by it pursuant to Section 13, 14 or 15(d) of the Exchange Act. The Company
has not filed any amendment to its Annual Report on Form 10-K for the year
ended December 31, 1996 or its Quarterly Report on Form 10-Q for the three
months ended March 31, 1997. As of the date hereof, the Company has not
filed any Current Report on Form 8-K for any period ending on the date
hereof.
3.7 Consents. Except for (i) the filing and effectiveness of any
registration statement required to be filed by the Company under the
Securities Act in connection with the exercise by one or more Purchasers of
their rights under the Registration Rights Agreement and (ii) any required
state "blue sky" law filings in connection with the transactions contemplated
under such registration statement, all consents, approvals, orders and
authorizations required on the part of the Company in connection with the
execution, delivery or performance of this Agreement and the Registration
Rights Agreement and the consummation of the transactions contemplated herein
and therein have been obtained and will be effective as of the Closing Date.
3.8 No Conflict. The execution and delivery of this Agreement and the
Registration Rights Agreement by the Company and the consummation of the
transactions contemplated hereby and thereby will not conflict with or result
in any violation of or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to a loss of a material benefit under (i)
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CUSIP No. 0002296781 Page 13 of 48 Pages
any provision of the Certificate of Incorporation or By-laws of the Company
or (ii) any agreement or instrument, permit, franchise, license, judgment,
order, statute, law, ordinance, rule or regulations, applicable to the
Company or its respective properties or assets.
3.9 Brokers or Finders. The Company has not dealt with any broker or
finder in connection with the transactions contemplated by this Agreement,
and the Company has not incurred, and shall not incur, directly or
indirectly, any liability for any brokerage or finders' fees or agents
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
3.10 Nasdaq National Market. The Common Stock is listed on the Nasdaq
National Market System, and there are no proceedings to revoke or suspend
such listing.
3.11 Absence of Litigation. There is no action, suit or proceeding or,
to the Company's knowledge, any investigation, pending, or to the Company's
knowledge, threatened by or before any governmental body against the Company
and in which an unfavorable outcome, ruling or finding in any said matter, or
for all matters taken as a whole, might have a material adverse effect on the
Company. The foregoing includes, without limitation, any such action, suit,
proceeding or investigation that questions this Agreement or the Registration
Rights Agreement or the right of the Company to execute, deliver and perform
under same.
3.12 Intangible Rights. To the Company's knowledge, all Intangible
Rights that are necessary for the conduct of the business of the Company as
it is conducted on the date hereof are valid and enforceable, and no claims
adverse to the interests of the Company have been asserted with respect to
the Company's ownership or use of any such Intangible Rights. Except for
infringements that would not, individually or in the aggregate, have a
material adverse effect on the Company or on the Company's operations or
financial condition, to the knowledge of the Company, the Company is not
infringing any Intangible Right owned or used by any third party nor is any
third party infringing any Intangible Right owned or used by the Company.
3.13 Certain Agreements. Except as set forth in Schedule 3.13 hereto,
all of the collaborative agreements, research and development agreements,
licensing agreements and other agreements with corporate partners that have
been previously disclosed by the Company in any reports or filings made by
the Company pursuant to the Exchange Act or in any registration statement
filed by the Company under the Securities Act prior to the date hereof, are
valid and enforceable obligations of the Company and, to the
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CUSIP No. 0002296781 Page 14 of 48 Pages
Company's knowledge, of the other parties thereto. Except for breaches or
defaults that would not, individually or in the aggregate, have a material
adverse effect on the Company or on the Company's operations or financial
condition, the Company is not in breach or default under any such contracts
or agreements, nor has there occurred any event which, with the giving of
notice or the passage of time, would constitute a breach or default on the
Company's part under any such contracts or agreements. To the Company's
knowledge, none of the other parties to such contracts and agreements is in
breach or default thereunder nor has there occurred any event which, with the
giving of notice or the passage of time, would constitute a breach or default
on any of such other party's part thereunder.
3.14 Certain Regulatory Matters. Except as set forth in Schedule 3.14
hereto, the Company has not conducted nor has had conducted on its behalf any
clinical or pre-clinical trials of any products of the Company nor has the
Company marketed, sold or licensed any products or filed or has pending with
the United States Food and Drug Administration ("FDA") any New Drug Applica-
tions, Investigatory New Drug Applications or Abbreviated New Drug
Applications.
3.15 Regulation S. The sale of those Shares to be purchased by IBT
pursuant to this Agreement will be made in accordance with Regulation S.
None of the Company, any person affiliated with the Company or any person
acting on behalf of the Company or any such affiliate engaged in any Directed
Selling Efforts (as defined in Regulation S) with respect to such Shares.
The transactions contemplated by this Agreement are not part of a plan or
scheme on the part of the Company to evade the registration provisions of the
Securities Act.
4. Representations and Warranties of the Purchasers. Each Purchaser
severally for itself, and not jointly with the other Purchasers, represents
and warrants to the Company as follows:
4.1 Authorization. All action on the part of such Purchaser and, if
applicable, its officers, directors and shareholders necessary for the
authorization, execution, delivery and performance of this Agreement and the
Registration Rights Agreement and the consummation of the transactions
contemplated herein and therein has been taken. When executed and delivered,
each of this Agreement and the Registration Rights Agreement will constitute
the legal, valid and binding obligation of such Purchaser, enforceable
against such Purchaser in accordance with its terms, except as such may be
limited by bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally and by general equitable principles. Such
Purchaser has all requisite corporate power to enter into each of this
Agreement and the Registration Rights
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CUSIP No. 0002296781 Page 15 of 48 Pages
Agreement and to carry out and perform its obligations under the terms of
this Agreement and the Registration Rights Agreement.
4.2 Purchase Entirely for Own Account. Such Purchaser is acquiring
those of the Shares being purchased by it hereunder, for investment, for its
own account, and not for resale or with a view to distribution thereof in
violation of the Securities Act. Notwithstanding the foregoing, each
Purchaser hereby reserves the right to dispose of the Shares in a manner
consistent with its fiduciary obligations to its shareholders and the
Securities Act and Exchange Act.
4.3 Investor Status; Etc. Such Purchaser certifies and represents to
the Company that at the time such Purchaser acquires any of the Shares, such
Purchaser (a) will not be a "U.S Person" as defined in Rule 902 of Regulation
S and/or (b) will be an "Accredited Investor" as defined in Rule 501 of
Regulation D promulgated under the Securities Act and was not organized for
the purpose of acquiring any of the Shares. Such Purchaser's financial
condition is such that it is able to bear the risk of holding those of the
Shares purchased by it pursuant to this Agreement for an indefinite period of
time and the risk of loss of its entire investment. Such Purchaser has been
afforded the opportunity to ask questions of and receive answers from the
management of the Company concerning this investment and has sufficient
knowledge and experience in investing in companies similar to the Company in
terms of the Company's stage of development so as to be able to evaluate the
risks and merits of its investment in the Company.
4.4 Shares Not Registered. Such Purchaser understands that the Shares
have not been registered under the Securities Act, by reason of their
issuance by the Company in a transaction exempt from the registration
requirements of the Securities Act, and that those of the Shares purchased by
such Purchaser pursuant to this Agreement must continue to be held by such
Purchaser unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from such registration. The Purchaser
understands that the exemptions from registration afforded by Rule 144 (the
provisions of which are known to it) promulgated under the Securities Act
depend on the satisfaction of various conditions, and that, if applicable,
Rule 144 may afford the basis for sales only in limited amounts.
4.5 No Conflict. The execution and delivery of this Agreement and the
Registration Rights Agreement by such Purchaser and the consummation of the
transactions contemplated hereby and thereby will not conflict with or result
in any violation of or default by such Purchaser (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to a loss of a material
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CUSIP No. 0002296781 Page 16 of 48 Pages
benefit under (i) any provision of the organizational documents of such
Purchaser or (ii) any agreement or instrument, permit, franchise, license,
judgment, order, statute, law, ordinance, rule or regulations, applicable to
such Purchaser or its respective properties or assets.
4.6 Brokers. Such Purchaser has not retained, utilized or been
represented by any broker or finder in connection with the transactions
contemplated by this Agreement.
4.7 Consents. All consents, approvals, orders and authorizations
required on the part of such Purchaser in connection with the execution,
delivery or performance of this Agreement and the consummation of the
transactions contemplated herein have been obtained and are effective as of
the Closing Date.
4.8 Investment Representations. IBT, as to itself, represents and
warrants to the Company that: (i) it is a corporation organized under the
laws of the United Kingdom, (ii) it is not a U.S. Person (as such term is
defined in Rule 902 of Regulation S), (iii) it is not acquiring any of the
Shares for the account or benefit of any U.S. Person, (iv) it was not formed
for the specific purpose of acquiring any of the Shares, (v) its principal
office is located in London, England and (vi) it will not, during the
applicable Restricted Period (as defined under Regulation S) offer or sell
any of the Shares purchased by it, in the United States, to a U.S. Person or
for the account or benefit of a U.S. Person or other than in accordance with
Rule 903 or Rule 904 of Regulation S or pursuant to an effective registration
statement under the Securities Act.
5. Standstill Obligations. Each Purchaser hereby agrees with the
Company that, until five (5) years after the Closing Date, without the prior
written consent of the Company (which written consent the Company may decide
to give or withhold in its absolute discretion, provided that Company agrees
to consider in good faith a request made by such Purchaser soliciting that
the Company give such written consent), it will not directly or indirectly
(through an affiliate or otherwise) acquire beneficial ownership of any
shares of Common Stock of the Company, any securities convertible into,
exercisable for or exchangeable for shares of Common Stock of the Company, or
any other right to acquire shares of Common Stock, if the effect of such
acquisition would be to increase the aggregate number of shares of Common
Stock then beneficially owned (as such term is defined within the Exchange
Act and the rules and regulations promulgated by the SEC thereunder),
directly or indirectly, by such Purchaser to more than the number of Shares
being purchased by such Purchaser pursuant to this Agreement.
<PAGE>
CUSIP No. 0002296781 Page 17 of 48 Pages
6. Conditions Precedent.
6.1. Conditions to the Obligation of the Purchasers to Consummate the
Closing. The obligation of each Purchaser to consummate the Closing and to
purchase and pay for those Shares being purchased by it pursuant to this
Agreement is subject to the satisfaction of the following conditions
precedent:
(a) The representations and warranties contained herein of the
Company shall be true and correct on and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date (it being
understood and agreed by each Purchaser that, in the case of any
representation and warranty of the Company contained herein which is not
hereinabove qualified by application thereto of a materiality standard, such
representation and warranty need be true and correct only in all material
respects in order to satisfy as to such representation or warranty the
condition precedent set forth in the foregoing provisions of this Section
6.1(a)).
(b) The Registration Rights Agreement shall have been executed and
delivered by the Company.
(c) The Company shall not have been adversely affected in any
material way prior to the Closing Date; and the Company shall have performed
all obligations and conditions herein required to be performed or observed by
the Company on or prior to the Closing Date.
(d) No proceeding challenging this Agreement or the transactions
contemplated hereby, or seeking to prohibit, alter, prevent or materially
delay the Closing, shall have been instituted before any court, arbitrator or
governmental body, agency or official and shall be pending.
(e) The purchase of and payment for the Shares by the Purchasers
shall not be prohibited by any law or governmental order or regulation. All
necessary consents, approvals, licenses, permits, orders and authorizations
of, or registrations, declarations and filings with, any governmental or
administrative agency or of any other person with respect to any of the
transactions contemplated hereby shall have been duly obtained or made and
shall be in full force and effect.
(f) All instruments and corporate proceedings of the Company in
connection with the transactions contemplated by this Agreement to be
consummated at the Closing shall be satisfactory in form and substance to
such Purchaser, and such Purchaser shall have received copies (executed or
certified, as may be appropriate) of all documents which such Purchaser may
have reasonably requested in connection with such transactions.
<PAGE>
CUSIP No. 0002296781 Page 18 of 48 Pages
(g) The Purchasers shall have received from Bingham, Dana & Gould
LLP, counsel to the Company, an opinion addressed to them, dated the Closing
Date and substantially in the form of Exhibit C hereto.
(h) Each of the other Purchasers shall have purchased, in
accordance with this Agreement, the number of shares of Common Stock that
such other Purchaser has agreed to purchase pursuant to Section 2.1 hereof.
6.2. Conditions to the Obligation of the Company to Consummate the
Closing. The obligation of the Company to consummate the Closing and to
issue and sell to each of the Purchasers those of the Shares to be purchased
by it at the Closing is subject to the satisfaction of the following
conditions precedent:
(a) The representations and warranties contained herein of such
Purchaser shall be true and correct on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date (it being
understood and agreed by the Company that, in the case of any representation
and warranty of each Purchaser contained herein which is not hereinabove
qualified by application thereto of a materiality standard, such representa-
tion and warranty need be true and correct only in all material respects in
order to satisfy as to such representation or warranty the condition
precedent set forth in the foregoing provisions of this Section 6.2(a)).
(b) The Registration Rights Agreement shall have been executed and
delivered by each Purchaser.
(c) The Purchasers shall have performed all obligations and
conditions herein required to be performed or observed by the Purchasers on
or prior to the Closing Date.
(d) No proceeding challenging this Agreement or the transactions
contemplated hereby, or seeking to prohibit, alter, prevent or materially
delay the Closing, shall have been instituted before any court, arbitrator
or governmental body, agency or official and shall be pending.
(e) The sale of the Shares by the Company hereunder shall not be
prohibited by any law or governmental order or regulation. All necessary
consents, approvals, licenses, permits, orders and authorizations of, or
registrations, declarations and filings with, any governmental or
administrative agency or of any other person with respect to any of the
transactions contemplated hereby shall have been duly obtained or made and
shall be in full force and effect.
<PAGE>
CUSIP No. 0002296781 Page 19 of 48 Pages
(f) All instruments and corporate proceedings of each Purchaser in
connection with the transactions contemplated by this Agreement to be
consummated at the Closing shall be satisfactory in form and substance to the
Company, and the Company shall have received counterpart originals, or
certified or other copies of all documents, including without limitation
records of corporate or other proceedings, which it may have reasonably
requested in connection therewith.
7. Transfer, Legends.
7.1. Special Securities Law Transfer Restrictions.
(a) The Regulation S Shares shall be subject to the restrictions
on transfer set forth below in this Section 7.1(a). No Purchaser shall sell,
assign, pledge, transfer or otherwise dispose of any Regulation S Shares,
except (i) pursuant to an effective registration statement under the
Securities Act, (ii) in accordance with the provisions of Regulation S or
(iii) pursuant to an available exemption from registration under the
Securities Act and applicable state securities laws and, if requested by the
Company, upon delivery by such Purchaser of an opinion of counsel reasonably
satisfactory to the Company to the effect that the proposed transfer is
exempt from registration under the Securities Act and applicable state
securities law. Without limiting the generality of the provisions of the
immediately preceding sentence, each Purchaser hereby further agrees that
during the applicable Restricted Period (as defined in Regulation S), such
Regulation S Shares shall not be offered, sold, assigned, pledged,
transferred or otherwise disposed of to any U.S. Person or for the account or
benefit of any U.S. Person. Any sale, assignment, pledge, transfer or other
disposition of the Regulation S Shares in violation of this Section 7.1(a)
shall be null and void. The Company shall not register any sale, assignment,
pledge, transfer or other disposition of any of the Regulation S Shares in
violation of this Section 7.1(a).
(b) With respect to those Shares that are not Regulation S Shares,
no Purchaser shall sell, assign, pledge, transfer or otherwise dispose or
encumber any of such Shares, except (i) pursuant to an effective registration
statement under the Securities Act or (ii) pursuant to an available exemption
from registration under the Securities Act and applicable state securities
laws and, if requested by the Company, upon delivery by such Purchaser of an
opinion of counsel reasonably satisfactory to the Company to the effect that
the proposed transfer is exempt from registration under the Securities Act
and applicable state securities laws. Any transfer or purported transfer of
any of such Shares in violation of this Section 7.1(b) shall be void. The
Company shall not register any transfer of any of Shares in violation of this
Section 7.1(b).
<PAGE>
CUSIP No. 0002296781 Page 20 of 48 Pages
(c) The Company may, and may instruct any transfer agent for the
Company, to place such stop transfer orders as may be required on the
transfer books of the Company in order to ensure compliance with the
provisions of this Section 7.1.
7.2. Legends.
(a) Each certificate or other document evidencing any of the
Shares that are sold and/or issued by the Corporation in reliance on
Regulation S, as determined by the Corporation in its sole discretion, shall
be endorsed with the legends set forth below, and each Purchaser covenants
that, except to the extent such restrictions are waived by the Company, it
shall not transfer the shares represented by any such certificate without
complying with the restrictions on transfer described in this Agreement and
the legends endorsed on such certificate:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF IN THE UNITED STATES OR TO U.S. PERSONS, EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER SUCH
ACT, ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR UNLESS
AN EXEMPTION UNDER SUCH ACT IS THEN AVAILABLE AND, IF REQUESTED BY THE
COMPANY, UPON DELIVERY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY THAT THE PROPOSED TRANSFER IS EXEMPT UNDER SUCH ACT."
(b) Each certificate or other document evidencing any of the
Shares that are issued by the Company without relying on Regulation S, as
determined by the Company in its sole description, shall be endorsed with the
legends set forth below, and each Purchaser covenants that, except to the
extent such restrictions are waived by the Company, it shall not transfer the
shares represented by any such certificate without complying with the
restrictions on transfer described in this Agreement and the legends endorsed
on such certificate:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED, SOLD, ASSIGNED,
PLEDGED TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER SAID ACT AND, IF REQUESTED
BY THE COMPANY, UPON DELIVERY OF AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER IS EXEMPT FROM
SAID ACT."
<PAGE>
CUSIP No. 0002296781 Page 21 of 48 Pages
8. Termination; Liabilities Consequent Thereon. This Agreement may be
terminated and the transactions contemplated hereunder abandoned at any time
prior to the Closing only as follows:
(a) by the Purchasers, upon notice to the Company if the
conditions set forth in Section 6.1 shall not have been satisfied on or prior
to July 18, 1997; or
(b) by the Company, upon notice to the Purchasers if the
conditions set forth in Section 6.2 shall not have been satisfied on or prior
to July 18, 1997; or
(c) at any time by mutual agreement of the Company and the
Purchasers; or
(d) by the Purchasers, if there has been any breach of any
representation or warranty or any material breach of any covenant of the
Company contained herein and the same has not been cured within 30 days after
notice thereof (it being understood and agreed by each Purchaser that, in the
case of any representation or warranty of the Company contained herein which
is not hereinabove qualified by application thereto of a materiality
standard, such representation or warranty will be deemed to have been
breached for purposes of this Section 8(d) only if such representation or
warranty was not true and correct in all material respects at the time such
representation or warranty was made by the Company); or
(e) by the Company, if there has been any breach of any
representation, warranty or any material breach of any covenant of any
Purchaser contained herein and the same has not been cured within 30 days
after notice thereof (it being understood and agreed by the Company that, in
the case of any representation or warranty of any Purchaser contained herein
which is not hereinabove qualified by application thereto of a materiality
standard, such representation or warranty will be deemed to have been
breached for purposes of this Section 8(e) only if such representation or
warranty was not true and correct in all material respects at the time such
representation or warranty was made by such Purchaser).
Any termination pursuant to this Section 8 shall be without liability on the
part of any party, unless such termination is the result of a material breach
of this Agreement by a party to this Agreement in which case such breaching
party shall remain liable for such breach notwithstanding any termination of
this Agreement.
<PAGE>
CUSIP No. 0002296781 Page 22 of 48 Pages
9. Election of IBT Nominee to Board of Directors. The Company shall
take all steps as are necessary and appropriate and otherwise use its best
efforts to cause an individual designated by IBT (which designation shall be
made by IBT in accordance with the provisions set forth below in this Section
9) (such individual so initially designated by IBT, and each other
individual from time to time designated by IBT pursuant to, and in accordance
with, the provisions set forth below in this Section 9 in replacement of the
individual theretofore designated by IBT, being referred to herein as the
"IBT Nominee") to be duly and properly elected on the Closing Date to a seat
on the Board of Directors of the Company. Thereafter, until the Nomination
Termination Date (as defined below in this Section 9), at each annual or
special meeting of the stockholders of the Company, or in connection with any
written consent solicited from the stockholders of the Company, at or with
respect to which a vote is taken to elect a director to fill the seat
occupied by the IBT Nominee theretofore serving as a director of the Company
(whether upon the expiration of such IBT Nominee's term as a director of the
Company or otherwise), the Company shall nominate the IBT Nominee for
election to the Board of Directors.
Until the Nomination Termination Date, in the event that the individual
at anytime serving on the Board of Directors of the Company as the IBT
Nominee shall, for any reason, cease or be unable so to serve, the Company
shall take all steps as are necessary and appropriate and otherwise use its
best efforts to cause the vacancy on the Board of Directors of the Company
thereby created to be filled promptly by the election to the Board of
Directors of another IBT Nominee. The individual serving on the Board of
Directors of the Company as the IBT Nominee shall be entitled to
reimbursement of costs and expenses and payment of fees on terms no less
favorable than those available to other directors of the Company. In
addition, the individual serving on the Board of Directors of the Company as
the IBT Nominee shall be entitled to directors' insurance and indemnification
coverage on terms no less favorable than those available to other directors
of the Company.
Notwithstanding anything in this Section 9 to the contrary, without the
prior written consent of the Company, in no event shall IBT designate any
individual as the IBT Nominee if such individual is an officer, director,
employee, consultant or stockholder of (A) any business, person or entity
that is a competitor, vendor, supplier or customer of the Company or (B) any
Affiliate of such business, person or entity. Also notwithstanding anything
in this Section 9 to the contrary, in no event shall the Company be required
to nominate a specific individual for election to the Board of Directors of
the Company as the IBT Nominee or to otherwise
<PAGE>
CUSIP No. 0002296781 Page 23 of 48 Pages
take any steps or utilize any efforts to cause such individual to be elected
to the Board of Directors of the Company if the stockholders of the Company
do not vote or otherwise take action in favor of the reelection of such
individual to the Board of Directors of the Company, or vote or otherwise
take action to remove such individual as a director of the Company. The
foregoing sentence shall not relieve the Company's obligations under this
Section 9 with respect to any other individual that becomes the IBT Nominee.
The provisions of this Section 9 shall automatically terminate on the
Nomination Termination Date.
For purposes of this Section 9, the term "Nomination Termination Date"
shall mean the date on which IBT or any of its Affiliates ceases to own at
least seventy five percent (75%) of those Shares purchased by IBT, at the
Closing, pursuant to this Agreement (subject to proportionate adjustment
upon any stock split, stock dividend, reverse stock split or like event).
10. Miscellaneous Provisions.
10.1 Public Statements or Releases. None of the parties to this
Agreement shall make, issue, or release any announcement, whether to the
public generally, or to any of its employees, suppliers, or customers, with
respect to this Agreement or the transactions provided for herein, or make
any statement or acknowledgment of the existence of, or reveal the status of,
this Agreement or the transactions provided for herein, without the prior
consent of the other parties, which shall not be unreasonably withheld or
delayed, provided, that nothing in this Section 9.1 shall prevent any of the
parties hereto from making such public announcements as it may consider
necessary in order to satisfy its legal obligations, but to the extent not
inconsistent with such obligations, it shall provide the other parties with
an opportunity to review and comment on any proposed public announcement
before it is made.
10.2 Further Assurances. Each party agrees to cooperate fully with the
other party and to execute such further instruments, documents and agreements
and to give such further written assurances, as may be reasonably requested
by the other party to better evidence and reflect the transactions described
herein and contemplated hereby, and to carry into effect the intents and
purposes of this Agreement.
10.3 Rights Cumulative. Each and all of the various rights, powers and
remedies of the parties shall be considered to be cumulative with and in
addition to any other rights, powers and remedies which such parties may have
at law or in equity in the
<PAGE>
CUSIP No. 0002296781 Page 24 of 48 Pages
event of the breach of any of the terms of this Agreement. The exercise or
partial exercise of any right, power or remedy shall neither constitute the
exclusive election thereof nor the waiver of any other right, power or remedy
available to such party.
10.4 Pronouns. All pronouns or any variation thereof shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person, persons, entity or entities may require.
10.5 Notices.
(a) Any notices, reports or other correspondence (hereinafter
collectively referred to as "correspondence") required or permitted to be
given hereunder shall be sent by postage prepaid first class mail, courier or
telecopy or delivered by hand to the party to whom such correspondence is
required or permitted to be given hereunder. The date of giving any notice
shall be the date of its actual receipt.
(b) All correspondence to the Company shall be addressed as follows:
Cubist Pharmaceuticals, Inc.
24 Emily Street
Cambridge, MA 02139
Attention: Scott M. Rocklage,
President and Chief Executive Officer
Telecopier: (617) 576-0232
with a copy to:
Bingham, Dana & Gould LLP
150 Federal Street
Boston, Massachusetts 02110
Attention: Julio E. Vega, Esq.
Telecopier: (617) 951-8736
(c) All correspondence to any Purchaser shall be sent to such Purchaser
at the address set forth in Exhibit A.
with a copy to:
Reboul, MacMurray, Hewitt, Maynard & Kristol
45 Rockefeller Plaza
New York, New York 10111
Attention: Charles D. Uniman, Esq.
Telecopier: (212) 841-5725
(d) Any entity may change the address to which correspondence to it is
to be addressed by notification as provided for herein.
<PAGE>
CUSIP No. 0002296781 Page 25 of 48 Pages
10.6 Captions. The captions and paragraph headings of this Agreement
are solely for the convenience of reference and shall not affect its
interpretation.
10.7 Severability. Should any part or provision of this Agreement be
held unenforceable or in conflict with the applicable laws or regulations of
any jurisdiction, the invalid or unenforceable part or provisions shall be
replaced with a provision which accomplishes, to the extent possible, the
original business purpose of such part or provision in a valid and
enforceable manner, and the remainder of this Agreement shall remain binding
upon the parties hereto.
10.8 Governing Law; Injunctive Relief.
(a) This Agreement shall be governed by and construed in accordance
with the internal and substantive laws of the Commonwealth of Massachusetts
and without regard to any conflicts of laws concepts which would apply the
substantive law of some other jurisdiction.
(b) Each of the parties hereto acknowledges and agrees that damages
will not be an adequate remedy for any material breach or violation of this
Agreement if such material breach or violation would cause immediate and
irreparable harm (an "Irreparable Breach"). Accordingly, in the event of a
threatened or ongoing Irreparable Breach, each party hereto shall be entitled
to seek, in any state or federal court in the Commonwealth of Massachusetts,
equitable relief of a kind appropriate in light of the nature of the ongoing
or threatened Irreparable Breach, which relief may include, without
limitation, specific performance or injunctive relief; provided, however,
that if the party bringing such action is unsuccessful in obtaining the
relief sought, the moving party shall pay the non-moving party's reasonable
costs, including attorney's fees, incurred in connection with defending such
action. Such remedies shall not be the parties' exclusive remedies, but
shall be in addition to all other remedies provided in this Agreement.
10.9 Waiver. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be, or be construed as, a further or continuing waiver of
any such term, provision or condition or as a waiver of any other term,
provision or condition of this Agreement.
10.10 Expenses. Each party will bear its own costs and expenses in
connection with this Agreement.
<PAGE>
CUSIP No. 0002296781 Page 26 of 48 Pages
10.11 Assignment. The rights and obligations of the parties hereto
shall inure to the benefit of and shall be binding upon the authorized
successors and permitted assigns of each party. Neither party may assign its
rights or obligations under this Agreement or designate another person (i) to
perform all or part of its obligations under this Agreement or (ii) to have
all or part of its rights and benefits under this Agreement, in each case
without the prior written consent of the other party, except, solely in the
case of parties to this Agreement other than the Company, to an Affiliate or
to a successor of the business, by merger or otherwise, to which this
Agreement relates, provided that in the case of an assignment to an Affiliate
the assigning party shall promptly notify the other party in writing of such
assignment and shall remain liable (both directly and as guarantor) with
respect to all obligations so assigned. In the event of any assignment or in
the event that an Affiliate of either party shall exercise rights and/or
perform obligations hereunder pursuant to the terms of this Agreement, the
assignee or Affiliate, as the case may be, shall specifically assume and be
bound by the provisions of the Agreement by executing and agreeing to an
assumption agreement reasonably acceptable to the other party.
10.12 Survival. The respective representations and warranties given
by the parties hereto, and the other covenants and agreements contained
herein, shall survive the Closing Date and the consummation of the
transactions contemplated herein for a period of two years, without regard to
any investigation made by any party.
10.13 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto respecting the subject matter hereof and
supersedes all prior agreements, negotiations, understandings,
representations and statements respecting the subject matter hereof, whether
written or oral. No modification, alteration, waiver or change in any of the
terms of this Agreement shall be valid or binding upon the parties hereto
unless made in writing and duly executed by the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
CUSIP No. 0002296781 Page 27 of 48 Pages
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year first above written.
CUBIST PHARMACEUTICALS, INC.
By:__________________________________
Name: Scott M. Rocklage
Title: President and Chief Executive
Officer
PURCHASERS:
INTERNATIONAL BIOTECHNOLOGY
TRUST plc
By:_________________________________
Name:
Title:
<PAGE>
CUSIP No. 0002296781 Page 28 of 48 Pages
Exhibit A to Stock Purchase Agreement
_____________________________________
Total Amount
Name and Address of Purchasers of Investment
______________________________ _____________
International Biotechnology Trust plc $5,000,000.875
Five Arrows House
St. Swithin's lane
London EC4N 8NR
England
<PAGE>
CUSIP No. 0002296781 Page 29 of 48 Pages
EXHIBIT B
_________
CUBIST PHARMACEUTICALS, INC.
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of July
18, 1997 by and among (i) Cubist Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), (ii) each person listed on Exhibit A attached
hereto (collectively, the "Initial Investors" and each individually, an
"Initial Investor"), and (iii) each person or entity that subsequently
becomes a party to this Agreement upon the due execution and delivery by
such person or entity and the Company of an Instrument of Adherence in the
form of Exhibit B attached hereto (collectively, the "Investor Transferees"
and each individually an "Investor Transferee").
W I T N E S S E T H:
WHEREAS, the Company has agreed to issue and sell to the Initial
Investors, and the Initial Investors have agreed to purchase from the
Company, shares of the Company's common stock, $0.001 par value per share
(the "Common Stock"), all upon the terms and conditions set forth in that
certain Stock Purchase Agreement, dated of even date herewith, between the
Company and the Initial Investors (the "Stock Purchase Agreement"); and
WHEREAS, the terms of the Stock Purchase Agreement provide that it shall
be a condition precedent to the closing of the transactions thereunder, for
the Company and the Initial Investors to execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
1. DEFINITIONS. The following terms shall have the meanings provided
therefor below or elsewhere in this Agreement as described below:
<PAGE>
CUSIP No. 0002296781 Page 30 of 48 Pages
"Board" shall mean the board of directors of the Company.
"Closing" shall have the meaning ascribed to such term in the Stock Purchase
Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Investors" shall mean, collectively, the Initial Investors and the Investor
Transferees, so long as they are holders of any of the Shares.
"Majority Holders" shall mean, at the relevant time of reference thereto,
those Investors holding more than fifty percent (50%) of the Registrable
Shares held by all of the Investors at such time.
"Qualifying Holder" shall have the meaning ascribed thereto in Section 13
hereof.
"Registrable Shares" shall mean the Shares; provided, however, that the term
"Registrable Shares" shall not include (A) any of the Shares that become
eligible for resale pursuant to Rule 144 or (B) any of the Shares that become
eligible for resale pursuant to Regulation S (it being understood and agreed
that any controversy, disagreement or issue between the Company and any
Purchaser as to whether any of the Shares has become eligible for resale
pursuant to Regulation S will be conclusively resolved in the manner
determined by counsel for such Purchaser (which counsel must be experienced
in U.S. securities law matters and must be reasonably satisfactory to the
Company; it being agreed that Reboul, MacMurray, Hewitt, Maynard & Kristol
shall be deemed to be counsel satisfactory to the Company) in a written legal
opinion satisfactory only to such Purchaser, but addressed and delivered to
such Purchaser and the Company (it being understood that the Company may rely
on such opinion)).
"Regulation S" shall mean Regulation S promulgated under the Securities Act
and any successor or substitute regulation, law or provision.
<PAGE>
CUSIP No. 0002296781 Page 31 of 48 Pages
"Rule 144" shall mean Rule 144 promulgated under the Securities Act and any
successor or substitute rule, law or provision.
"SEC" shall mean the Securities and Exchange Commission.
"Section 2 Registration Termination Date" shall mean the first date after the
effective date of the Mandatory S-1 Registration Statement on which neither
the Mandatory S-1 Registration Statement (as defined in Section 2(a) hereof)
nor the Mandatory S-3 Registration Statement (as defined in Section 2(b)
hereof) shall be in effect.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares" shall mean those shares of Common Stock purchased by the Initial
Investors from the Company pursuant to the Stock Purchase Agreement.
2. MANDATORY REGISTRATION.
(a) Within thirty (30) days after the date hereof, the Company will
prepare and file with the SEC a registration statement on Form S-1 for the
purpose of registering under the Securities Act all of the Registrable Shares
for resale by, and for the account of, the Initial Investors as selling
stockholders thereunder (the "Mandatory S-1 Registration Statement"). The
Mandatory S-1 Registration Statement shall permit the Initial Investors to
offer and sell, on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act, any or all of the Registrable Shares. The Company agrees
to use commercially reasonable efforts to cause the Mandatory S-1
Registration Statement to become effective as soon as practicable. The
Company shall only be required to keep the Mandatory S-1 Registration
Statement effective until the earlier of (i) the date when all of the
Registrable Shares registered thereunder shall have been sold, (ii) the date
on which the Mandatory S-1 Registration Statement is converted into a
registration statement on Form S-3 pursuant to Section 2(b) below or (iii)
the first anniversary of the Closing.
<PAGE>
CUSIP No. 0002296781 Page 32 of 48 Pages
Thereafter, the Company shall be entitled to withdraw the Mandatory S-1
Registration Statement and the Initial Investors shall have no further right
to offer or sell any of the Registrable Shares pursuant to the Mandatory S-1
Registration Statement (or any prospectus relating thereto).
(b) At any time from and after the date that the Company shall have
become eligible to file and use a registration statement on Form S-3, the
Company shall be entitled to convert the Mandatory S-1 Registration Statement
into a registration statement on Form S-3 (the "Mandatory S-3 Registration
Statement"). The Mandatory S-3 Registration Statement shall permit the
Initial Investors to offer and sell as selling stockholders, on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act, any or all of
the Registrable Shares that were not previously sold pursuant to the
Mandatory S-1 Registration Statement. The Company shall only be required to
keep the Mandatory S-3 Registration Statement effective until the earlier of
(i) the date when all of the Registrable Shares registered thereunder shall
have been sold or (ii) the first anniversary of the Closing. Thereafter, the
Company shall be entitled to withdraw the Mandatory S-3 Registration
Statement and the Initial Investors shall have no further right to offer or
sell any of the Registrable Shares pursuant to the Mandatory S-3 Registration
Statement (or any prospectus relating thereto).
(c) The right of the Initial Investors to offer or sell any of the
Registrable Shares pursuant to the Mandatory S-1 Registration Statement (or
any prospectus relating thereto) shall be suspended during the period
commencing on the date the Company sends written notice to the Initial
Investors informing them that it will begin the process of converting the
Mandatory S-1 Registration Statement into the Mandatory S-3 Registration
Statement pursuant to Section 2(b) above and ending as soon as practicable
but in no event later than forty five (45) days thereafter, unless within
such forty-five day period the Mandatory S-1 Registration Statement shall
have been converted into the Mandatory S-3 Registration Statement, in which
case the right of the Initial Investors to sell any of the Registrable Shares
pursuant to the Mandatory S-1
<PAGE>
CUSIP No. 0002296781 Page 33 of 48 Pages
Registration Statement (or any prospectus relating thereto) shall forever
terminate. The limitations imposed by the immediately preceding sentence on
the rights of the Initial Investors to sell any of the Registrable Shares
pursuant to the Mandatory S-1 Registration Statement (or any prospectus
relating thereto) shall be in addition to, and not in lieu of, the
limitations imposed by Section 2(a) and Section 5(d) hereof on such rights.
(d) No registration under this Section 2, whether pursuant to the
Mandatory S-1 Registration Statement or the Mandatory S-3 Registration
Statement, shall be underwritten unless the Company shall otherwise elect in
its sole and absolute discretion.
3. "PIGGYBACK REGISTRATION". If, at any time after the Section 2
Registration Termination Date, the Company proposes to register any of its
Common Stock under the Securities Act, whether as a result of a primary or
secondary offering of Common Stock or pursuant to registration rights granted
to holders of other securities of the Company (but excluding in all cases any
registration pursuant to Sections 2 or 4 hereof or any registrations to be
effected on Forms S-4 or S-8 or other applicable successor Forms), the
Company shall, each such time, give to the Investors written notice of its
intent to do so. Upon the written request of any Investor given within 30
days after the giving of any such notice by the Company, the Company shall
use commercially reasonable efforts to cause to be included in such
registration the Registrable Shares of such selling Investor, to the extent
requested to be registered; provided that (i) the number of Registrable
Shares proposed to be sold by such selling Investor is equal to at least ten
percent (10%) of the total number of Registrable Shares then held by such
selling Investor, (ii) such selling Investor agrees to sell those of its
Registrable Shares to be included in such registration in the same manner and
on the same terms and conditions as the other shares of Common Stock which
the Company proposes to register, and (iii) if the registration is to include
shares of Common Stock to be sold for the account of the Company, the
proposed managing underwriter does not advise the Company that in its opinion
the
<PAGE>
CUSIP No. 0002296781 Page 34 of 48 Pages
inclusion of such selling Investor's Registrable Shares (without any
reduction in the number of shares to be sold for the account of the Company)
is likely to affect adversely the success of the offering or the price the
Company would receive for any shares of Common Stock offered by it pursuant
thereto, in which case the rights of such selling Investor shall be as
provided in Section 8 hereof.
4. FORM S-3 REGISTRATION.
(a) Registration Upon Request; Limitations. In the event that, at any time
or from time to time after the Section 2 Registration Termination Date, the
Company shall receive from any Investor or Investors a written request or
requests that the Company effect a registration on Form S-3, or any
successor or substitute form, with respect to all or a part of the
Registrable Shares owned by such Investor or Investors, then the Company will
promptly give written notice of the proposed registration and the Investor's
or Investors' request therefor to all other Investors, and, as soon as
practicable, use commercially reasonable efforts to effect such registration
of all or such portion of such Investor's or Investors' Registrable Shares as
are specified in such request, together with all or such portion of the
Registrable Shares of any other Investor or Investors joining in such request
as are specified in a written request given within twenty (20) days after
receipt of such written notice from the Company; provided, however, that the
Company shall have no obligation under this Section 4(a) to effect any
registration requested by any Investor or Investors if the Company has
previously given a notice of the type specified in Section 3 hereof or this
Section 4(a) and the Company is, at the time such registration is requested
by such Investor or Investors, continuing to pursue the registration referred
to in such notice or if the registration referred to in such notice is then
effective; and provided, further, that the obligations of the Company under
this Section 4(a) shall be subject to the limitations set forth in Sections
4(c), 4(d) and 4(e) below. The Company may include in any registration
pursuant to Section 4(a) hereof additional shares of Common Stock for sale
for its own account or for the account of any other person.
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CUSIP No. 0002296781 Page 35 of 48 Pages
No registration under this Section 4(a) shall be underwritten unless the
Company shall otherwise elect in its sole and absolute discretion.
(b) Selection of Underwriters. If a registration pursuant to Section 4(a)
hereof involves an underwritten offering, the underwriter or underwriters
thereof shall be selected by the Company.
(c) Limitation on Number of Registrations. The Company shall not be
required to effect more than three (3) registrations during any calendar year
pursuant to the provisions of Section 4(a) hereof.
(d) Limitation on Company's Obligation. Notwithstanding anything in this
Section 4 to the contrary, but in all events subject to the provisions of
Section 4(f) hereof, the Company shall not be obligated to effect any
registration pursuant to this Section 4:
(1) if such Investor or Investors request registration
pursuant to this Section 4 at any time prior to the Section 2 Registration
Termination Date;
(2) if Form S-3, or any successor or substitute form, is not
then available for the registration of such Registrable Shares proposed to be
sold and distributed by such Investor or Investors;
(3) if such Investor or Investors, together with the holders
of any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Shares and such other securities
(if any) at an aggregate price to the public of less than $1,000,000; or
(4) if the Company shall furnish to the Investors a
certificate signed by the President and Chief Executive Officer of the
Company stating that the Board has made the good faith determination that a
registration would require premature disclosure of material, nonpublic
information concerning the Company, its business or prospects, that
<PAGE>
CUSIP No. 0002296781 Page 36 of 48 Pages
such premature disclosure would be materially adverse to the Company and that
it is therefore essential to defer such registration, then the Company shall
have the right to defer such registration for a period of not more than 90
days after receipt of the request from such Investors; provided, however,
that the Company may not utilize this right more than once with respect to
each registration made pursuant to, and in accordance with, Section 4(a)
hereof and provided, further, however, that each and every person or entity
(other than the Purchasers) which is entitled to exercise registration rights
with respect to any equity securities of the Company is subject to
obligations of the kind contemplated by this Section 4(d)(4) which are at
least as burdensome as those provided in this Section 4(d)(4).
(e) Limitation on Requests. Notwithstanding anything in this Section 4 to
the contrary, no Investor may request a registration pursuant to this Section
4 within ninety (90) days of the effective date of any other registration
statement filed by the Company with the SEC pursuant to this Section 4.
(f) Unavailability for Form S-3. Notwithstanding anything to the contrary
expressed or implied in this Agreement, if Form S-3 or any substitute form is
not then available for the registration of such Registrable Shares that would
otherwise have been proposed to be sold and distributed by such Investor or
Investors pursuant to this Section 4, the Company shall be obligated to
prepare and file a registration statement on Form S-1 at the written request
or requests from any Investor or Investors given in accordance with Section
4(a) and the provisions of this Section 4 (other than Section 4(d)(2)) shall
govern and apply to such request or requests and such registration on Form S-
1.
5. OBLIGATIONS OF THE COMPANY. Whenever the Company is required under
Section 2, 3 or 4 hereof to use commercially reasonable efforts to effect the
registration of any of the Registrable Shares of the Investors, the Company
shall, as expeditiously as reasonably possible:
<PAGE>
CUSIP No. 0002296781 Page 37 of 48 Pages
(a) Prepare (and afford counsel to the selling Investors reasonable
opportunity to review and comment) and file with the SEC a registration
statement with respect to such Registrable Shares and use commercially
reasonable efforts to cause such registration statement to become and remain
effective; provided, however that, except to the extent otherwise provided in
Section 2 hereof, the Company shall in no event be obligated to cause any
such registration to remain effective for more than 90 days;
(b) Prepare (and afford counsel to the selling Investors reasonable
opportunity to review and comment thereon) and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Shares covered by such registration statement;
(c) Furnish to the selling Investors such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Securities Act, and such other documents (including, without limitation,
prospectus amendments and supplements as are prepared by the Company in
accordance with Section 5(d) below) as the selling Investors may reasonably
request in order to facilitate the disposition of such Registrable Shares;
(d) Notify the Investors, at any time when a prospectus relating to such
registration statement is required to be delivered under the Securities Act,
of the happening of any event as a result of which the prospectus included
in or relating to such registration statement contains an untrue statement of
a material fact or omits any fact necessary to make the statements therein
not misleading; and, thereafter, the Company will promptly prepare (and, when
completed, give notice to each Investor) a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Shares, such prospectus will not contain an untrue statement of
a material fact or omit to state any fact necessary to make the statements
therein not misleading; provided that upon such notification by the Company,
the Investors will not offer or sell Registrable Shares until the
<PAGE>
CUSIP No. 0002296781 Page 38 of 48 Pages
Company has notified the Investors that it has prepared a supplement or
amendment to such prospectus and delivered copies of such supplement or
amendment to the Investors (it being understood and agreed by the Company
that the foregoing proviso shall in no way diminish or otherwise impair the
Company's obligation to promptly prepare a prospectus amendment or supplement
as above provided in this Section 5(d) and deliver copies of same as above
provided in Section 5(c) hereof); and
(e) Use commercially reasonable efforts to register and qualify such
Registrable Shares under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably appropriate in the opinion of the
Company and the managing underwriters, provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such
states or jurisdictions, and provided further that (notwithstanding anything
in this Agreement to the contrary with respect to the bearing of expenses) if
any jurisdiction in which the Registrable Shares shall be qualified shall
require that expenses incurred in connection with the qualification therein
of the securities be borne by selling shareholders, then the selling
Investors shall, to the extent required by such jurisdiction, pay their pro
rata share of selling expenses.
6. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the selling Investors shall furnish to the Company such information regarding
them and the securities of the Company held by them as the Company shall
reasonably request and as shall be required in order to effect any
registration by the Company pursuant to this Agreement.
7. EXPENSES OF REGISTRATION. All expenses incurred in connection with a
registration pursuant to this Agreement (excluding underwriting commissions
and discounts and counsel fees of the selling Investors), including without
limitation all registration and qualification fees, printing, and fees and
disbursements of counsel for the Company, shall be borne
<PAGE>
CUSIP No. 0002296781 Page 39 of 48 Pages
by the Company; provided, however, that the Investors participating as
selling shareholders in the second or third registration pursuant to Section
4 hereof during any calendar year shall pay all expenses incurred in
connection with such registration(s) on a pro rata basis in accordance with
the number of Registrable Shares which are included in such registration(s)
by such Investors thereunder; and provided, further, that the Investors
participating as selling shareholders in any registration(s) on Form S-1
pursuant to Section 4(f) hereof shall pay one-half of the expenses incurred
in connection with such registration(s) and the Company shall pay the other
half of such expenses.
8. UNDERWRITING REQUIREMENTS; REDUCTION OF SHARES TO BE INCLUDED IN A
REGISTRATION. In connection with any offering involving an underwriting of
shares being issued by the Company, the Company shall not be required under
Section 3 hereof or otherwise to include the Registrable Shares of any
Investor therein unless such Investor accepts and agrees to the terms of the
underwriting as agreed upon between the Company and the underwriters selected
by the Company, and then only in such quantity as (without any reduction in
the numbers of shares to be sold for the account of the Company) will not, in
the opinion of the underwriters, jeopardize the success of the offering by
the Company. If the total number of shares of stock which all selling
stockholders of the Company (including, without limitation, the selling
Investors) request to be included in any offering exceeds the number of
shares which the underwriters believe to be compatible with the success of
the offering, the Company shall only be required to include in the offering
so many of the shares of stock of the selling shareholders (including,
without limitation, the selling Investors) as the underwriters believe will
not (without any reduction in the number of shares to be sold for the account
of the Company) jeopardize the success of the offering (the shares so
included to be apportioned pro rata among the selling shareholders according
to the total number of shares of Common Stock owned by said selling
shareholders, or in such other proportions as shall mutually be agreed to by
such selling shareholders).
<PAGE>
CUSIP No. 0002296781 Page 40 of 48 Pages
9. DELAY OF REGISTRATION. The Investors shall not take any action to
restrain, enjoin or otherwise delay any registration as the result of any
controversy which might arise with respect to the interpretation or
implementation of this Agreement.
10. INDEMNIFICATION. In the event that any Registrable Shares of the
Investors are included in a registration statement pursuant to this
Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each selling Investor, any underwriter (as defined in the Securities
Act) for the Company, and each officer and director of such selling Investor
or such underwriter and each person, if any, who controls such selling
Investor or such underwriter within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to
which they may become subject under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading;
and will reimburse such selling Investor, such underwriter or such officer,
director or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action if it is judicially determined that there
were material misstatements or omission; provided, however, that the
indemnity agreement contained in this Section 10(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, damage, liability or action to the
extent that it arises out of or is based upon an untrue
<PAGE>
CUSIP No. 0002296781 Page 41 of 48 Pages
statement or alleged untrue statement or omission made in connection with
such registration statement, preliminary prospectus, final prospectus, or
amendments or supplements thereto, in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by the selling Investors, any underwriter for them or
controlling person with respect to them.
(b) To the extent permitted by law, each selling Investor will indemnify and
hold harmless the Company, each of its directors, each of its officers who
have signed such registration statement, each person, if any, who controls
the Company within the meaning of the Securities Act, any underwriter for the
Company (within the meaning of the Securities Act), and all other selling
Investors against any losses, claims, damages or liabilities to which the
Company or any such director, officer, controlling person, or underwriter may
become subject to, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise
out of or are based upon any untrue or alleged untrue statement of any
material fact contained in such registration statement, including any
preliminary prospectus contained therein or any amendments or supplements
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in such registration statement, preliminary prospectus,
final prospectus, or amendments or supplements thereto, in reliance upon and
in conformity with written information furnished by the selling Investor
expressly for use in connection with such registration; and such selling
Investor will reimburse any legal or other expenses reasonably incurred by
the Company or any such director, officer, controlling person, underwriter or
other selling Investor in connection with investigating or defending any such
loss, claim, damage, liability or action if it is judicially determined that
there were material misstatements or omissions, provided, however, that the
liability of each selling Investor hereunder shall be limited to the proceeds
<PAGE>
CUSIP No. 0002296781 Page 42 of 48 Pages
(net of underwriting discounts and commissions, if any) received by such
selling Investor from the sale of Registrable Shares covered by such
registration statement, and provided, further, however, that the indemnity
agreement contained in this Section 10(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of those selling Investor(s)
against which the request for indemnity is being made (which consent shall
not be unreasonably withheld).
(c) Promptly after receipt by an indemnified party under this Section 10 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under
this Section 10, notify the indemnifying party in writing of the commencement
thereof and the indemnifying party shall have the right to participate in
and, to the extent the indemnifying party desires, jointly with any other
indemnifying party similarly noticed, to assume at its expense the defense
thereof with counsel mutually satisfactory to the parties. The failure to
notify an indemnifying party promptly of the commencement of any such action,
if prejudicial to his ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
Section 10, but the omission so to notify the indemnifying party will not
relieve him of any liability which he may have to any indemnified party
otherwise other than under this Section 10.
11. REPORTS UNDER THE EXCHANGE ACT. With a view to making available to
the Investors the use of Section 4 hereof and the benefits of Rule 144 and
any other rule or regulation of the SEC that may at any time permit the
Investors to sell the Shares to the public without registration, the Company
agrees to use commercially reasonable efforts: (i) to make and keep public
information available, as those terms are understood and defined in the
General Instructions to Form S-3, or any successor or substitute form, and in
Rule 144, (ii) to file with the SEC in a timely manner all reports and other
documents required to be filed by an issuer of securities registered under
the Securities Act or the Exchange Act, (iii) as long as any Investor owns
any Shares, to furnish in writing
<PAGE>
CUSIP No. 0002296781 Page 43 of 48 Pages
upon such Investor's request a written statement by the Company that it has
complied with the reporting requirements of Rule 144 and of the Securities
Act and the Exchange Act, and to furnish to such Investor a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents so filed by the Company as may be reasonably requested in availing
such Investor of any rule or regulation of the SEC permitting the selling of
any such Shares without registration and (iv) undertake any additional
actions reasonably necessary to maintain the availability of a registration
statement on Form S-3, including any successor or substitute forms, or the
use of Rule 144.
12. LOCKUP AGREEMENT. Each Investor which, together with its affiliates,
holds or owns (at the time of the written request of the Company or managing
underwriter referred to below in this Section 12 or at any time during the
180 day period commencing on the effective date of the registration statement
relating to such underwritten public offering of the Company's securities) of
record or beneficially (within the meaning of Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder) five percent (5%)
or more of the then issued and outstanding shares of common stock of the
Company hereby agrees that, at the written request of the Company or any
managing underwriter of any underwritten public offering of securities of the
Company, such Investor shall not, without the prior written consent of the
Company or such managing underwriter, sell, make any short sale of, loan,
grant any option for the purchase of, pledge, encumber, or otherwise dispose
of, or exercise any registration rights with respect to, any Shares during
the 180 day period commencing on the effective date of the registration
statement relating to such underwritten public offering of the Company's
securities.
13. TRANSFER OF REGISTRATION RIGHTS. None of the rights of any Investor
under this Agreement shall be transferred or assigned to any person unless
(i) such person is a Qualifying Holder (as defined below), and (ii) such
person agrees to become a party to, and bound by, all of the terms and
conditions of, this Agreement by duly executing and delivering to the Company
an Instrument of Adherence in the form attached
<PAGE>
CUSIP No. 0002296781 Page 44 of 48 Pages
as Exhibit B hereto. For purposes of this Section 13, the term "Qualifying
Holder" shall mean, with respect to any Investor, (i) any partner thereof,
(ii) any corporation or partnership controlling, controlled by, or under
common control with, such Investor or any partner thereof, or (iii) any other
direct transferee of at least 250,000 (subject to proportionate adjustment
upon the occurrence of any stock split, stock dividend or reverse stock split
of the Common Stock) Registrable Shares from such Investor. Notwithstanding
anything in this Section 13 to the contrary, none of the rights or
obligations of any Investor under this Agreement shall be transferred,
assigned or delegated to any direct transferee of Registrable Shares from
such Investor if and to the extent that the transfer of such Registrable
Shares was effected pursuant to a "broker's transaction" within the meaning
of Rule 144.
14. ENTIRE AGREEMENT. This Agreement constitutes and contains the entire
agreement and understanding of the parties with respect to the subject matter
hereof, and it also supersedes any and all prior negotiations,
correspondence, agreements or understandings with respect to the subject
matter hereof.
15. MISCELLANEOUS.
(a) This Agreement may not be amended, modified or terminated, and
no rights or provisions may be waived, except with the written consent of the
Majority Holders and the Company.
(b) This Agreement shall be governed by and construed and enforced
in accordance with the laws of the Commonwealth of Massachusetts, and shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors or assigns, provided
that the terms and conditions of Section 13 hereof are satisfied. This
Agreement shall also be binding upon and inure to the benefit of any
transferee of any of the Shares provided that the terms and conditions of
Section 13 hereof are satisfied. Notwithstanding anything in this Agreement
to
<PAGE>
CUSIP No. 0002296781 Page 45 of 48 Pages
the contrary, if at any time any Investor shall cease to own any Shares, all
of such Investor's rights under this Agreement shall immediately terminate.
(c) Any notices to be given pursuant to this Agreement shall be in
writing and shall be given by certified or registered mail, return receipt
request. Notices shall be deemed given when personally delivered or when
mailed to the addresses of the respective parties as set forth on Exhibit A
hereto, or to such changed address of which any party may notify the others
pursuant hereto, except that a notice of change of address shall be deemed
given when received.
(d) The parties acknowledge and agree that in the event of any
breach of this Agreement, remedies at law will be inadequate, and each of the
parties hereto shall be entitled to specific performance of the obligations
of the other parties hereto and to such appropriate injunctive relief as may
be granted by a court of competent jurisdiction.
(e) This Agreement may be executed in a number of counterparts, an
of which together shall for all purposes constitute one Agreement, binding on
all the parties hereto notwithstanding that all such parties have not signed
the same counterpart.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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CUSIP No. 0002296781 Page 46 of 48 Pages
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
CUBIST PHARMACEUTICALS, INC.
By: ______________________________
Scott M. Rocklage, President
INITIAL INVESTORS
INTERNATIONAL BIOTECHNOLOGY
TRUST plc
By: _____________________________
Name:
Title:
<PAGE>
CUSIP No. 0002296781 Page 47 of 48 Pages
Exhibit A to Registration Rights Agreement
__________________________________________
Name and Address of Initial Investors
_____________________________________
International Biotechnology Trust plc
Five Arrows House
St. Swithin's Lane
London EC4N 8NR
England
<PAGE>
CUSIP No. 0002296781 Page 48 of 48 Pages
Exhibit B to Registration Rights Agreement
__________________________________________
CUBIST PHARMACEUTICALS, INC.
Instrument of Adherence
_______________________
Reference is hereby made to that certain Registration Rights Agreement,
dated as of July [__], 1997, among Cubist Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), the Initial Investors and the Investor
Transferees, as amended and in effect from time to time (the "Registration
Rights Agreement"). Capitalized terms used herein without definition shall
have the respective meanings ascribed thereto in the Registration Rights
Agreement.
The undersigned, in order to become the owner or holder of [___________]
shares of common stock, par value $0.001 per share (the "Common Stock"), of
the Company], hereby agrees that, from and after the date hereof, the
undersigned has become a party to the Registration Rights Agreement in the
capacity of an Investor Transferee, and is entitled to all of the benefits
under, and is subject to all of the obligations, restrictions and
limitations set forth in, the Registration Rights Agreement that are
applicable to Investor Transferees. This Instrument of Adherence shall
take effect and shall become a part of the Registration Rights Agreement
immediately upon execution.
Executed under seal as of the date set forth below under the laws of the
Commonwealth of Massachusetts.
Signature:________________________
Accepted:
CUBIST PHARMACEUTICALS, INC.
By:_______________________
Date:_____________________
