<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 29, 1997
REGISTRATION NO. 333-05369
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 8
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PROGENITOR, INC.
(Exact name of Registrant as specified in its charter)
------------------------
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<S> <C> <C>
DELAWARE 2836 31-1344193
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification
organization) Number)
</TABLE>
------------------------
1507 CHAMBERS ROAD
COLUMBUS, OHIO 43212
(614) 488-6688
(Address and telephone number of Registrant's principal executive offices)
------------------------
DOUGLASS B. GIVEN, M.D., PH.D.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PROGENITOR, INC.
1507 CHAMBERS ROAD
COLUMBUS, OHIO 43212
(614) 488-6688
(Name, address and telephone number of agent for service for Registrant)
------------------------
COPIES TO:
<TABLE>
<S> <C>
GAVIN B. GROVER, ESQ. CHARLES W. MULANEY, JR., ESQ.
KRISTIAN E. WIGGERT, ESQ. RODD M. SCHREIBER, ESQ.
EDA S.L. TAN, ESQ. SKADDEN, ARPS, SLATE,
MORRISON & FOERSTER LLP MEAGHER & FLOM (ILLINOIS)
425 MARKET STREET 333 WEST WACKER DRIVE
SAN FRANCISCO, CALIFORNIA 94105 CHICAGO, ILLINOIS 60606
(415) 268-7000 (312) 407-0700
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the Registration Statement becomes effective.
------------------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE>
EXPLANATORY NOTE
This Amendment No. 8 to the Registration Statement is being filed solely for
the purpose of filing Exhibits 10.23 and 10.24 to the Registration Statement.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses, other than underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of the Securities being registered. All the amounts shown are estimates except
for the SEC registration fee, the NASD filing fee and the Nasdaq listing fee.
<TABLE>
<S> <C>
SEC Registration Fee............................................ $ 31,183
NASD Filing Fee................................................. 10,276
Nasdaq National Market Listing Fee.............................. 50,000
Printing and engraving expenses................................. 250,000
Legal fees and expenses......................................... 400,000
Accounting fees and expenses.................................... 250,000
Transfer agent and registrar fees............................... 5,000
Miscellaneous................................................... 3,541
---------
Total....................................................... $1,000,000
---------
---------
</TABLE>
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* To be supplied by amendment.
ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 ("Section 145") of the Delaware General Corporation Law ("DGCL")
provides a detailed statutory framework covering indemnification of officers and
directors against liabilities and expenses arising out of legal proceedings
brought against them by reason of their being or having been directors or
officers. Section 145 generally provides that a director or officer of a
corporation (i) shall be indemnified by the corporation for all expenses of such
legal proceedings when he is successful on the merits, (ii) may be indemnified
by the corporation for the expenses, judgments, fines and amounts paid in
settlement of such proceedings (other than a derivative suit), even if he is not
successful on the merits, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful, and (iii) may be
indemnified by the corporation for the expenses of a derivative suit (a suit by
a stockholder alleging a breach by a director or officer of a duty owed to the
corporation), even if he is not successful on the merits, if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation. No indemnification may be made under clause (iii)
above, however, if the director or officer is adjudged liable for negligence or
misconduct in the performance of his duties to the corporation, unless a
corporation determines that, despite such adjudication, but in view of all the
circumstances, he is entitled to indemnification. The indemnification described
in clauses (ii) and (iii) above may be made only upon a determination that
indemnification is proper because the applicable standard of conduct has been
met. Such a determination may be made by a majority of a quorum of disinterested
directors, independent legal counsel, the stockholders or a court of competent
jurisdiction. The Certificate of Incorporation and Bylaws of the Registrant
provides that the Registrant shall indemnify to the fullest extent permitted by
Section 145, as it now exists or as amended, all persons whom it may indemnify
pursuant thereto.
Section 102(b)(7) of the DGCL permits a corporation to provide in its
Certificate of Incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL,
or (iv) for any transaction from which the director derived an improper personal
benefit. The Certificate of Incorporation and Bylaws of the Registrant provides
for the elimination of personal liability of a director for breach of fiduciary
duty, as permitted by Section 102(b)(7) of the DGCL.
II-1
<PAGE>
Section 7 of the Form of Underwriting Agreement, filed as Exhibit 1.1
hereto, contains certain provisions relating to indemnification.
Prior to the closing of the Offering, the Company intends to obtain
liability insurance insuring the Company's officers and directors against
liabilities that they may incur in such capacities.
The Registrant has entered into agreements to indemnify its directors and
executive officers, in addition to indemnification provided for in its charter
documents. These agreements, among other things, provide for the indemnification
of the Registrant's directors and executive officers for certain expenses
(including attorneys' fees), judgments, fines and settlement amounts incurred by
any such person in any action or proceeding, including any action by or in the
right of the Registrant, arising out of such person's services as a director or
executive officer of the Registrant, any subsidiary of the Registrant or any
other company or enterprise to which such person provides services at the
request of the Registrant to the fullest extent permitted by applicable law. The
Registrant believes that these provisions and agreements will assist it in
attracting and retaining qualified persons to serve as directors and executive
officers.
The Investors' Agreements provide for cross-indemnification of stockholders
of the Company whose shares with registration rights are included in a
registration under the Securities Act, and of the Company, its officers and
directors for certain liabilities arising in connection with such registration.
See also the undertakings set out in response to Item 17 herein.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Since January 1, 1993, the Registrant has issued and sold the following
unregistered securities:
(1) In 1993, the Registrant (a) sold 82,907 shares of Common Stock to Dr.
Given for $0.02 per share pursuant to the terms of his employment
agreement, (b) issued 11,400 shares of Common Stock to The Ohio
University Foundation without additional consideration pursuant to
certain antidilution rights contained in a stock purchase agreement with
the Registrant and (c) issued a certificate for 14,854 shares of Common
Stock to Dr. Cooper in exchange for certificates for 89,121 shares of
Common Stock pursuant to a repurchase of Common Stock in connection with
the termination of Dr. Cooper's employment agreement with the Registrant.
(2) In 1994, the Registrant (a) issued 178,750 shares of Common Stock to Dr.
Thomas Wagner upon the conversion of the shares of Class B Common Stock
held by Dr. Wagner and (b) issued 40,353 shares of Common Stock to The
Ohio University Foundation without additional consideration pursuant to
certain antidilution rights contained in a stock purchase agreement with
the Registrant.
(3) Between December 1994 and July 1995, the Registrant issued and sold an
aggregate of 349,000 shares of Series B Preferred Stock to certain
persons and entities for $4.48 per share. In connection with such
transaction, the Registrant issued warrants to purchase 22,627 shares of
Series B Preferred Stock to designees of Paramount Capital, Inc., the
placement agent for such transaction, and warrants to purchase 12,274
shares of Series B Preferred Stock to designees of D.H. Blair & Co.,
Inc., selected dealer for such transaction, pursuant to rights of such
entities under agreements with the Registrant.
(4) In December 1994, upon the initial closing of the issuance and sale of
Series B Preferred Stock described in paragraph (3) above, in exchange
for the cancellation of an aggregate of approximately $12.6 million of
debt owed by the Registrant to Interneuron, the Registrant issued and
sold 2,020,496 shares of Series A Preferred Stock to Interneuron for
$6.25 per share.
(5) In 1996, the Registrant issued (a) 58,333 shares of Common Stock to The
Ohio University Foundation pursuant to a Stock Purchase Agreement dated
as of February 26, 1996, for $6.00 per share, (b) issued and sold 27,250
shares of Common Stock for $0.20 per share to certain former employees
pursuant to the exercise of stock options granted under the 1992 Stock
Option Plan, (c) issued and sold 50 shares of Common Stock for $2.00 per
share to a former employee
II-2
<PAGE>
pursuant to the exercise of stock options granted under the 1992 Stock
Option Plan, (d) issued and sold 5,000 shares of Common Stock for $4.00
per share to a former employee pursuant to the exercise of stock options
granted under the 1992 Stock Option Plan and (e) issued and sold 7,500
shares of Common Stock to a former employee for $6.00 per share pursuant
to the exercise of stock options granted under the 1992 Stock Option
Plan.
(6) In 1997, the Registrant issued and sold 1,125 shares of Common Stock for
$4.00 per share and 188 shares of Common Stock for $5.50 per share to an
employee pursuant to the exercise of stock options granted under the 1992
Stock Option Plan.
(7) Since January 1, 1993, the Registrant granted stock options to
employees, consultants, directors, officers and affiliates of the
Registrant as described below. From February 1 to June 1, 1993, the
Registrant granted stock options under the 1992 Stock Option Plan
covering an aggregate of 82,450 shares of Common Stock at an exercise
price of $0.20 per share. On June 21, 1993, the Registrant granted stock
options under the 1992 Stock Option Plan covering an aggregate of 14,250
shares of Common Stock at an exercise price of $2.00 per share. From June
2, 1993 to December 31, 1994, the Registrant granted stock options under
the 1992 Stock Option Plan covering an aggregate of 84,375 shares of
Common Stock at an exercise price of $4.00 per share. From March 1, 1995
to February 21, 1996, the Registrant granted stock options under the 1992
Stock Option Plan covering an aggregate of 235,000 shares of Common Stock
at an exercise price of $6.00 per share. On May 13, 1996, the Registrant
granted stock options under the 1996 Stock Incentive Plan covering an
aggregate of 275,000 shares of Common Stock at an exercise price of $9.00
per share. On August 20, 1996, the Registrant granted stock options under
the 1996 Stock Incentive Plan covering an aggregate of 110,000 shares of
Common Stock at an exercise price of $9.00 per share. On September 10,
1996, the Registrant granted stock options under the 1992 Stock Option
Plan covering an aggregate of 1,750 shares of Common Stock at an exercise
price of $9.00 per share. On December 30, 1996, the Registrant granted
stock options under the 1992 Stock Option Plan covering an aggregate of
12,025 shares of Common Stock at an exercise price of $5.50 per share.
Also on December 30, 1996, the Registrant cancelled all outstanding stock
options granted from March 1, 1995 to September 10, 1996, and regranted
the same number of options under the same plans under which such options
had been previously granted, at an exercise price of $5.50 per share.
The sales and issuances of Common Stock in the transactions described in
paragraphs (1), (2) and (5) above other than pursuant to the exercise of stock
options were deemed to be exempt from registration under the Securities Act
pursuant to Section 4(2) thereof.
The issuance and sale of the Series B Preferred Stock in the transactions
described in paragraph (3) were deemed to be exempt from registration under the
Securities Act pursuant to Section 4(2) of the Securities Act and/or Regulation
D promulgated thereunder.
The issuance of the warrants in the transactions described in paragraph (3)
was deemed to be exempt from registration under the Securities Act pursuant to
Section 4(2) thereof.
The issuance and sale of the Series A Preferred Stock in the transaction
described in paragraph (4) were deemed to be exempt from registration under the
Securities Act pursuant to Section 4(2) thereof.
The issuances and sales of Common Stock pursuant to the exercise of stock
options described in paragraph (5) were deemed to be exempt from registration
under the Securities Act by virtue of Rule 701 promulgated thereunder, or were
deemed to be exempt pursuant to Section 4(2) thereof.
With respect to the grant of stock options described in paragraph (6),
exemption from registration under the Securities Act was unnecessary in that
none of such transactions involved a "sale" of securities as such term is used
in Section 2(3) of the Securities Act.
II-3
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS.
<TABLE>
<C> <S>
**1.1 Form of Underwriting Agreement.
**2.1 Amended and Restated Agreement and Plan of Reorganization, dated as of February
14, 1997, as amended July 22, 1997 (filed as Exhibit 2.1 to the Registration
Statement on Form S-4 filed by the Company and incorporated herein by
reference).
**3.1 Restated Certificate of Incorporation of the Company.
**3.2 Amended and Restated Bylaws of the Company.
**3.3 Form of Certificate of Designation Establishing Series D Preferred Stock.
**4.1 Specimen Stock Certificate of the Company.
**4.2 Reference is made to Exhibits 3.1 and 3.2.
**4.3 Warrant Agreement for Series A Preferred Stock issued by Mercator Genetics, Inc.
to Phoenix Leasing Incorporated, dated August 31, 1993.
**4.4 Warrant Agreement for Series B Preferred Stock issued by Mercator Genetics, Inc.
to Phoenix Leasing Incorporated, dated October 28, 1994.
**4.5 Form of Warrant for Purchase of Common Stock.
**4.6 Form of Warrant Agreement.
**5.1 Opinion of Morrison & Foerster LLP.
**10.1 Form of Indemnification Agreement entered into between the Company and its
directors and executive officers.
**10.2 The Company's 1992 Stock Option Plan.
**10.3 Form of Incentive Stock Option Agreement under the 1992 Stock Option Plan.
**10.4 Form of Non-Qualified Stock Option Agreement under the 1992 Stock Option Plan.
**10.5 The Company's 1996 Stock Incentive Plan, as amended and restated as of March 7,
1997, and form of Stock Option Agreement.
**10.6 Form of Investors' Rights Agreement, entered into among the Company, Interneuron
Pharmaceuticals, Inc., Transcell Technologies, Inc., and the holders of the
Company's Preferred Stock, Series B.
*/**10.7 License Agreement, dated as of January 28, 1992, by and between Scimark Corp.,
The Castle Group Ltd. and Ohio University, as amended October 15, 1993.
*/**10.8 Sponsored Research Agreement, dated January 31, 1992, by and between Scimark
Corp. and Ohio University, as amended October 15, 1993, February 16, 1994,
November 16, 1994 and November 22, 1995.
*/**10.9 License Agreement, dated as of April 1, 1993, by and between the Company and Ohio
University.
**10.11 License Agreement, dated as of June 8, 1994, by and between the Company and
Associated Universities, Inc.
*/**10.12 Standard License Agreement, dated as of September 1, 1994, by and between the
Company and the Wisconsin Alumni Research Foundation, as amended June 2, 1995.
*/**10.13 License and Collaboration Agreement, dated as of March 31, 1995, by and between
the Company and Chiron Corporation, as amended April 10, 1996.
*/**10.14 Sponsored Research and License Agreement, dated as of May 1, 1995, by and between
the Company and Novo Nordisk A/S, as amended January 17, 1996 and March 17,
1996.
*/**10.15 License Agreement, dated as of July 17, 1995, by and between the Company and
Vanderbilt University.
*/**10.16 License Agreement, dated as of May 30, 1996, by and between the Company and AMRAD
Developments PTY Ltd.
</TABLE>
II-4
<PAGE>
<TABLE>
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**10.17 Lease Agreement, dated as of November 1994, by and between the Company and Thomas
R. Eggers.
**10.18 Lease, Service and Affiliation Agreement, entered into as of February 1995, by
and between the Company and The Ohio State University.
**10.19 Employment Agreement, dated January 3, 1993, by and between the Company and
Douglass B. Given.
**10.20 Form of Intercompany Services Agreement, dated as of , 1997, by and
between the Company and Interneuron Pharmaceuticals, Inc.
**10.21 Form of Tax Allocation Agreement, dated as of , 1997, by and between
the Company and Interneuron Pharmaceuticals, Inc.
**10.22 The Company's 1996 Employee Stock Purchase Plan.
*10.23 License Agreement, dated as of December 31, 1996, by and between the Company and
Amgen Inc.
10.24 Stock Purchase Agreement, dated as of December 31, 1996, by and between the
Company and Amgen Inc.
*/**10.25 License Agreement, dated as of January 8, 1997, by and between the Company and
Associated Universities, Inc., operator of Brookhaven National Laboratory.
*/**10.26 Amended and Restated Sponsored Research and License Agreement, dated as of
February 21, 1997, by and between the Company and Novo Nordisk A/S.
**10.27 The Company's 1997 Stock Option Plan.
*/**10.28 License Agreement, dated as of February 1, 1997, by and between Mercator
Genetics, Inc. and the Board of Trustees of The Leland Stanford Junior
University.
**10.29 Lease Agreement, dated July 29, 1993, by and between Mercator Genetics, Inc. and
WVP Income Plus, III, as amended August 11, 1993, February 7, 1994, October 10,
1994, April 27, 1995 and May 29, 1997.
**10.30 Form of Indemnification Agreement entered into between Mercator Genetics, Inc.
and its directors and executive officers.
**10.31 Employment Agreement, dated as of February 14, 1997, by and between the Company
and Elliott Sigal.
**10.32 Loan Agreement, dated as of February 14, 1997, by and between Mercator Genetics,
Inc. and the Company (filed as Exhibit 10.35 to the Registration Statement on
Form S-4 filed by the Company and incorporated herein by reference).
*/**10.33 Scientific Collaboration Agreement, dated February 21, 1997, by and between
Mercator Genetics, Inc. and Affymetrix, Inc.
*/**10.34 Scientific Collaboration Agreement, dated March 3, 1997, by and between Mercator
Genetics, Inc. and Affymetrix, Inc.
*/**10.35 Progenitor--Pangea Collaboration Agreement, dated as of March 13, 1997, by and
between the Company and Pangea Systems, Inc.
**10.36 Employment Agreement, dated as of May 1997, by and between the Company and
Douglass B. Given.
*/**10.37 Exclusive License Agreement and Option, dated as of April 1, 1997, by and between
The National Jewish Medical and Research Center and the Company.
*/**10.38 Sponsored Research Agreement, dated May 1, 1997, by and between the Ontario
Cancer Institute/Princess Margaret Hospital and the Company.
*/**10.39 Sponsored Research Agreement, dated April 15, 1997, by and between the University
of Cambridge and the Company.
*/**10.40 Sponsored Research Agreement, dated May 1, 1997, by and between the Board of
Regents of the University of Nebraska (doing business as the University of
Nebraska Medical Center) and the Company.
</TABLE>
II-5
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<TABLE>
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*/**10.41 Sponsored Research Agreement, dated May 1, 1997, by and between Ohio University
and the Company.
**10.42 Interneuron Option Agreement, dated July 2, 1997, by and between the Company and
Interneuron Pharmaceuticals, Inc.
**10.43 Loan Agreement, dated as of February 14, 1997, and amendment thereto dated as of
July 2, 1997, by and between the Company and Interneuron Pharmaceuticals, Inc.
(filed as Exhibit 10.37 to the Registration Statement on Form S-4 filed by the
Company and incorporated herein by reference.)
**11.1 Statement Regarding Computation of Per Share Earnings.
**21.1 List of subsidiaries of the Company.
**23.1 Consent of Coopers & Lybrand L.L.P., independent accountants.
**23.2 Consent of Ernst & Young LLP, independent auditors.
**23.3 Consent of Pennie & Edmonds LLP.
**23.4 Consent of Morrison & Foerster LLP (included in Exhibit 5.1).
**23.5 Consent of Robert R. Momsen.
**24.1 Power of Attorney of the Company.
**27.1 Financial Data Schedule.
</TABLE>
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* Documents for which confidential treatment has been requested.
** Exhibit previously filed.
(B) FINANCIAL STATEMENT SCHEDULES.
None.
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed a
new registration statement relating to the securities
II-6
<PAGE>
offered therein, and the offering of the securities at that time to be the
initial BONA FIDE offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement,
certificates for the Securities in such denominations and registered in such
names as required by the Underwriters to permit prompt delivery to each
purchaser.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions contained in the Certificate of
Incorporation and Bylaws of the Registrant, the DGCL, the Underwriting
Agreement, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit, or proceeding) is asserted by such director, officer or
controlling person in connection with the Securities being registered hereunder,
the Registrant will, unless in the opinion of their respective counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
(d) The undersigned Registrant undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of the
Registration Statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of the
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be in the initial bona fide offering thereof.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
Registrant has duly caused this Amendment to the Registration Statement on Form
S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Columbus, State of Ohio, on July 29, 1997.
PROGENITOR, INC.
By: /s/ MARK N. K. BAGNALL
-----------------------------------
Mark N. K. Bagnall
VICE PRESIDENT, FINANCE AND
CHIEF FINANCIAL OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------------ --------------------------------------- -----------------
<C> <S> <C>
/s/ DOUGLASS B. GIVEN* President, Chief Executive Officer and
------------------------------------------- Director (Principal Executive July 29, 1997
Douglass B. Given, M.D., Ph.D. Officer)
/s/ MARK N. K. BAGNALL Vice President, Finance and Chief
------------------------------------------- Financial Officer (Principal July 29, 1997
Mark N. K. Bagnall Financial and Accounting Officer)
/s/ ROBERT P. AXLINE*
------------------------------------------- Director July 29, 1997
Robert P. Axline
/s/ GLENN L. COOPER*
------------------------------------------- Director July 29, 1997
Glenn L. Cooper M.D.
/s/ ALEXANDER M. HAIG, JR.*
------------------------------------------- Director July 29, 1997
Alexander M. Haig, Jr.
/s/ MORRIS LASTER*
------------------------------------------- Director July 29, 1997
Morris Laster, M.D.
/s/ JERRY P. PEPPERS*
------------------------------------------- Director July 29, 1997
Jerry P. Peppers
/s/ DAVID B. SHARROCK*
------------------------------------------- Director July 29, 1997
David B. Sharrock
* By /s/ MARK N. K. BAGNALL
----------------------
Mark N. K. Bagnall
ATTORNEY-IN-FACT
</TABLE>
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT PAGE
- ----------- ---------------------------------------------------------------------------------------------- ---------
<C> <S> <C>
**1.1 Form of Underwriting Agreement................................................................
**2.1 Amended and Restated Agreement and Plan of Reorganization, dated as of February 14, 1997, as
amended July 22, 1997 (filed as Exhibit 2.1 to the Registration Statement on Form S-4 filed
by the Company and incorporated herein by reference)........................................
**3.1 Restated Certificate of Incorporation of the Company..........................................
**3.2 Amended and Restated Bylaws of the Company....................................................
**3.3 Form of Certificate of Designation Establishing Series D Preferred Stock......................
**4.1 Specimen Stock Certificate of the Company.....................................................
**4.2 Reference is made to Exhibits 3.1 and 3.2.....................................................
**4.3 Warrant Agreement for Series A Preferred Stock issued by Mercator Genetics, Inc. to Phoenix
Leasing Incorporated, dated August 31, 1993.................................................
**4.4 Warrant Agreement for Series B Preferred Stock issued by Mercator Genetics, Inc. to Phoenix
Leasing Incorporated, dated October 28, 1994................................................
**4.5 Form of Warrant for Purchase of Common Stock
**4.6 Form of Warrant Agreement
**5.1 Opinion of Morrison & Foerster LLP............................................................
**10.1 Form of Indemnification Agreement entered into between the Company and its directors and
executive officers..........................................................................
**10.2 The Company's 1992 Stock Option Plan..........................................................
**10.3 Form of Incentive Stock Option Agreement under the 1992 Stock Option Plan.....................
**10.4 Form of Non-Qualified Stock Option Agreement under the 1992 Stock Option
Plan........................................................................................
**10.5 The Company's 1996 Stock Incentive Plan, as amended and restated as of March 7, 1997, and form
of Stock Option Agreement...................................................................
**10.6 Form of Investors' Rights Agreement, entered into among the Company, Interneuron
Pharmaceuticals, Inc., Transcell Technologies, Inc., and the holders of the Company's
Preferred Stock, Series B...................................................................
*/**10.7 License Agreement, dated as of January 28, 1992, by and between Scimark Corp., The Castle
Group Ltd. and Ohio University, as amended October 15, 1993.................................
*/**10.8 Sponsored Research Agreement, dated January 31, 1992, by and between Scimark Corp. and Ohio
University, as amended October 15, 1993, February 16, 1994, November 16, 1994 and November
22, 1995....................................................................................
*/**10.9 License Agreement, dated as of April 1, 1993, by and between the Company and Ohio
University..................................................................................
**10.11 License Agreement, dated as of June 8, 1994, by and between the Company and Associated
Universities, Inc...........................................................................
*/**10.12 Standard License Agreement, dated as of September 1, 1994, by and between the Company and the
Wisconsin Alumni Research Foundation, as amended June 2, 1995...............................
*/**10.13 License and Collaboration Agreement, dated as of March 31, 1995, by and between the Company
and Chiron Corporation, as amended April 10, 1996...........................................
*/**10.14 Sponsored Research and License Agreement, dated as of May 1, 1995, by and between the Company
and Novo Nordisk A/S, as amended January 17, 1996 and March 17, 1996........................
*/**10.15 License Agreement, dated as of July 17, 1995, by and between the Company and Vanderbilt
University..................................................................................
*/**10.16 License Agreement, dated as of May 30, 1996, by and between the Company and AMRAD Developments
PTY Ltd.....................................................................................
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT PAGE
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<C> <S> <C>
**10.17 Lease Agreement, dated as of November 1994, by and between the Company and Thomas R. Eggers...
**10.18 Lease, Service and Affiliation Agreement, entered into as of February 1995, by and between the
Company and The Ohio State University.......................................................
**10.19 Employment Agreement, dated January 3, 1993, by and between the Company and Douglass B.
Given.......................................................................................
**10.20 Form of Intercompany Services Agreement, dated as of , 1997, by and between the
Company and Interneuron Pharmaceuticals, Inc................................................
**10.21 Form of Tax Allocation Agreement, dated as of , 1997, by and between the Company
and Interneuron Pharmaceuticals, Inc........................................................
**10.22 The Company's 1996 Employee Stock Purchase Plan...............................................
*10.23 License Agreement, dated as of December 31, 1996, by and between the Company and Amgen Inc....
10.24 Stock Purchase Agreement, dated as of December 31, 1996, by and between the Company and Amgen
Inc.........................................................................................
*/**10.25 License Agreement, dated as of January 8, 1997, by and between the Company and Associated
Universities, Inc., operator of Brookhaven National Laboratory..............................
*/**10.26 Amended and Restated Sponsored Research and License Agreement, dated as of February 21, 1997,
by and between the Company and Novo Nordisk A/S.............................................
**10.27 The Company's 1997 Stock Option Plan..........................................................
*/**10.28 License Agreement, dated as of February 1, 1997, by and between Mercator Genetics, Inc. and
the Board of Trustees of The Leland Stanford Junior University..............................
**10.29 Lease Agreement, dated July 29, 1993, by and between Mercator Genetics, Inc. and WVP Income
Plus, III, as amended August 11, 1993, February 7, 1994, October 10, 1994, April 27, 1995
and May 29, 1997............................................................................
**10.30 Form of Indemnification Agreement entered into between Mercator Genetics, Inc. and its
directors and executive officers............................................................
**10.31 Employment Agreement, dated as of February 14, 1997, by and between the Company and Elliott
Sigal.......................................................................................
**10.32 Loan Agreement, dated as of February 14, 1997, by and between Mercator Genetics, Inc. and the
Company (filed as Exhibit 10.25 to the Registration Statement on S-4 filed by the Company
and incorporated herein by reference).......................................................
*/**10.33 Scientific Collaboration Agreement, dated February 21, 1997, by and between Mercator Genetics,
Inc. and Affymetrix, Inc....................................................................
*/**10.34 Scientific Collaboration Agreement, dated March 3, 1997, by and between Mercator Genetics,
Inc. and Affymetrix, Inc....................................................................
*/**10.35 Progenitor--Pangea Collaboration Agreement, dated as of March 13, 1997, by and between the
Company and Pangea Sytems Inc...............................................................
**10.36 Employment Agreement, dated as of May 1997, by and between the Company and Douglass B.
Given.......................................................................................
*/**10.37 Exclusive License Agreement and Option, dated as of April 1, 1997, by and between The National
Jewish Medical and Research Center and the Company..........................................
*/**10.38 Sponsored Research Agreement, dated May 1, 1997, by and between the Ontario Cancer
Institute/Princess Margaret Hospital and the Company........................................
*/**10.39 Sponsored Research Agreement, dated April 15, 1997, by and between the University of Cambridge
and the Company.............................................................................
*/**10.40 Sponsored Research Agreement, dated May 1, 1997, by and between the Board of Regents of the
University of Nebraska (doing business as the University of Nebraska Medical Center) and the
Company.....................................................................................
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT PAGE
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*/**10.41 Sponsored Research Agreement, dated May 1, 1997, by and between Ohio University and the
Company.....................................................................................
**10.42 Interneuron Option Agreement, dated July 2, 1997, by and between the Company and Interneuron
Pharmaceuticals Inc.........................................................................
**10.43 Loan Agreement, dated as of February 14, 1997, and amendment thereto dated as of July 2, 1997,
by and between the Company and Interneuron Pharmaceuticals, Inc. (filed as Exhibit 10.37 to
the Registration Statement on Form S-4 filed by the Company and incorporated herein by
reference)..................................................................................
**11.1 Statement Regarding Computation of Per Share Earnings.........................................
**21.1 List of subsidiaries of the Company...........................................................
**23.1 Consent of Coopers & Lybrand L.L.P., independent accountants..................................
**23.2 Consent of Ernst & Young LLP, independent auditors............................................
**23.3 Consent of Pennie & Edmonds LLP...............................................................
**23.4 Consent of Morrison & Foerster LLP (included in Exhibit 5.1)..................................
**23.5 Consent of Robert R. Momsen...................................................................
**24.1 Power of Attorney of the Company..............................................................
**27.1 Financial Data Schedule.......................................................................
</TABLE>
- ------------------------
* Documents for which confidential treatment has been requested.
** Exhibit previously filed.
<PAGE>
THE INFORMATION BELOW MARKED * AND [ ] HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS HAVE BEEN
SEPARATELY FILED WITH THE COMMISSION.
LICENSE AGREEMENT
DATED DECEMBER 31, 1996
BETWEEN
PROGENITOR, INC.
AND
AMGEN INC.
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
ARTICLE 1 - DEFINITIONS
1.1 Active Component. . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Combined Product. . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.5 Confidential Information. . . . . . . . . . . . . . . . . . . . . . 2
1.6 Controls/Controlled . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 FDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 Field of Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 First Commercial Sale . . . . . . . . . . . . . . . . . . . . . . . 2
1.12 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.13 GAAP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.14 IND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.15 Licensed Patents. . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.16 Licensed Product(s) . . . . . . . . . . . . . . . . . . . . . . . . 3
1.17 Net Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.18 New Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.19 Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.20 Patent Right. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.21 Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.22 Phase III Licensing Trial . . . . . . . . . . . . . . . . . . . . . 3
1.23 Product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.24 Progenitor Ancillary Patents. . . . . . . . . . . . . . . . . . . . 4
1.25 Progenitor Receptor Patents . . . . . . . . . . . . . . . . . . . . 4
1.26 Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.27 Third Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.28 Third Party Royalties . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Progenitor. . . . . . . . . . . . 4
2.2 Representations and Warranties of Amgen . . . . . . . . . . . . . . 5
ARTICLE 3 - LICENSE GRANT
3.1 Technology Ownership. . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 License Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Retained Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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<PAGE>
ARTICLE 4 - DEVELOPMENT AND COMMERCIALIZATION
4.1 Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.2 Commercialization . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.3 Annual Statement. . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 5 - CONSIDERATION
5.1 License Fee and Equity Purchases. . . . . . . . . . . . . . . . . . 7
5.2 License Maintenance Fee . . . . . . . . . . . . . . . . . . . . . . 7
5.3 Milestones. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.4 Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.5 Credits Against Royalties and Milestone Payments. . . . . . . . . . 10
5.6 Payment of Royalties. . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 6 - RECORDS; AUDIT
6.1 Record Retention. . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2 Royalty Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.3 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 7 - PATENTS
7.1 Patent Prosecution. . . . . . . . . . . . . . . . . . . . . . . . . 12
7.2 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.3 Third Party Claims. . . . . . . . . . . . . . . . . . . . . . . . . 13
7.4 Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 8 - CONFIDENTIALITY
8.1 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.2 This Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.3 Authorized Disclosure . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 9 - INDEMNIFICATION
9.1 Indemnification by Amgen. . . . . . . . . . . . . . . . . . . . . . 15
9.2 Indemnification by Progenitor . . . . . . . . . . . . . . . . . . . 16
9.3 Indemnification Procedure . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 10 - TERMINATION
10.1 Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
10.2 Discontinuation of Development. . . . . . . . . . . . . . . . . . . 16
10.3 Termination of Licenses . . . . . . . . . . . . . . . . . . . . . . 16
10.4 Termination for Default . . . . . . . . . . . . . . . . . . . . . . 16
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10.5 Insolvency or Bankruptcy. . . . . . . . . . . . . . . . . . . . . . 17
10.6 Accrued Rights, Surviving Obligations . . . . . . . . . . . . . . . 18
ARTICLE 11 - MISCELLANEOUS PROVISIONS
11.1 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.2 Further Actions . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.3 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.4 Public Announcements. . . . . . . . . . . . . . . . . . . . . . . . 18
11.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.6 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.7 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.9 Descriptive Headings. . . . . . . . . . . . . . . . . . . . . . . . 19
11.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.11 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11.12 Entire Agreement of the Parties . . . . . . . . . . . . . . . . . . 20
11.13 Dispute Resolution. . . . . . . . . . . . . . . . . . . . . . . . . 20
11.14 Independent Contractors . . . . . . . . . . . . . . . . . . . . . . 20
11.15 Use of Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11.16 Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
EXHIBITS
Exhibit A Progenitor Receptor Patents
iii
<PAGE>
LICENSE AGREEMENT
LICENSE AGREEMENT (this "Agreement") dated December 31, 1996 by and
between Progenitor, Inc., a Delaware corporation with principal offices located
at 1507 Chambers Road, Columbus, Ohio 43212 ("Progenitor") and Amgen Inc., a
Delaware corporation with principal offices located at Amgen Center, 1840
DeHavilland Drive, Thousand Oaks, California 91320 ("Amgen").
W I T N E S S E T H:
WHEREAS, Progenitor has filed certain patent applications relating to the
leptin receptor including patent applications describing the receptor itself,
antibody to the receptor and methods and uses relating thereto.
WHEREAS, Amgen is engaged in the research, development and
commercialization of human pharmaceutical products.
WHEREAS, Progenitor has agreed to license to Amgen the Progenitor leptin
receptor patent applications and patents issuing therefrom for human
pharmaceutical uses under the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing and the covenants and
promises contained in this Agreement, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "ACTIVE COMPONENT" shall mean any proprietary substance or device (other
than a Product) which performs an identifiable therapeutic, prophylactic,
diagnostic or delivery function in combination with a Product.
1.2 "AFFILIATE" shall mean a Person or entity that, directly or indirectly,
through one or more intermediates, controls, is controlled by, or is under
common control with the Person or entity specified. For the purposes of this
definition, control shall mean the direct or indirect ownership of at least
fifty percent (50%) of (i) the stock shares entitled to vote for the election of
directors or (ii) ownership interest.
1.3 "AGREEMENT" shall mean this Agreement.
1.4 "COMBINED PRODUCT" shall mean any product made, used or sold by or on
behalf of Amgen, its Affiliates and/or its sublicensees which consists of a
Product in combination with one or more Active Components.
1
<PAGE>
1.5 "CONFIDENTIAL INFORMATION" shall mean information, which, if written, is
marked confidential by the disclosing Party or, if oral, is reduced to writing
and marked confidential by the disclosing Party, within thirty (30) days of the
oral disclosure.
1.6 "CONTROLS" or "CONTROLLED" shall mean possession of the ability to grant
licenses or sublicenses without violating the terms of any agreement or other
arrangement with, or the rights of, any Third Party.
1.7 "DEFAULT" shall mean with respect to either Party (i) that any
representation or warranty of such Party set forth herein shall have been untrue
in any material respect when made and/or (ii) such Party shall have failed to
perform any material obligation set forth herein within sixty (60) days after
receipt of written notice from the other Party specifying in detail the material
obligation which has not been performed and requesting that the failure to
perform be remedied within sixty (60) days.
1.8 "EFFECTIVE DATE" shall mean the date first written above.
1.9 "FDA" shall mean the Federal Food and Drug Administration of the United
States Department of Health and Human Services and successor agencies.
1.10 "FIELD OF USE" shall mean all human therapeutic, prophylactic and
diagnostic uses of Licensed Products. Without limiting the foregoing, the Field
of Use will specifically include all human therapeutic, diagnostic and
prophylactic uses of both proteins and DNAs encoding Licensed Products.
1.11 "FIRST COMMERCIAL SALE" shall mean the initial transfer of a Licensed
Product to a Third Party in exchange for cash or some equivalent to which value
can be assigned for purposes of determining Net Sales.
1.12 "FORCE MAJEURE" shall mean any occurrence beyond the reasonable control
of a Party that prevents or substantially interferes with the performance by the
Party of any of its obligations hereunder, if such occurs by reason of any act
of God, flood, fire, explosion, breakdown of plant, earthquake, strike, lockout,
labor dispute, casualty or accident, or war, revolution, civil commotion, acts
of public enemies, blockage or embargo, or any injunction, law order,
proclamation, regulation, ordinance, demand or requirement of any government or
of any subdivision, authority or representative or any such government,
inability to procure or use materials, labor, equipment, transportation, or
energy sufficient to meet manufacturing needs without the necessity of
allocation, or any other cause whatsoever, whether similar or dissimilar to
those above enumerated, beyond the reasonable control of such Party, if and only
if the Party affected shall have used reasonable efforts to avoid such
occurrence and to remedy it promptly if it shall have occurred.
1.13 "GAAP" shall mean United States generally accepted accounting principles
2
<PAGE>
consistently applied.
1.14 "IND" shall mean an Investigational New Drug application filed with the
FDA.
1.15 "LICENSED PATENTS" shall mean the Progenitor Receptor Patents and
Progenitor Ancillary Patents.
1.16 "LICENSED PRODUCT(S)" shall mean Products and Combined Products.
1.17 "NET SALES" shall mean all revenues recognized in accordance with GAAP
from the sale or other disposition of a Licensed Product by Amgen, an Affiliate
or a sublicensee of Amgen to Third Parties, less returns and allowances
(actually paid or allowed, including, but not limited to, prompt payment and
volume discounts, chargebacks from wholesalers and other allowances granted to
customers or wholesalers of products, whether in cash or trade), freight,
shipping, packing, freight and shipping insurance, rebates, and sales and other
taxes based on sales prices when included in gross sales, but not including
taxes when assessed on income derived from such sales.
1.18 "NEW PRODUCT" shall mean a Product (i) which requires a Phase III
Licensing Trial in the United States, United Kingdom, France, Italy, Germany or
Japan in order to obtain marketing approval, (ii) which is chemically distinct
from all other Products which have been approved for marketing in the United
States, United Kingdom, France, Italy, Germany and Japan, (iii) which has a
different mode of action or biological activity from all other Products which
have been approved for marketing in the United States, United Kingdom, France,
Italy, Germany and Japan, and (iv) which is being developed for an indication
for which no other Product is approved for marketing in the United States,
United Kingdom, France, Italy, Germany or Japan. A Combined Product will
contain a New Product only if the Product component of the Combined Product
meets the definition of New Product set forth in this Section 1.18.
1.19 "PARTY" shall mean Amgen or Progenitor, as the case may be, and "PARTIES"
shall mean Amgen and Progenitor collectively.
1.20 "PATENT RIGHT" shall mean patent applications, patents issuing thereon
and any extensions or restorations by existing or future extension or
restoration mechanisms, including without limitation Supplementary Protection
Certificates or the equivalent thereof, renewals, continuations, continuations-
in-part, divisions, patents-of-addition, and/or reissues of any patent.
1.21 "PERSON" shall mean an individual, a partnership, a joint venture, a
corporation, a trust, an estate, an unincorporated organization, or any other
entity, or a government or any department or agency thereof.
1.22 "PHASE III LICENSING TRIAL" shall mean a clinical trial which, if the
defined
3
<PAGE>
end-points are met, is intended by Amgen as of the start of such trial to be a
pivotal clinical trial that would constitute sufficient basis for receipt of
marketing approval in the United States, United Kingdom, France, Germany, Italy
or Japan, as the case may be.
1.23 "PRODUCT" shall mean a Patented Product and/or a Patent Pending Product
as defined in Sections 5.4(a) and (b), respectively.
1.24 "PROGENITOR ANCILLARY PATENTS" shall mean any and all Patent Rights owned
or Controlled by Progenitor during the term of this Agreement which are
necessary or useful to make, use, sell, offer for sale or import Licensed
Products. Notwithstanding the foregoing, Progenitor Ancillary Patents will not
include any Patent Rights owned or Controlled by Progenitor that are directed
solely to uses of leptin protein.
1.25 "PROGENITOR RECEPTOR PATENTS" shall mean the Patent Rights owned or
Controlled by Progenitor relating to the leptin receptor and antibodies to the
leptin receptor. The Progenitor Receptor Patents are listed on Exhibit A
hereto.
1.26 "ROYALTIES" shall mean those royalties payable by Amgen to Progenitor
pursuant to Article 5 of this Agreement.
1.27 "THIRD PARTY" shall mean any Person other than Progenitor and Amgen.
1.28 "THIRD PARTY ROYALTIES" shall mean royalties payable by Amgen, an
Affiliate or sublicensee of Amgen to a Third Party (or multiple Third Parties)
to make, use, sell, offer to sell or import Licensed Products.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF PROGENITOR.
(a) CORPORATE POWER. As of the Effective Date, Progenitor is duly
organized and validly existing under the laws of Delaware and has full corporate
power and authority to enter into this Agreement and to carry out the provisions
hereof.
(b) DUE AUTHORIZATION. As of the Effective Date, Progenitor is duly
authorized to execute and deliver this Agreement and to perform its obligations
hereunder. The Person executing this Agreement on Progenitor's behalf has been
duly authorized to do so by all requisite corporate action.
(c) BINDING AGREEMENT. This Agreement is a legal and valid obligation
binding upon Progenitor and enforceable in accordance with its terms. As of the
4
<PAGE>
Effective Date, the execution, delivery and performance of this Agreement by
Progenitor does not conflict with any agreement, instrument or understanding,
oral or written, to which it is a party or by which it may be bound, nor violate
any material law or regulation of any court, governmental body or administrative
or other agency having jurisdiction over it.
(d) GRANT OF RIGHTS. Progenitor has not, and will not during the term of
this Agreement, grant any right to any Third Party which would conflict with the
rights granted to Amgen hereunder.
(e) VALIDITY. As of the Effective Date, Progenitor is aware of no action,
suit or inquiry or investigation instituted by any United States federal or
state governmental agency which questions or threatens the validity of this
Agreement or the Progenitor Receptor Patents.
(f) PROGENITOR RECEPTOR PATENTS. As of the Effective Date, the Patent
Rights listed on Exhibit A hereto include all Patents Rights owned or Controlled
by Progenitor which claim or describe the leptin receptor and/or antibodies to
the leptin receptor.
2.2 REPRESENTATIONS AND WARRANTIES OF AMGEN.
(a) CORPORATE POWER. As of the Effective Date, Amgen is duly organized
and validly existing under the laws of Delaware and has full corporate power and
authority to enter into this Agreement and carry out the provisions hereof.
(b) DUE AUTHORIZATION. As of the Effective Date, Amgen is duly authorized
to execute and deliver this Agreement and to perform its obligations hereunder.
The Person executing this Agreement on Amgen's behalf has been duly authorized
to do so by all requisite corporate action.
(c) BINDING AGREEMENT. This Agreement is a legal and valid obligation
binding upon Amgen, and enforceable in accordance with its terms. As of the
Effective Date, the execution, delivery and performance of this Agreement by
Amgen does not conflict with any agreement, instrument or understanding, oral or
written, to which it is a party or by which it may be bound, nor violate any
material law or regulation of any court, governmental body or administrative or
other agency having jurisdiction over it.
(d) VALIDITY. As of the Effective Date, Amgen is aware of no action, suit
or inquiry or investigation instituted by any United States federal or state
governmental agency which questions or threatens the validity of this Agreement.
ARTICLE 3
LICENSE GRANT
3.1 TECHNOLOGY OWNERSHIP. Progenitor shall retain sole right and title,
5
<PAGE>
subject only to the licenses granted to Amgen in Section 3.2, to the Licensed
Patents.
3.2 LICENSE GRANT.
(a) PROGENITOR RECEPTOR PATENTS. Subject to Section 3.3, Progenitor
hereby grants to Amgen and its Affiliates an exclusive worldwide license, with
the right to grant sublicenses, under the Progenitor Receptor Patents to make,
use, sell, offer for sale and import Licensed Products in the Field of Use.
(b) PROGENITOR ANCILLARY PATENTS. Progenitor hereby grants to Amgen and
its Affiliates a non-exclusive worldwide license, with the right to grant
sublicenses, under the Progenitor Ancillary Patents to make, use, sell, offer
for sale and import Licensed Products in the Field of Use.
(c) SUBLICENSES. Amgen will provide Progenitor with copies of all
sublicense agreements entered into by Amgen and/or its Affiliates which grant
sublicenses under the Licensed Patents ("Sublicense Agreements"). Amgen may
redact or delete the provisions in each Sublicense Agreement which, in Amgen's
judgment, disclose information which is confidential or proprietary to Amgen
and/or its Affiliates. Amgen will provide Progenitor with copies of each
Sublicense Agreement within sixty (60) days after the execution date of such
Sublicense Agreement.
3.3 RETAINED RIGHTS.
(a) EXCLUSIVE RIGHTS. Progenitor and its Affiliates will retain an
exclusive right, with the right to grant licenses, under the Progenitor Receptor
Patents to make, use, sell, offer for sale and import Licensed Products for the
following uses (i) any ex vivo uses of Licensed Products for ligand and small
molecule drug screening, (ii) any ex vivo uses of Licensed Products for cell
sorting, (iii) any anti-sense uses of Licensed Products for human therapeutic,
prophylactic and/or diagnostic applications, and (iv) any in vivo human
therapeutic, prophylactic and/or diagnostic applications of antibodies to the
leptin receptor (collectively, the "Progenitor Retained Rights").
(b) NON-EXCLUSIVE RIGHTS. Progenitor and its Affiliates shall retain (i)
a non-exclusive right, with the right to grant licenses, to make, use, sell,
offer for sale and import Licensed Products for human diagnostic uses, the
exercise of such license to be limited to use only to the extent necessary for
Progenitor to develop and commercialize products under the Progenitor Retained
Rights, and (ii) a non-exclusive right, with no right to grant licenses, under
the Progenitor Receptor Patents in the Field of Use for internal research and
development purposes only.
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ARTICLE 4
DEVELOPMENT AND COMMERCIALIZATION
4.1 DEVELOPMENT. Amgen, in its sole discretion, will make all decisions
relating to the development of Licensed Products including, but not limited to,
all decisions relating to the research, pre-clinical development and clinical
development of Licensed Products.
4.2 COMMERCIALIZATION. Amgen, in its sole discretion, will make all decisions
relating to the commercialization of Licensed Products including, but not
limited to, all decisions relating to the promotion, advertising, marketing and
pricing of Licensed Products.
4.3 ANNUAL STATEMENT. On an annual basis, for so long as Amgen is continuing
development and commercialization activities with respect to Licensed Products,
Amgen will provide Progenitor with a written statement confirming that such
activities are on-going (the "Annual Statement"). The Annual Statement will be
limited to a recitation by Amgen that Amgen is continuing development and
commercialization activities with respect to Licensed Products. Under no
circumstances will Amgen be obligated to provide Progenitor with reports
describing Amgen's progress in development of Licensed Products, describe in any
way the status of any Licensed Product development programs or provide any data
collected in the conduct of Amgen's development programs for Licensed Products
to Progenitor.
ARTICLE 5
CONSIDERATION
5.1 LICENSE FEE AND EQUITY PURCHASES.
(a) FEE. In consideration for the licenses to the Licensed Patents
granted by Progenitor to Amgen and its Affiliates herein, on the business day
immediately following the Effective Date, Amgen shall pay to Progenitor a
license fee equal to five hundred thousand dollars ($500,000).
(b) EQUITY PURCHASE. Amgen and Progenitor have entered into a Stock
Purchase Agreement of even date herewith (the "Stock Purchase Agreement")
contemplating an investment by Amgen in Progenitor in the amount of five million
five hundred thousand dollars ($5,500,000) by means of the purchase of Common
Stock.
5.2 LICENSE MAINTENANCE FEE. If, on or before the [***] of the
Effective Date, Amgen shall not have filed an IND or initiated human clinical
trials with respect to at least one Licensed Product, Amgen will, within thirty
(30) days
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after the [***] of the Effective Date, pay to Progenitor a one-time
license maintenance fee equal to [***] .
5.3 MILESTONES. In consideration for the licenses to the Licensed Patents
granted by Progenitor to Amgen and its Affiliates herein, within thirty (30)
days after the first occurrence of each of the following events, Amgen will make
the following milestone payments ("Milestone Payments") to Progenitor:
[* * *]
5.4 ROYALTIES.
(a) PATENTED PRODUCTS. Amgen will pay to Progenitor a Royalty on
cumulative annual worldwide Net Sales by Amgen, its Affiliates and sublicensees
of products, the making, using, selling or importing of which would, but for the
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licenses to the Licensed Patents granted to Amgen by Progenitor herein, infringe
one or more valid, issued claims included within the Licensed Receptor Patents
in the country of sale ("Patented Products") as set forth below.
- Net Sales of less than or equal to [***][***] of Net Sales
- Net Sales greater than [***][***] of Net Sales
(b) PATENT PENDING PRODUCTS. Amgen will pay to Progenitor a Royalty on
cumulative annual worldwide Net Sales by Amgen, its Affiliates and sublicensees
of products the making, using, selling or importing of which would, but for the
licenses to the Licensed Patents granted to Amgen by Progenitor herein and
assuming such pending claims were to be validly issued, infringe one or more
valid, issued claims included within the Licensed Receptor Patents in the
country of sale ("Patent Pending Products") as set forth below.
- Net Sales of less than or equal to [***][***] of Net Sales
- Net Sales greater than [***][***] of Net Sales
(c) COMBINED PRODUCTS. Amgen will pay to Progenitor a Royalty on
cumulative annual worldwide Net Sales by Amgen, its Affiliates and sublicensees
of Combined Products incorporating Patented Products or Patent Pending Products
as set forth below.
A. In the event each of the Active Components and the Product are
sold separately, the Royalty on sales of Combined Products shall be
equal to [***]
- [***]
- [***]
B. In the event one or more of the components of a Combined Product
are not sold separately, the Royalty shall be equal to [***]
- [***]
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[***]
- [***]
(d) PRODUCT BY PRODUCT. Royalties shall be payable pursuant to this
Section 5.4 on a Licensed Product by Licensed Product basis, and shall be
imposed only once with respect to any sale of the same unit of Licensed Product.
(e) TERMINATION. Amgen's obligation to pay Royalties to Progenitor on
Patented Products will expire on a Licensed Product by Licensed Product and
country by country basis upon the expiration of the last to expire of the
Licensed Receptor Patents claiming a Licensed Product in a given country.
Amgen's obligation to pay Royalties to Progenitor on Patent Pending Products
will expire on a Licensed Product by Licensed Product and country by country
basis upon the fifth anniversary of the First Commercial Sale of the Licensed
Product in a given country.
5.5 CREDITS AGAINST ROYALTIES AND MILESTONE PAYMENTS.
(a) THIRD PARTY ROYALTY REDUCTION. In the event Amgen shall be obligated
to pay a Third Party Royalty on sales of a Licensed Product, [***]
of such royalty actually paid shall be creditable by Amgen against Royalties
payable to Progenitor on sales of that Licensed Product.
(b) LICENSE MAINTENANCE FEE. In the event Amgen shall pay to Progenitor a
license maintenance fee in accordance with Section 5.2, that fee shall be
creditable against Milestone Payments thereafter payable by Amgen to Progenitor
hereunder.
(c) PATENT EXPENSES. Amgen shall be entitled to credit all costs,
expenses, fees, settlements and the like actually paid by Amgen in the
enforcement and defense of the Licensed Receptor Patents as set forth in Article
7 against Royalties and Milestone Payments payable to Progenitor hereunder.
(d) LIMITATION. In no event will Amgen reduce any Royalty or
Milestone Payment to Progenitor hereunder by more than [***] by reason of the
credits provided for in this Section 5.5.
5.6 PAYMENT OF ROYALTIES.
(a) STATEMENTS. Amgen shall deliver to Progenitor within sixty (60) days
after the end of each calendar quarter, a statement setting forth the Net Sales
of Licensed Products during the previous quarter and the Royalty due hereunder.
The statement shall be accompanied by a remittance of the Royalty due for such
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quarter. Net Sales and Royalty computations contained in any such statement
shall be certified by Amgen as accurate to the best of its ability consistent
with Amgen standard practices in performing such computations.
(b) CURRENCY. If Net Sales are in a currency other than United States
Dollars, the Net Sales for the purpose of calculating payments hereunder shall
be determined in the applicable foreign currency and then converted into its
equivalent in United States Dollars at the average rate of exchange for buying
funds as published by the Wall Street Journal for the corresponding calendar
quarter.
(c) LEGAL RESTRICTIONS. If at any time legal restrictions prevent the
prompt remittance by Amgen of all or any part of Royalties on Net Sales of
Licensed Products in any country, Amgen shall have the right and option to make
such payment by depositing the amount thereof in local currency to an account in
the name of Progenitor in a bank or other depository in such country. Amgen
will consult with Progenitor and promptly notify Progenitor of any such
arrangements.
(d) TAXES. All taxes levied on account of Royalties accruing under this
Agreement shall be paid by Progenitor. If laws or regulations require
withholding of taxes from any payment to Progenitor, the taxes will be deducted
by Amgen from remittable Royalty to Progenitor and will be paid by Amgen to the
proper taxing authority. Amgen will furnish Progenitor with the original copies
of all official receipts for such taxes. In the event of any such withholding,
the Parties agree to confer regarding other measures to minimize such
withholding.
ARTICLE 6
RECORDS; AUDIT
6.1 RECORD RETENTION. Amgen shall keep complete and accurate records in
sufficient detail to permit Progenitor to confirm the accuracy of calculations
of all payments hereunder. Such records shall be retained by Amgen for no less
than a four (4) year period following the year in which any such payments were
made hereunder.
6.2 ROYALTY AUDIT. Once per calendar year, Progenitor shall have the option to
engage at its own expense, an independent certified public accountant reasonably
acceptable to Amgen, to examine, in confidence, such Amgen records as may be
necessary to determine, with respect to any calendar year, the correctness of
any payment of Royalties hereunder. The report of such accountant shall be
limited to a certificate verifying any report made or payment submitted by Amgen
during such period but may include, in the event the accountant shall be unable
to verify the correctness of any such payment, information relating to why such
payment is unverifiable. All information contained in any such certificate
shall be deemed to be Amgen Confidential Information hereunder. If any audit
performed under this
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Section 6.2 shall indicate that any payment due hereunder was underpaid,
Amgen shall pay to Progenitor the amount of any underpayment promptly. If
any audit performed under this Section 6.2 shall indicate that any payment
hereunder was in error to Progenitor's detriment by more than [***], Amgen
shall pay the cost of the audit.
6.3 SURVIVAL. This Article 6 shall survive any termination of this Agreement
for a period of four (4) years.
ARTICLE 7
PATENTS
7.1 PATENT PROSECUTION.
(a) COUNSEL. During the term of this Agreement, Progenitor will retain
outside counsel, reasonably acceptable to Amgen, to prosecute and maintain the
Progenitor Receptor Patents in the major market countries. Progenitor will keep
Amgen fully informed on the progress and status of prosecution of the Progenitor
Receptor Patents.
(b) CORRESPONDENCE AND FILINGS. Progenitor will provide Amgen with copies
of all Progenitor filings with and correspondence submitted to the United States
Patent and Trademark Office and comparable foreign offices which relate to the
Progenitor Receptor Patents and will provide Amgen with a reasonable opportunity
to comment on all such correspondence and filings prior to submission.
Progenitor will consider Amgen's comments relating to such filings and
correspondence and, where appropriate, incorporate such comments, but the final
decision with respect to content of Progenitor's filings and correspondence
shall be at Progenitor's option and discretion. Upon receipt by Progenitor,
Progenitor will promptly provide Amgen with copies of all correspondence from
the United States Patent and Trademark Office and comparable foreign offices
which relate to the Progenitor Receptor Patents.
(c) EXPENSES. All expenses in connection with prosecution and maintenance
of the Licensed Patents will be borne by Progenitor.
7.2 ENFORCEMENT.
(a) NOTIFICATION OF INFRINGEMENT. If either Party learns of an
infringement by a Third Party of a Patent Right included in the Licensed Patents
in the Field of Use, such Party shall promptly notify the other Party and shall
provide such other Party with available evidence of such infringement.
(b) ENFORCEMENT BY PROGENITOR. Progenitor shall have the first right to
elect to enforce the Progenitor Receptor Patents in the Field of Use against
Third
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Parties worldwide. In the event Progenitor shall so elect, Progenitor shall
determine the worldwide strategy and Amgen shall assist and cooperate with
Progenitor in any such enforcement. Progenitor shall consult with Amgen and
keep Amgen regularly advised of Progenitor's strategies, plans, progress and
results of any such enforcement action. Progenitor shall bear all associated
costs and expenses (including attorneys' fees). In the event damages or
recoveries shall be awarded in such action, such amounts shall be applied first
to reimburse Progenitor for any costs incurred in bringing such action.
Remaining amounts will be paid to Amgen and treated as Net Sales in the year in
which such amounts are received by Amgen for purposes of determination of
Royalties payable by Amgen to Progenitor.
(c) ENFORCEMENT BY AMGEN. In the event Progenitor elects not to enforce
the Progenitor Receptor Patents against any Third Party in the Field of Use,
Amgen shall have the right, but not the obligation, to elect to enforce the
Licensed Receptor Patents against such Third Party worldwide in the Field of
Use. In the event Amgen shall so elect, Amgen shall determine the worldwide
strategy and Progenitor shall assist and cooperate with Amgen in any such
enforcement. Amgen shall consult with Progenitor and keep Progenitor regularly
advised of Amgen's strategies, plans, progress and results of any such
enforcement action. Amgen shall bear all associated costs and expenses
(including attorneys' fees). In the event damages or recoveries shall be
awarded in such action, such amounts shall be applied first to reimburse Amgen
for any costs incurred in bringing such action. Remaining amounts will be
retained by Amgen and treated as Net Sales in the year in which such amounts are
received by Amgen for purposes of determination of Royalties payable by Amgen to
Progenitor.
7.3 THIRD PARTY CLAIMS.
(a) DEFENSE BY AMGEN. Amgen (i) may, but shall not be obligated to, elect
to defend the Licensed Receptor Patents against Third Party claims that the
Licensed Receptor Patents in the Field of Use are invalid or unenforceable and
(ii) will defend any action naming Amgen or Amgen and Progenitor and claiming
the infringement of any Third Party Patent Right through the making, using or
selling of Licensed Products. Amgen shall consult with Progenitor and keep
Progenitor regularly advised of Amgen's strategies, plans, progress and results
of any such defense. Progenitor may, at its expense, select counsel of its
choice to assist Amgen's counsel in connection with such defense and shall
assist and cooperate with Amgen in any such defense. Amgen shall bear all
associated costs and expenses (including attorneys' fees) and pay all damages
and settlement amounts, PROVIDED, HOWEVER, that all costs and expenses actually
incurred by Amgen in connection with Amgen's defense of the Licensed Patents and
all damages and settlements actually paid by Amgen as a result thereof shall be
creditable against Royalties and Milestone Payments payable by Amgen to
Progenitor.
(b) DEFENSE BY PROGENITOR. In the event Amgen does not elect to defend
the Progenitor Receptor Patents as set forth in (a) above, Progenitor shall
defend the Progenitor Receptor Patents and shall bear all associated costs and
expenses
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(including attorneys' fees) and pay all damages and settlement amounts.
Progenitor shall consult with Amgen and keep Amgen regularly advised of
Progenitor's strategies, plans, progress and results of any such defense.
(c) ACTIONS TO THE DETRIMENT OF LICENSED PATENTS. (i) Amgen will not
enter into any settlement action or agree to any settlement arrangement that may
negatively impact the Licensed Patents without the express prior written consent
of Progenitor, such consent not to be unreasonably withheld. A settlement
action or arrangement which provides for the payment of royalties to a Third
Party but does not specifically address the validity or enforceability of the
Licensed Patents shall not be deemed to negatively impact the Licensed Patents
and may be entered into by Amgen at Amgen's discretion. (ii) Progenitor will
not enter into any settlement action or agree to any settlement that may
negatively impact the Licensed Patents in the Field of Use without the express
prior written consent of Amgen, such consent not to be unreasonably withheld.
7.4 NOTICE. Each Party will promptly notify the other upon becoming aware of
(i) any Third Party claim or action against Progenitor and/or Amgen for
infringement of Third Party Patent Rights through the making, using, selling or
importing of Licensed Products, (ii) any Third Party claim or action against
Progenitor for infringement of Third Party Patent Rights through the making,
using, selling or importing of products under the Licensed Patents, or (iii) any
Third Party infringement of the Licensed Patents.
ARTICLE 8
CONFIDENTIALITY
8.1 CONFIDENTIALITY. Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing by the Parties, the Parties agree to
keep confidential and not publish or otherwise disclose or use for any purpose,
other than as provided for this Agreement, any Confidential Information except
to the extent that it can be established by the receiving Party by competent
proof that such Confidential Information:
(a) was already known to the receiving Party, other than under an
obligation of confidentiality, at the time of disclosure by the other Party;
(b) was generally available to the public or otherwise part of the public
domain at the time of its disclosure to the receiving Party;
(c) became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or omission of
the receiving Party in breach of this Agreement;
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(d) was disclosed to the receiving Party, other than under an obligation
of confidentiality to a Third Party, by a Third Party who had no obligation to
the disclosing Party not to disclose such information to others; or
(e) was independently discovered or developed by the receiving Party
without the use of Confidential Information belonging to the disclosing Party.
8.2 THIS AGREEMENT. The Parties agree that the material terms of the Agreement
shall be considered Confidential Information of both Parties. The Parties will
consult with one another and agree on the provisions of the Agreement to be
redacted in any filings made by the Parties with the Securities and Exchange
Commission or as otherwise required by law or regulation. Notwithstanding the
foregoing, each Party shall have the right to disclose in confidence the
material terms of the Agreement to parties retained by such Party to perform
legal, accounting or similar services and who have a need to know such terms in
order to provide such services.
8.3 AUTHORIZED DISCLOSURE. Each Party may disclose Confidential Information
belonging to the other Party to the extent such disclosure is reasonably
necessary in the following:
(a) filing or prosecuting the Licensed Patents;
(b) regulatory filings;
(c) prosecuting or defending litigation;
(d) complying with applicable regulations of governmental authorities;
(e) conducting pre-clinical or clinical trials of Licensed Products; and
(f) medical education, marketing and sales of Licensed Products.
Notwithstanding the foregoing, in the event a Party is required to make a
disclosure of the other Party's Confidential Information pursuant to this
Section 8.3, it will, except where impracticable, give reasonable advance
notice to the other Party of such disclosure and use best efforts to secure
confidential treatment of such information. In any event, the Parties agree to
take all reasonable action to avoid disclosure of Confidential Information
hereunder.
ARTICLE 9
INDEMNIFICATION
9.1 INDEMNIFICATION BY AMGEN. Amgen shall indemnify and hold Progenitor
harmless from any claims of any nature, other than claims by Third Parties
relating
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to patent infringement, arising out of the research, development, marketing
and/or sale of Licensed Products by, on behalf of, or under the authority of
Amgen. Notwithstanding the foregoing, Progenitor shall not be entitled to
indemnification under this Section 9.1 against any liability, damage, cost
(including reasonable attorneys' fees) or expense arising out of Progenitor's
negligence or misconduct.
9.2 INDEMNIFICATION BY PROGENITOR. Progenitor shall indemnify and hold Amgen
harmless from claims of any nature arising out of the making, using, selling or
importing of products claimed in the Licensed Patents by, on behalf of, or under
the authority of Progenitor. Notwithstanding the foregoing, Amgen shall not be
entitled to indemnification under this Section 9.2 against any liability,
damage, cost (including reasonable attorneys' fees) or expense arising out of
Amgen's negligence or misconduct.
9.3 INDEMNIFICATION PROCEDURE. In the event that either Party shall receive
notice of a claim for which indemnification may be sought under Section 9.1 or
9.2 above, such Party shall promptly inform the indemnifying Party and the
indemnifying Party shall decide how to respond to the claim and how to handle
the claim in an efficient manner.
ARTICLE 10
TERMINATION
10.1 TERM. The Agreement will terminate upon the expiration of the last to
expire of the Licensed Patents worldwide.
10.2 DISCONTINUATION OF DEVELOPMENT. In the event Amgen shall at any time
elect to discontinue all development and commercialization activities relating
to Licensed Products, Amgen will notify Progenitor in writing of such election
and upon Progenitor's receipt of such notification, this Agreement will
terminate and all licenses under the Licensed Patents granted to Amgen and its
Affiliates hereunder will revert to Progenitor.
10.3 TERMINATION OF LICENSES. Amgen shall have the right, at any time, upon
sixty(60) days written notice to Progenitor to terminate, in whole or in
part, any of the licenses under the Licensed Patents granted to Amgen and its
Affiliates hereunder. Upon Amgen's termination of all licenses under the
Licensed Patents granted to Amgen and its Affiliates hereunder all such
licenses will revert to Progenitor and this Agreement will terminate.
10.4 TERMINATION FOR DEFAULT.
(a) AMGEN. Upon the Default by Amgen under this Agreement, Progenitor
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may terminate this Agreement by written notice to Amgen and upon Amgen's receipt
of such notice, all licenses under the Licensed Patents granted to Amgen and its
Affiliates hereunder will revert to Progenitor.
(b) PROGENITOR. Upon the Default by Progenitor under this Agreement,
Amgen shall be relieved of its obligations to pay Royalties and Milestone
Payments to Progenitor hereunder for any events occurring during the period in
which the Default shall remain uncured.
10.5 INSOLVENCY OR BANKRUPTCY.
(a) INSOLVENT PARTY. Either Party may, in addition to any other remedies
available to it by law or in equity, terminate this Agreement, in whole or in
part, by written notice to the other Party (the "Insolvent Party") in the event
the Insolvent Party shall have become insolvent or bankrupt, or shall have made
an assignment for the benefit of its creditors, or there shall have been
appointed a trustee or receiver of the Insolvent Party or for all or a
substantial part of its property, or any case or proceeding shall have been
commenced or other action taken by or against the Insolvent Party in bankruptcy
or seeking reorganization, liquidation, dissolution, winding-up arrangement,
composition or readjustment of its debts or any other relief under any
bankruptcy, insolvency, reorganization or other similar act or law of any
jurisdiction now or hereafter in effect, or there shall have been issued a
warrant of attachment, execution, distraint or similar process against any
substantial part of the property of the Insolvent Party, and any such event
shall have continued for sixty (60) days undismissed, unbonded and undischarged.
(b) RIGHTS IN BANKRUPTCY. All rights and licenses granted under or
pursuant to this Agreement by Progenitor are, and shall otherwise be deemed to
be, for purposes of Section 365 (n) of the United States Bankruptcy Code,
licenses of rights to "intellectual property" as defined under Section 101 of
the United States Bankruptcy Code. The Parties agree that the Parties, as
licensor and licensee of such rights under this Agreement, shall retain and may
fully exercise all of their rights and elections under the United States
Bankruptcy Code. The Parties further agree that, in the event of the
commencement of a bankruptcy proceeding by or against either Party under the
United States Bankruptcy Code, the Party hereto which is not a Party to such
proceeding shall be entitled to a complete duplicate of (or complete access to,
as appropriate) any such intellectual property and all embodiments of such
intellectual property, and same, if not already in the their possession, shall
be promptly delivered to them (i) upon any such commencement of a bankruptcy
proceeding upon their written request therefor, unless the Party subject to such
proceeding elects to continue to perform all of their obligations under this
Agreement, or (ii) if not delivered under (i) above, upon the rejection of this
Agreement by or on behalf of the Party subject to such proceeding upon written
request therefor by any non-subject Party.
(c) LICENSES UPON BANKRUPTCY. Upon the termination of this Agreement by
Progenitor pursuant to this Section 10.5, all of the Parties' rights and
obligations
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set forth in this Agreement will terminate and all licenses under the Licensed
Patents granted to Amgen and its Affiliates hereunder will revert to Progenitor.
Upon the termination of this Agreement by Amgen pursuant to this Section 10.5,
(i) Amgen will retain all licenses to the Licensed Patents granted to Amgen and
its Affiliates hereunder, subject to the payment by Amgen to Progenitor of all
fees, Milestone Payments and Royalties as set forth in Article 5, and (ii)
except as set forth in (i) above, all of the Parties' rights and obligations set
forth in this Agreement shall terminate.
10.6 ACCRUED RIGHTS, SURVIVING OBLIGATIONS. Termination, relinquishment or
expiration of this Agreement for any reason shall be without prejudice to any
rights which shall have accrued to the benefit of either Party prior to such
termination, relinquishment or expiration. Such termination, relinquishment or
expiration shall not relieve either Party from obligations accrued under
Articles 8 and 9.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1 ASSIGNMENT. Neither this Agreement nor any interest hereunder shall be
assignable by either Party without the prior written consent of the other Party.
This Agreement shall be binding upon the successors and permitted assigns of the
Parties and the name of a Party appearing herein shall be deemed to include the
names of such Party's successors and permitted assigns to the extent necessary
to carry out the intent of this Agreement. Any assignment not in accordance
with this Section 11.1 shall be void.
11.2 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and deliver
such further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of the Agreement.
11.3 FORCE MAJEURE. Neither Party shall be liable to the other for loss or
damages or shall have any right to terminate this Agreement for any default or
delay attributable to any Force Majeure, if the Party affected shall give prompt
notice of any such cause to the other Party. The Party giving such notice shall
thereupon be excused from such of its obligations hereunder as it is thereby
disabled from performing for so long as it is so disabled, PROVIDED, HOWEVER,
that such affected Party commences and continues to take reasonable and diligent
actions to cure such cause.
11.4 PUBLIC ANNOUNCEMENTS. If either Party desires to, or is required by law
to, make a public announcement concerning this Agreement, the Licensed Patents
and/or Licensed Products, such Party shall give reasonable prior advance notice
of the proposed text of such announcement to the other Party for its prior
review and approval. The Parties agree to make no public announcement regarding
this
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Agreement other than those required by law. The text of all public
announcements regarding this Agreement shall be mutually agreed by the Parties,
PROVIDED, HOWEVER, that neither Party shall be prohibited from making any
announcements required by law so long as the other Party shall have had an
opportunity to comment on the text of such announcement.
11.5 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by facsimile
transmission (receipt verified), telexed, mailed by registered or certified mail
(return receipt requested), postage prepaid, or sent by express courier service,
to the parties at the following addresses (or at such other address for a Party
as shall be specified by like notice, PROVIDED, HOWEVER, that notices of a
change of address shall be effective only upon receipt thereof):
If to Amgen, addressed to:
Amgen Inc.
Amgen Center
1840 DeHavilland Drive
Thousand Oaks, California 91320
Attention: Secretary
With a copy to: Vice President, Product Licensing
Facsimile: (805) 499-8011
If to Progenitor, addressed to:
Progenitor, Inc.
1507 Chambers Road
Columbus, Ohio 43212-1566
Attention: Vice President, Corporate Development
With a copy to: Chief Executive Officer
Facsimile: (614) 488-0404
11.6 AMENDMENT. No amendment, modification or supplement of any provision of
this Agreement shall be valid or effective unless made in writing and signed by
a duly authorized officer of each Party.
11.7 WAIVER. No provision of the Agreement shall be waived by any act,
omission or knowledge of any Party or its agents or employees except by an
instrument in writing expressly waiving such provision and signed by a duly
authorized officer of the waiving Party.
11.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which need not contain the signature of more than one
Party but all such counterparts taken together shall constitute one and the same
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agreement.
11.9 DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are for
convenience only, and shall be of no force or effect in construing or
interpreting any of the provisions of this Agreement.
11.10 GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the substantive laws of the State of California and the Parties
hereby submit to the exclusive jurisdiction of the California courts, both state
and federal.
11.11 SEVERABILITY. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
11.12 ENTIRE AGREEMENT OF THE PARTIES. This Agreement and the Stock Purchase
Agreement of even date herewith will constitute and contain the complete, final
and exclusive understanding and agreement of the Parties and cancels and
supersedes any and all prior negotiations, correspondence, understandings and
agreements, whether oral or written, between the Parties respecting the subject
matter thereof.
11.13 DISPUTE RESOLUTION. The Parties agree that in the event of a dispute
between them arising from, concerning or in any way relating to this Agreement,
the Parties shall undertake good faith efforts to resolve any such dispute in
good faith. In the event the Parties shall be unable to resolve any such
dispute, the matter shall be referred to the Chief Executive Officer of Amgen
and the Chief Executive Officer of Progenitor for further review and resolution.
If after such efforts, the Parties are unable to resolve such dispute, a Party
may seek any remedy available under applicable law.
11.14 INDEPENDENT CONTRACTORS. The relationship between Amgen and Progenitor
created by this Agreement is one of independent contractors and neither Party
shall have the power or authority to bind or obligate the other except as
expressly set forth in this Agreement.
11.15 USE OF NAME. No right, express or implied, is granted to either Party by
this Agreement to use in any manner any trademark or trade name of the other
Party including the names "Amgen" and "Progenitor" without the prior written
consent of the owning Party.
11.16 DAMAGES. In no event shall either Party be responsible for any
consequential damages incurred by the other Party in connection with this
Agreement, including, without limitation, lost profits or opportunities or
injury to
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Person or property resulting from the termination of this Agreement.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
AMGEN INC.
/s/ George A. Vandeman
By: George A. Vandeman
Title: Senior Vice President,
General Counsel and Secretary
PROGENITOR, INC.
/s/ Douglass B. Given
By: Douglass B. Given
Title: President and
Chief Executive Officer
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Exhibit "A"
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PROGENITOR, INC.,
A DELAWARE CORPORATION
AND
AMGEN INC.,
A DELAWARE CORPORATION
STOCK PURCHASE AGREEMENT
DECEMBER 31, 1996
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TABLE OF CONTENTS
PAGE
1. Purchase and Sale of Stock. . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Sale and Issuance of Stock. . . . . . . . . . . . . . . . . . . . . 1
1.2. Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3. No Fractional Shares. . . . . . . . . . . . . . . . . . . . . . . . 2
1.4. Registration of Common Stock. . . . . . . . . . . . . . . . . . . . 2
1.5. Procedures at Closing Date. . . . . . . . . . . . . . . . . . . . . 3
2. Representations and Warranties of the Company . . . . . . . . . . . . . . 3
2.1. Organization, Good Standing and Qualification . . . . . . . . . . . 3
2.2. Capitalization and Voting Rights. . . . . . . . . . . . . . . . . . 3
2.3. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4. Valid Issuance of Stock . . . . . . . . . . . . . . . . . . . . . . 4
2.5. Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . 4
2.6. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.7. Proprietary Information and Inventions Agreements . . . . . . . . . 5
2.8. Compliance with Other Instruments . . . . . . . . . . . . . . . . . 5
2.9. Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.10. Registration Rights. . . . . . . . . . . . . . . . . . . . . . . . 6
2.11. Corporate Documents. . . . . . . . . . . . . . . . . . . . . . . . 6
2.12. Title to Property and Assets . . . . . . . . . . . . . . . . . . . 6
2.13. Tax Returns, Payments and Elections. . . . . . . . . . . . . . . . 6
2.14. Absence of Changes . . . . . . . . . . . . . . . . . . . . . . . . 7
2.15. SEC Filings; Financial Statements. . . . . . . . . . . . . . . . . 7
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2.16. Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . 8
3. Representations and Warranties of the Investor. . . . . . . . . . . . . . 8
3.1. Authorization, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2. Purchase Entirely for Own Account . . . . . . . . . . . . . . . . . 8
3.3. Disclosure of Information . . . . . . . . . . . . . . . . . . . . . 9
3.4. Investment Experience . . . . . . . . . . . . . . . . . . . . . . . 9
3.5. Accredited Investor . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6. Restricted Securities . . . . . . . . . . . . . . . . . . . . . . . 9
3.7. Further Limitations on Disposition. . . . . . . . . . . . . . . . .10
4. Certain Transfer Restrictions . . . . . . . . . . . . . . . . . . . . . .10
4.1. Right of First Purchase . . . . . . . . . . . . . . . . . . . . . .10
4.2. Lock-Up Agreement . . . . . . . . . . . . . . . . . . . . . . . . .10
4.3. Stop Transfer Instructions. . . . . . . . . . . . . . . . . . . . .11
5. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . .11
5.1. Termination of Registration Rights. . . . . . . . . . . . . . . . .11
5.2. Demand Registration . . . . . . . . . . . . . . . . . . . . . . . .11
5.3. Piggy-Back Registrations. . . . . . . . . . . . . . . . . . . . . .13
5.4. Obligations of the Company. . . . . . . . . . . . . . . . . . . . .14
5.5. Certain Holder Obligations. . . . . . . . . . . . . . . . . . . . .16
5.6. Expenses of Registration. . . . . . . . . . . . . . . . . . . . . .17
5.7. Adjustments for Stock Splits. . . . . . . . . . . . . . . . . . . .17
5.8. Delay of Registration . . . . . . . . . . . . . . . . . . . . . . .17
5.9. Certain Reports . . . . . . . . . . . . . . . . . . . . . . . . . .18
5.10. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . .18
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5.11. Assignment of Registration Rights. . . . . . . . . . . . . . . . .21
5.12. "Market Stand-Off" Agreement . . . . . . . . . . . . . . . . . . .21
5.13. Restrictions on Certain Sales by the Company . . . . . . . . . . .22
6. Conditions of the Investor's Obligations at Closing . . . . . . . . . . .22
6.1. Representations and Warranties. . . . . . . . . . . . . . . . . . .22
6.2. Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
6.3. Compliance Certificate. . . . . . . . . . . . . . . . . . . . . . .23
6.4. License Agreement . . . . . . . . . . . . . . . . . . . . . . . . .23
6.5. Opinion of Company Counsel. . . . . . . . . . . . . . . . . . . . .23
6.6. Units Offering. . . . . . . . . . . . . . . . . . . . . . . . . . .23
7. Conditions of the Company's Obligations at Closing. . . . . . . . . . . .23
7.1. Representations and Warranties. . . . . . . . . . . . . . . . . . .23
7.2. Performance of Obligations. . . . . . . . . . . . . . . . . . . . .23
7.3. Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . .23
7.4. License Agreement . . . . . . . . . . . . . . . . . . . . . . . . .24
7.5. Units Offering. . . . . . . . . . . . . . . . . . . . . . . . . . .24
8. Standstill Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . .24
8.1. Standstill Agreement. . . . . . . . . . . . . . . . . . . . . . . .24
8.2. Exceptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
9. Certain Initial Public Offering Matters . . . . . . . . . . . . . . . . .27
9.1. Registration of Stock . . . . . . . . . . . . . . . . . . . . . . .27
9.2. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . .27
9.3. Common Stock Purchase . . . . . . . . . . . . . . . . . . . . . . .27
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10. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
10.1. Survival of Warranties . . . . . . . . . . . . . . . . . . . . . .27
10.2. Public Announcements . . . . . . . . . . . . . . . . . . . . . . .27
10.3. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . .28
10.4. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . .28
10.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . .28
10.6. Titles and Subtitles . . . . . . . . . . . . . . . . . . . . . . .28
10.7. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
10.8. Finder's Fees. . . . . . . . . . . . . . . . . . . . . . . . . . .28
10.9. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
10.10. Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . .29
10.11. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . .29
10.12. Breach; Status of License Agreement . . . . . . . . . . . . . . .29
10.13. Specific Enforcement. . . . . . . . . . . . . . . . . . . . . . .30
10.14. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . .30
10.15. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . .30
10.16. Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . .30
10.17. Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
11. Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . .31
EXHIBIT A Promissory Note
EXHIBIT B Opinion of Counsel for the Company
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of
December 31, 1996, by and between PROGENITOR, INC., a Delaware corporation (the
"Company"), and AMGEN INC., a Delaware corporation (the "Investor"). Certain
capitalized terms not otherwise defined herein shall have the meanings as
defined in Section 11.
RECITALS
WHEREAS, the Company and the Investor are entering into that certain
License Agreement (the "License Agreement") of even date herewith; and
WHEREAS, in connection with the License Agreement, the Company
desires to sell to the Investor and the Investor desires to purchase from the
Company, shares of the Company's Common Stock, Class A, par value $.001 per
share (the "Common Stock").
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF STOCK
1.1. SALE AND ISSUANCE OF STOCK
The Investor shall subject to the terms and conditions of this
Agreement, purchase, and the Company agrees to issue and sell to the Investor on
the Closing Date (as defined below), (i) in connection with the Company's
Initial Public Offering shares of the Common Stock with an aggregate Fair Market
Value (as defined below) of $4,500,000 for a purchase price payable in cash of
$4,500,000 (the "Cash Common Stock"), and (ii) in connection with the Company's
Initial Public Offering or as contemplated in Section 1.2 below shares of the
Common Stock with an aggregate Fair Market Value of $1,000,000 (the "Note Common
Stock") for a purchase price payable in cash of $.001 per share and a promissory
note in the amount of $1,000,000 (subject to the provisions of Section 1.2
hereof) in the form attached hereto as EXHIBIT A (the "Promissory Note").
1.2. CLOSING DATE
The purchase and sale of the Common Stock shall take place at the
offices of Morrison & Foerster LLP, 425 Market Street, San Francisco,
California, at 10:00 a.m., on the closing date of the Company's Initial Public
Offering (the "Closing Date"). The Company may elect to require the Investor to
purchase one-half of the Note Common Stock on December 31, 1997 and may elect to
require the Investor to purchase the remaining unpurchased Note Common Stock on
December 31, 1998 in each case only if the Initial Public Offering has not
occurred prior to such date. To the extent that the Company makes an election
to require the Investor's purchase of Note Common Stock on either of such dates
then the date in question shall be deemed the Closing Date for all purposes of
this Agreement with respect to the Note Common Stock required to be purchased on
such date, including the determination of the Fair Market Value of such Note
Common Stock and the satisfaction of the applicable closing conditions,
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including the delivery of closing certificates and legal opinions as required by
Sections 6 and 7 hereof. To the extent that the Company elects to require the
purchase of Note Common Stock on either or both of such dates, (and either or
both of such dates is prior to the Initial Public Offering), then the obligation
of the Investor to purchase Note Common Stock from the Company in connection
with the Company's Initial Public Offering shall be proportionately reduced and
the principal amount of the Promissory Note required to be delivered in
connection with the purchase thereof shall also be proportionately reduced
(I.E., $500,000 in the event that one installment of Note Common Stock with a
Fair Market Value of $500,000 has been purchased) prior to the Initial Public
Offering. The purchase price for any Note Common Stock required to be purchased
on December 31, 1997 or December 31, 1998 shall be payable entirely in cash in
the amount of $500,000. The Company may defer the election to require purchase
of either or both such installments of Note Common Stock until the Initial
Public Offering in which case any such deferred installment shall also be
purchased for cash in the amount of $500,000. The obligation of the Investor to
purchase the Cash Common Stock shall arise only in connection with the
occurrence of the Company's Initial Public Offering. To the extent that the
Initial Public Offering has not yet occurred, the Investor shall have no
obligation to purchase the Cash Common Stock.
1.3. NO FRACTIONAL SHARES
No fractional shares shall be issued upon the sale of any Common
Stock to the Investor pursuant to this Agreement, and the number of shares of
Common Stock to be issued to the Investor shall be rounded to the nearest whole
share.
1.4. REGISTRATION OF COMMON STOCK
The Company will use its reasonable efforts to cause the sale of
shares of Common Stock to the Investor in connection with the Initial Public
Offering to be registered in the registration statement applicable to the
Initial Public Offering or to be registered in a separate registration statement
at the time of such Initial Public Offering. If the Company is not able to
register the issuance to the Investor of such shares of Common Stock, in whole
or in part, for any reason in connection with such Initial Public Offering
notwithstanding such reasonable efforts, the Investor's obligation to purchase
shares of Common Stock in connection with the Initial Public Offering will not
be diminished and all shares for which the issuance may not be registered will
instead be issued in a private placement to the Investor at the same price that
would have been applicable in a direct purchase as part of the Initial Public
Offering (as soon as such a private placement may be consummated under
applicable law) and such privately placed shares shall be subject to the
registration rights provided in Section 5 hereof such that the full $5,500,000
in Fair Market Value of Common Stock contemplated to be purchased hereunder is
purchased by the Investor either simultaneously with the Initial Public Offering
or as soon thereafter as may be practicable. Any Note Common Stock required to
be purchased prior to the Company's Initial Public Offering shall be issued in a
private placement to the Investor and shall be subject to the registration
rights provided in Section 5.
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1.5. PROCEDURES AT CLOSING DATE
On the Closing Date, the Company shall deliver to the Investor,
certificates for the Common Stock in such denominations as the Investor has
requested, dated the date thereof, against (i) payment by the Investor of the
cash portion of the purchase price by cashier's check, wire transfer or any
combination thereof, and (ii) execution and delivery by the Investor of the
Promissory Note (to the extent that the Note Common Stock is being purchased in
connection with the Company's Initial Public Offering). The specific procedures
outlined in Section 1.2 shall also be applicable in the event of any Closing
Date not involving the purchase of all of the Cash Common Stock and Note Common
Stock. The specific procedures outlined in the last sentence of the definition
of "Initial Public Offering" shall also be applicable in the event of a Closing
Date in connection with an Initial Public Offering involving the sale of units.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Investor that, except as
set forth on a Schedule of Exceptions (the "Schedule of Exceptions") furnished
to the Investor:
2.1. ORGANIZATION, GOOD STANDING AND QUALIFICATION
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on its business as now conducted and as
proposed to be conducted. The Company is duly qualified to transact business
and is in good standing in Ohio and each other jurisdiction in which the failure
to so qualify would have a material adverse effect on its business or
properties.
2.2. CAPITALIZATION AND VOTING RIGHTS
(a) The authorized capital stock of the Company as of the date
of this Agreement consists of:
(i) PREFERRED STOCK. 3,000,000 shares of Preferred Stock, $.01
par value per share (the "Preferred Stock") of which 2,120,000 shares have been
designated Series A Preferred Stock (the "Series A Preferred Stock") and 880,000
shares have been designated Series B Preferred Stock (the "Series B Preferred
Stock," and together with the Series A Preferred Stock, the "Preferred Stock").
The rights, privileges and preferences of the Preferred Stock are as stated in
the Company's Certificate of Incorporation, as amended to date; and
(ii) COMMON STOCK. 39,000,000 shares of the Common Stock, of
which 5,771,808 shares are issued and outstanding.
(b) In addition, as of the date of this Agreement: except as
set forth in Schedule 2.2(b) to the Schedule of Exceptions, (i) there are
2,700,000 shares of the Common Stock reserved for issuance under the Company's
1992 Stock Option Plan and 1996 Stock Incentive Plan, under which options to
purchase 1,394,550 shares of Common Stock are
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outstanding; (ii) an additional 200,000 shares of Common Stock are available for
issuance under the Company's 1996 Employee Stock Purchase Plan; (iii) the
Company has outstanding warrants to purchase 34,901 shares of Series B Preferred
Stock; (iv) there is not, (a) any subscription, warrant, option, convertible
security or other right (contingent or otherwise) to purchase or acquire any
shares of capital stock of the Company, (b) any commitment of the Company to
issue any subscription, warrant, option, convertible security or other such
right to issue or distribute to holders of any shares of its capital stock any
evidences of indebtedness or assets of the Company or (c) any obligation of the
Company (contingent or otherwise) to purchase, redeem or otherwise acquire any
shares of its capital stock or any interest therein or to pay any dividend or
make any other distribution in respect thereof; and (v) no Person is entitled to
any preemptive or similar right with respect to the issuance of any capital
stock of the Company.
(c) All outstanding shares of the Company's Common Stock and
Preferred Stock as of the date of this Agreement are duly and validly authorized
and issued, fully paid and nonassessable, and were issued in accordance with the
registration or qualification provisions of the Securities Act and any relevant
state securities laws or pursuant to valid exemptions therefrom.
2.3. AUTHORIZATION
All corporate action on the part of the Company, its officers,
directors and stockholders necessary for the authorization, execution and
delivery of this Agreement and the License Agreement, the performance of all
obligations of the Company hereunder and thereunder and the authorization, sale
and delivery of the Common Stock being sold hereunder has been taken and this
Agreement and the License Agreement constitute valid and legally binding
obligations of the Company enforceable in accordance with their respective
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies, and (iii) to the extent the enforceability of the indemnification
provisions contained in this Agreement may be limited by applicable laws.
2.4. VALID ISSUANCE OF STOCK
Except as set forth in Schedule 2.4 to the Schedule of Exceptions,
the Common Stock that is purchased by the Investor hereunder, when issued, sold
and delivered in accordance with the terms of this Agreement for the
consideration expressed herein, will be duly and validly issued, fully paid, and
nonassessable, and not subject to preemptive or any other similar rights of the
stockholders of the Company or others, and free, at the time of issuance, of all
restrictions on transfer other than restrictions on transfer imposed under this
Agreement and under applicable state and federal securities laws.
2.5. GOVERNMENTAL CONSENTS
No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state or
local governmental authority on the
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part of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement, except for such filings as may be
required to be made pursuant to applicable federal or state securities laws or
with any stock exchange (or the Nasdaq National Market or other quotation system
of the National Association of Securities Dealers, Inc.) on which the Common
Stock may be listed, and except consents, approvals, authorizations or orders
the absence of which, either individually or in the aggregate, would not have a
material adverse effect on the business, properties, operations or financial
condition of the Company taken as a whole.
2.6. LITIGATION
There is no action, suit, proceeding or investigation pending or
threatened against the Company as of the date of this Agreement that questions
the validity of this Agreement or the License Agreement, or the right of the
Company to enter into such agreements, or to consummate the transactions
contemplated hereby or thereby, or that might result, either individually or in
the aggregate, in any material adverse changes in the assets, condition, affairs
or prospects of the Company, financially or otherwise, nor is the Company aware
that there is any basis for the foregoing. The Company is not as of the date of
this Agreement a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality.
2.7. PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS
Each key employee, officer and consultant of the Company with access
to the Company's proprietary information has executed an agreement concerning
invention assignment, nondisclosure and proprietary information. The Company,
after reasonable investigation, is not aware as of the date of this Agreement
that any of its employees, officers or consultants are in violation thereof.
2.8. COMPLIANCE WITH OTHER INSTRUMENTS
The Company is not as of the date of this Agreement in violation or
default of any provision of its Certificate of Incorporation or Bylaws (each as
amended to date), or of any instrument, judgment, order, writ, decree or
contract to which it is a party or by which it is bound, or, to the best of its
knowledge as of the date of this Agreement, of any provision of any federal or
state statute, rule or regulation applicable to the Company, which violation or
default would materially and adversely affect the business, assets, liabilities,
financial condition, operations or prospects of the Company. The execution,
delivery and performance of this Agreement and the License Agreement, and the
consummation of the transactions contemplated hereby and thereby will not result
in any such material violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree or contract or an
event that results in the creation of any lien, charge or encumbrance upon any
assets of the Company or the suspension, revocation, impairment, forfeiture, or
non-renewal of any material permit, license, authorization, or approval
applicable to the Company, its business or operations or any of its assets or
properties. There is no such violation or default as of the date of this
Agreement which,
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with the passage of time or giving of notice or both, would constitute a
violation or default that materially and adversely affects the business, assets,
liabilities, financial condition, operations or prospects of the Company.
2.9. DISCLOSURE
The Company has fully provided the Investor with all the
information that the Investor has requested for deciding whether to purchase the
Common Stock and all information that the Company believes is reasonably
necessary to enable the Investor to make such decision.
2.10. REGISTRATION RIGHTS
Except as set forth in Schedule 2.10 to the Schedule of Exceptions
or as provided in this Agreement, the Company has not as of the date of this
Agreement granted or agreed to grant any registration rights, including
piggyback rights, to any Person.
2.11. CORPORATE DOCUMENTS
The Certificate of Incorporation and Bylaws of the Company in
effect as of the date of this Agreement are in the form attached hereto as
Schedule 2.11 to the Schedule of Exceptions.
2.12. TITLE TO PROPERTY AND ASSETS
As of the date of this Agreement, except as set forth in Schedule
2.12 to the Schedule of Exceptions, the Company owns its property and assets
free and clear of all mortgages, liens, loans and encumbrances, except such
encumbrances and liens that arise in the ordinary course of business and do not
materially impair the Company's ownership or use of such property or assets.
With respect to the property and assets it leases, the Company is in compliance
as of the date of this Agreement with such leases and, to the best of its
knowledge, holds as of the date of this Agreement a valid leasehold interest
free of any liens, claims or encumbrances.
2.13. TAX RETURNS, PAYMENTS AND ELECTIONS
The Company has filed all tax returns and reports as required by
law as of the date of this Agreement. These returns and reports are true and
correct in all material respects. The Company has paid all taxes and other
assessments due as of the date of this Agreement. The provision for taxes of
the Company is adequate for taxes due or accrued as of the date of this
Agreement. No controversy with any government or government agency regarding
tax of any type is pending as of the date of this Agreement as to which the
Company has received notice or, to the best of the Company's knowledge, is
threatened as of the date of this Agreement.
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2.14. ABSENCE OF CHANGES
Between September 30, 1995 and the date of this Agreement, there
has been no material adverse change in the business, assets, liabilities,
financial condition, operations or prospects of the Company.
2.15. SEC FILINGS; FINANCIAL STATEMENTS
(a) The Company's registration statement on Form S-1 (File No.
333-05369) with respect to its proposed Initial Public Offering (the "Form S-1
Registration Statement") (i) was prepared as of the date of its filing in all
material respects in accordance with the requirements of the Securities Act and
(ii) did not as of the date of its filing (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) The Company's registration statement with respect to its
Initial Public Offering (i) will be prepared as of the date it is declared
effective by the SEC in all material respects in accordance with the
requirements of the Securities Act and (ii) will not as of the date it is
declared effective by the SEC (or if amended or superseded by a filing
subsequent to its effectiveness, then on the date of such filing) contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements, in light of the
circumstances under which they were made, not misleading.
(c) The Company has provided to the Investor the unaudited
balance sheet of the Company as of September 30, 1996, and the related unaudited
statements of operations, changes in stockholders' equity and cash flows of the
Company for the fiscal year ended September 30, 1996 (the "Unaudited Financial
Statements"). The Company has presented to the Investor the audited balance
sheet of the Company as of September 30, 1995, and the related audited
statements of operations, changes in stockholders' equity and cash flows of the
Company for the fiscal year ended September 30, 1995 (the "Audited Financial
Statements"). Each of the Audited Financial Statements (including the notes
thereto) and the Unaudited Financial Statements fairly presents the financial
position of the Company as of their respective dates and the results of
operations and changes in cash flows for the respective periods set forth
therein and has been prepared in accordance with generally accepted accounting
principles consistently applied except as otherwise noted therein and subject in
the case of the Unaudited Financial Statements to any normal adjustments which
would not in the aggregate be material in amount or effect arising as a result
of the audit thereof including in connection with the finalization of the
footnotes thereto. As of the date of this Agreement, there has been no material
adverse change in the financial condition or results of operation of the Company
since September 30, 1996 other than as set forth in Schedule 2.15 to the
Schedule of Exceptions.
(d) As of the date of this Agreement, there has been no material
change in the Company's business or operations from the information presented in
the Form S-1 Registration Statement other than (i) as set forth in Schedule 2.15
to the Schedule of Exceptions, or (ii) any
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changes that are merely of a prospective nature such as possible material
business transactions that have not been consummated.
2.16. INTELLECTUAL PROPERTY
To the knowledge of the Company, except as set forth in Schedule
2.16 to the Schedule of Exceptions, it has as of the date of this Agreement
sufficient title and ownership interest with respect to patents, patent
applications, trademarks, service marks, trade names, copyrights, trade secrets,
proprietary rights and proprietary processes as may be necessary to conduct its
business as proposed to be conducted after the date hereof without conflict with
or infringement of the right of others.
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
The Investor understands the Common Stock to be received by the Investor
under this Agreement may be deemed to be "restricted securities" under the
Securities Act. The Investor also understands that to the extent that the
Common Stock to be received by the Investor does so constitute "restricted
securities" it is being offered and sold pursuant to an exemption from
registration contained in the Securities Act based in part upon the Investor's
representations contained in the Agreement. The Investor hereby represents and
warrants to the Company that (as of the date of this Agreement with respect to
Section 3.1):
3.1. AUTHORIZATION, ETC.
The Investor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Investor has all
necessary power and authority under all applicable provisions of law to execute
and deliver this Agreement and the License Agreement and to carry out and
perform its obligations hereunder and thereunder. All corporate action on the
Investor's part required for the authorization, execution and delivery of this
Agreement and the License Agreement has been taken prior to the date hereof.
This Agreement and the License Agreement each constitutes the legal, valid and
binding obligation of the Investor, enforceable in accordance with its terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors' rights, (ii) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies, and
(iii) to the extent that the enforceability of the indemnification provisions
contained in this Agreement may be limited by applicable laws.
3.2. PURCHASE ENTIRELY FOR OWN ACCOUNT
This Agreement is made with the Investor in reliance upon the
Investor's representation to the Company, which by the Investor's execution of
this Agreement the Investor hereby confirms, that any Common Stock being
acquired by the Investor is being acquired for investment for the Investor's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the Investor has no present intention
of selling, granting any participation in, or otherwise distributing the same.
By executing this Agreement, the Investor further represents that the Investor
does not have any contract, undertaking,
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agreement or arrangement with any person to sell, transfer or grant
participations to any third person, with respect to any of the Common Stock
being acquired under this Agreement.
3.3. DISCLOSURE OF INFORMATION
Assuming the accuracy in all material respects of the
representations and warranties made by the Company hereunder, the Investor
believes it has received all the information it considers necessary or
appropriate for deciding whether to purchase the Common Stock. The Investor
further represents that it has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the Common Stock
that may be issued to it under this Agreement and the business, properties,
prospects and financial condition of the Company.
3.4. INVESTMENT EXPERIENCE
The Investor has substantial experience in evaluating and investing
in securities in development stage companies so that it is capable of evaluating
the merits and risks of its investment in the Company and has the capacity to
protect its own interests. The Investor has reviewed the "Risk Factors" set
forth in the Company's Form S-1 Registration Statement. The Investor
understands that its investment in the Common Stock is speculative and involves
a high degree of risk of loss of a substantial portion or all of the Investor's
investment. The Investor must bear the economic risk of this investment
indefinitely with respect to any Common Stock that constitutes "restricted
securities", except if the sale thereof is subsequently registered or an
exemption from registration is available. The Investor understands that with
respect to any Common Stock that constitutes "restricted securities", there is
no assurance that any exemption from registration for the resale thereof under
the Securities Act will be available and that, even if available, the exemption
may not allow the Investor to transfer all or any portion of such Common Stock
under the circumstances, in the amounts or at the times the Investor might
propose.
3.5. ACCREDITED INVESTOR
The Investor is an "accredited investor" within the meaning of
Securities and Exchange Commission ("SEC") Rule 501 of Regulation D, as
presently in effect.
3.6. RESTRICTED SECURITIES
The Investor understands that the shares of Common Stock it is
purchasing, unless the sale thereof is made in a "public offering" registered
under the Securities Act within the meaning of Rule 144 under the Securities
Act, are characterized as "restricted securities" under the federal securities
laws inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances. In this connection, the Investor represents
that it is familiar with SEC Rule 144, as presently in effect, and understands
the resale limitations imposed hereby and by the Securities Act.
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3.7. FURTHER LIMITATIONS ON DISPOSITION
Without in any way limiting the representations set forth above,
the Investor further agrees not to make any disposition of all or any portion of
the Common Stock that constitutes "restricted securities" unless and until the
Investor shall have complied with the right of first purchase set forth in
Section 4 hereof and any transfer restrictions contained in this Agreement and
any permitted transferee has agreed in writing for the benefit of the Company to
be bound by this Agreement; and
(a) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or
(b) (i) The Investor shall have notified the Company of the
proposed disposition, and (ii) if reasonably requested by the Company, the
Investor shall have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company that such disposition will not require registration
of such shares under the Securities Act. It is agreed that the Company will not
require opinions of counsel for transactions made pursuant to Rule 144 except in
unusual circumstances.
4. CERTAIN TRANSFER RESTRICTIONS
4.1. RIGHT OF FIRST PURCHASE
In the event, at any time after the date of this Agreement, the
Investor or any Holder proposes to sell shares of Common Stock pursuant to the
registration rights contained in Section 5, the Company shall, for a period of
no longer than twenty (20) days thereafter, have the option, in lieu of
registering such shares of Common Stock, to give written notice to the Investor
or Holder that it will purchase such shares for the Fair Market Value thereof.
The Company may assign its right of purchase to a third Person. In the event
that the Company or such third Person has not completed the purchase of such
shares of Common Stock pursuant to the terms of such purchase right within
five (5) days of giving notice under this Section 4.1, the Investor or Holder,
as the case may be, shall be permitted to sell such shares of Common Stock in
accordance with the registration rights granted hereunder.
4.2. LOCK-UP AGREEMENT
Notwithstanding the terms of Sections 4.1, the Investor hereby agrees that
for a period of one hundred eighty (180) days after the Company's Initial Public
Offering, it will not directly or indirectly, sell, offer, contract to sell,
grant any option to sell, transfer the economic risk of ownership in, make any
short sale, pledge or otherwise dispose of, any shares of Common Stock, or any
securities convertible into or exchangeable or exercisable for or any other
rights to purchase or acquire Common Stock, without the prior written consent of
the Company. The Investor further agrees to enter into a lock-up agreement with
the managing underwriters for the Company's Initial Public Offering that is
consistent with the Investor's commitment made pursuant to the immediately
preceding sentence of this Section 4.2.
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4.3. STOP TRANSFER INSTRUCTIONS
In order to enforce any transfer restriction or lock-up agreement
contemplated by this Agreement, the Company may impose stop transfer
instructions restricting transfers in violation thereof. Any attempted transfer
made in violation of any such restrictions shall be void and without effect.
5. REGISTRATION RIGHTS
5.1. TERMINATION OF REGISTRATION RIGHTS
The right of any Holder to request registration or inclusion in any
registration pursuant to this Section 5 shall terminate at such time as all
shares of Registrable Securities held by such Holder may immediately be sold
under Rule 144 (or any similar provision then in force) within a three (3) month
period (whether or not Rule 144(k) is then applicable).
5.2. DEMAND REGISTRATION
(a) If at any time commencing six (6) months after the Initial
Public Offering, any Holder shall notify the Company in writing that it intends
to offer or cause to be offered for public sale Registrable Securities held by
it which shares have an anticipated aggregate offering price, net of
underwriting discounts and commissions, equal to more than $1,000,000, based on
the market price of the shares of Common Stock at the time the Holder so
notifies the Company (a "Demand Registration"), then the Company will:
(i) promptly give written notice of the proposed registration or
qualification to all other Holders of Registrable Securities, which Holders may
request in writing within ten (10) days after receipt of such notice that
Registrable Securities held by them be included in such Demand Registration, and
the number of Registrable Securities requested to be so included shall be deemed
a part of such Demand Registration; and
(ii) as soon as practicable use reasonable efforts to effect such
registration or qualification (including, without limitation, the execution of
an undertaking to file post-effective amendments, and appropriate compliance
with any other governmental requirements or regulations) as may be so requested
and as is reasonably necessary to permit or facilitate the sale and distribution
of all or such portion of such Holder's or Holders' Registrable Securities as is
specified in such request; PROVIDED THAT the Company will not be obligated to
effect more than two Demand Registrations pursuant to a request under this
Section; provided, further, however, that a registration shall not count as a
Demand Registration pursuant to Section 5.2 unless all of the Registrable
Securities requested to be included in such registration are sold pursuant to
such registration statement.
(b) The Company shall not be required to file a registration
statement with the SEC pursuant to this Section 5.2 at any time during the
period beginning when it has commenced registration procedures (whether by means
of holding discussions with an underwriter or commencing preparation of the
registration statement) with respect to the filing of another
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registration statement (other than on Form S-8 or S-4) of the Company with the
SEC which it in good faith expects to file within thirty (30) days and ending
the earliest of (A) the abandonment of such other offering, (B) six months after
the effective date of such other registration statement relating to the other
offering or, (C) the termination of any market stand-off time period agreed to
pursuant to Section 5.12(b). The Company shall have the right to defer the
filing of a registration statement (the "Delay Right") with the SEC for up to
forty-five (45) days after such filing would otherwise be required hereunder if
the Company shall furnish to the Holder a certificate signed by the President of
the Company stating that, in the good faith judgment of the Company, it would be
materially detrimental to the interests of the Company for such registration
statement to be filed at such time, and if the Company shall have furnished such
certificate then the Company shall have the right to defer the filing of such
registration statement for an additional period of up to ninety (90) days if the
Company shall furnish to the Holder a copy of a resolution of the Board of
Directors, certified by the Secretary of the Company, to the effect that, in the
good faith judgment of the Board of Directors, it would be materially
detrimental to the interests of the Company for such registration statement to
be filed at such time because: (A) the filing of registration statement could
jeopardize or delay any contemplated material transaction other than a financing
plan involving the Company or would require the disclosure of material
information that the Company has a bona fide business purpose for preserving as
confidential; or (B) the Company is then not able to comply with SEC
requirements applicable to the requested registration (notwithstanding its
reasonable efforts to so comply). Notwithstanding the foregoing, the Company
shall not be permitted to exercise a Delay Right more than twice in any two year
period and the Company shall not impose a Delay Right for any period that is
longer than necessary to address the circumstance or circumstances that exist
during the period in which the Delay Right is invoked which cause the Company to
require the Delay Right. The Company shall not be required to effect more than
one registration during any twelve (12) month period pursuant to this
Section 5.2.
(c) If the Holder or Holders of a majority in number of the
Registrable Securities to be registered in a Demand Registration under this
Section 5 so elect, the offering of such Registered Securities pursuant to such
Demand Registration shall be in the form of an underwritten offering. The
underwriter will be selected by the Company and shall be reasonably acceptable
to a majority in interest of the participating Holders. In such event, the
right of any Holder to include Registrable Securities in such registration shall
be conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders
and such Holder) to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company as provided in subsection 5.4(e)) enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting. Subject to subsection 5.2(d), the Company and at the option of
the Company any other holder of Common Stock may include in any registration
pursuant to this Section 5.2 additional shares of Common Stock.
(d) Notwithstanding any other provision of this Section 5.2, if
the underwriters determine, in good faith, that marketing factors require a
limitation of the number of shares to be underwritten, the underwriters may
limit in their sole discretion the number of
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Registrable Securities and other shares of Common Stock to be included in the
registration and underwriting subject to the terms of this subsection 5.2(d).
The Company shall so advise all holders of the Company's securities that would
otherwise be registered and underwritten pursuant to such registration, and the
number of shares of such securities, including Registrable Securities, that may
be included in the registration and underwriting shall be allocated in the
following manner: shares, other than Registrable Securities and other
securities requested to be included in such registration by stockholders
pursuant to other registration rights shall be excluded, and, if a limitation on
the number of shares is still required, the number of securities that may be
included shall be allocated, first, among the holders of registration rights, if
any, ranking PARI PASSU in priority with those set forth in this Section 5.2 in
proportion, as nearly as practicable, to the respective amounts of such
securities held by such holders and otherwise entitled to be included in such
registration, second, among holders of securities in accordance with the terms
of their respective registration rights, if any, in each case in proportion, as
nearly as possible, to the respective amounts of such securities held by each
such holder and otherwise entitled to be included in such registration and
third, any Common Stock proposed to be issued or sold for the account of the
Company. The Company agrees that it will not grant any future holders of the
Common Stock piggyback registration rights ranking senior or PARI PASSU in
underwriter cutback priority to the rights of the Holders of Registrable
Securities with respect to a demand registration initiated by the Holders of
such Registrable Securities as provided for in this Section 5.2. If any Holder
disapproves of the terms of the underwriting, it may elect to withdraw therefrom
by written notice to the Company and the underwriter. The Registrable
Securities so withdrawn shall also be withdrawn from registration.
5.3 PIGGY-BACK REGISTRATIONS
(a) If at any time the Company shall determine to register for
its own account or the account of others under the Securities Act any shares of
Common Stock (other than (i) pursuant to the Initial Public Offering, (ii) on
Form S-4 or Form S-8 or their then equivalents relating to shares of Common
Stock to be issued in connection with any acquisition of any entity or business
or shares of Common Stock issuable in connection with stock option or other
employee benefit plans, or (iii) a registration in which the only Common Stock
being registered is Common Stock issuable upon conversion of debt securities),
it shall send to the Holders written notice of such determination and, if within
ten (10) days after receipt of such notice, any Holder shall so request in
writing, the Company shall use its best efforts to include in such registration
statement all or any part of the Registrable Shares such Holder requests to be
registered. Any Registrable Securities shall be included subject to the same
terms and conditions as the other Common Stock proposed to be registered.
(b) The Company's obligation to use its reasonable efforts to
include Registrable Securities in a registration pursuant to this Section 5.3 is
subject to the following limitations, conditions and qualifications:
(i) If, at any time after giving such written notice of its
intention to effect a registration, and prior to the effective date of any
registration statement filed in connection with such notice, the Company shall
determine for any reason in its sole discretion not to register such
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securities, the Company may, at its election and in its sole discretion, delay
such registration or cease any further pursuit thereof, in which case the
Company shall provide notice of its decision to any Holders that elected to
participate in such registration.
(ii) Notwithstanding any other provision of this Section 5.3, if
the underwriters determine, in good faith, that marketing factors require a
limitation of the number of shares to be underwritten, the underwriters may
limit in their sole discretion the number of Registrable Securities and other
shares of Common Stock to be included in the registration and underwriting, or
may exclude Registrable Securities or other securities entirely from such
registration and underwriting subject to the terms of this subsection 5.3(b).
The Company shall so advise all holders of the Company's securities that would
otherwise be registered and underwritten pursuant to such registration, and the
number of shares of such securities, including Registrable Securities, that may
be included shall be allocated in accordance with the following priorities: (i)
first, in the event of a Company initiated registration, among the shares of
Common Stock, proposed to be included therein for the account of the Company;
(ii) second, pro rata among holders of Common Stock, if any, requesting
inclusion in such registration statement pursuant to registration rights
existing on the date of this Agreement and ranking senior to the registration
rights of the Holders of Registrable Securities, and (iii) third, pro rata with
respect to all Holders of Registrable Securities or holders of other Common
Stock of the Company who have requested to be included in the registration
pursuant to this Section 5.3 or pursuant to piggy-back registration provisions
of other agreements that rank PARI PASSU with the piggyback rights provided
hereunder, in proportion to the number of shares owned by each such holder. The
respective ownership percentages of any Person for purposes of prorating any
underwriting cutback or participation under this Section 5.3 shall be measured
as of the date of the effectiveness of the registration statement for which such
ownership percentages are being calculated. The Company agrees that it will not
grant any future holders of the Common Stock piggyback registration rights
ranking senior in underwriter cutback priority to the rights of the Holders of
the Registrable Securities with respect to a registration for which the Holders
would be entitled to exercise piggyback registration rights as provided in this
Section 5.3.
(iii) In connection with any offering involving an underwriting
under this Section 5.3, the Company shall not be required to include any
Holder's securities in such underwriting unless such Holder accepts the pricing
and other terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (or by other Persons entitled to select the
underwriters).
(c) Subject to the terms and conditions of this Agreement,
Holders of Registrable Securities may exercise piggy-back registration rights
under this Section 5.3 at any time or from time to time, so long as such Holders
continue to hold Registrable Securities.
5.4 OBLIGATIONS OF THE COMPANY
Whenever required under this Section 5 to effect the registration
of any Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
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(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use reasonable efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for a period of up to seventy-five (75) days
or, if earlier, until the distribution contemplated in the registration
statement has been completed; provided, that the Company shall have no
obligation to pursue a registration statement pursuant to Section 5.3 if it
elects in its sole discretion to delay or abandon pursuit of such registration
statement; provided further that such seventy-five (75) day period shall be
extended one day for each day that Holders are unable to sell Common Stock due
to the operation of Section 5.5(c).
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Before filing a registration statement or prospectus or any
amendments or supplements thereto, (i) furnish to the counsel for Holders of the
Registrable Securities covered by such registration statement and the
underwriters, if any, copies of such registration statement, prospectus,
amendment or supplement thereto proposed to be filed; and (ii) furnish to the
Holders and the underwriters, if any, such number of copies of the prospectus
(including each preliminary prospectus), and such other documents as the Holders
may reasonably request in order to facilitate the disposition of the Registrable
Securities.
(d) Use its reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as shall be reasonably requested by the
Holders or the underwriters, if any; provided that the Company shall not be
required in connection therewith or as a condition thereto (i) to qualify to do
business, (ii) to file a general consent to service of process, or (iii) subject
itself to taxation in any such states or jurisdictions for which it is not
already qualified to do business, subject to taxation and subject to a
previously filed consent to service of process.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(g) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange (or listed for quotation on
the Nasdaq National Market or the
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Nasdaq Stock Market) on which similar securities issued by the Company are then
listed or to be listed in connection with such registration statement.
(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(i) Upon receipt of such confidentiality agreements as the
Company may request, make available for inspection by representatives of the
Holders of a majority of the Registrable Securities being sold, any underwriter
participating in any disposition pursuant to such registration statement, and
any attorney or accountant retained by the Holders or any such underwriter, all
financial and other records and pertinent corporate documents and properties of
the Company, and cause the Company's officers, directors and employees to supply
all information reasonably requested by any such representative, underwriter,
attorney or accountant in connection with the registration statement.
5.5 CERTAIN HOLDER OBLIGATIONS
(a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Section 5 with respect to the
Registrable Securities of any selling Holder that such Holder, upon a reasonable
request in writing by the Company, shall promptly furnish to the Company in
writing (and signed by the Holder and stated to be specifically for use in the
related registration statement, preliminary prospectus, prospectus or other
document incident thereto), such requisite information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities and to permit the Company to comply with all applicable
requirements of the SEC, any blue sky laws or other legal requirements including
as may be necessary to accelerate the effectiveness of the registration
statement.
(b) The Company shall have no obligation with respect to any
Demand Registration requested pursuant to Section 5.2 if, due to the operation
of subsection 5.5(a), the number of shares or the anticipated aggregate offering
price of the Registrable Securities to be included in the registration does not
equal or exceed the number of shares or the anticipated aggregate offering price
required to originally trigger the Company's obligation to initiate such
registration as specified in subsection 5.2(a).
(c) Upon receipt of any notice from the Company that the Company
has become aware that the prospectus (or any preliminary prospectus) included in
any registration statement filed pursuant to Section 5.2 or 5.3 hereto, as then
in effect, contains any untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, each Holder shall forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering the same until receipt of a supplemental or amended prospectus from the
Company, and, if so directed by the Company, deliver to the Company at the
Company's expense all copies in such Holder's possession of the prospectus
covering the Registrable Securities that was in effect prior to such amendment
or supplement.
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5.6 EXPENSES OF REGISTRATION
All registration expenses incident to the Company's performance of
its obligations in connection with any registration of a Holder's Registrable
Securities under this Section 5 including, without limitation, (i) printing
expenses, fees and disbursements of counsel for the Company, (ii) amounts
payable to the National Association of Securities Dealers, Inc. in connection
with its review of any offering contemplated in any registration statement,
(iii) all registration and filing fees under federal and state securities laws,
(iv) expenses of complying with the securities or blue sky laws of any
jurisdiction pursuant to Section 5.4(d), (v) reasonable fees and disbursements
of no more than one counsel for the Holders, and (vi) reasonable fees and
disbursements of all independent certified accountants of the Company including
expenses of any special audits or "cold comfort" letters in connection with any
such registration; provided, however, that the Company shall not pay any
underwriting discounts and commissions or stock transfer taxes relating to the
Registrable Securities. The Company shall not be required to pay for any
expenses of any registration proceeding begun pursuant to Section 5.2 if the
registration request is subsequently withdrawn at the request of the Holders of
a majority of the Registrable Securities to be registered and such withdrawal is
not the result of the Company's exercise of a Delay Right pursuant to the terms
of Section 5.2(b) (in which case all participating Holders shall bear such
expenses), unless the Holders of a majority of the Registrable Securities agree
to forfeit their right to one demand registration pursuant to Section 5.2 (in
which event such right shall be forfeited by all Holders); provided further,
however, that if at the time of such withdrawal, the Holders have learned of a
material adverse change in the condition, business, or prospects of the Company
from that known to the Holders at the time of their request and have withdrawn
the request with reasonable promptness following disclosure by the Company of
such material adverse change, then the Holders shall not be required to pay any
of such expenses and shall retain their rights pursuant to Section 5.2.
5.7 ADJUSTMENTS FOR STOCK SPLITS
All share numbers included in this Section 5, as well as in
Section 2 and Section 11, are presented as of the date of this Agreement. The
Company has approved a Restated Certificate of Incorporation that it may file
immediately prior to the Company's Initial Public Offering, that will, among
other things, effect a one-for-two reverse split of the Common Stock. To the
extent that such reverse stock split is effected at any relevant time for
purposes of this Agreement, or in the event that such reverse split is effected
on different terms, or any other stock split, reverse stock split, stock
dividend, recapitalization or reclassification with respect to the Company's
Common Stock is made, then the share numbers set forth in Section 5 and
Section 11 shall be appropriately adjusted upward or downward, as the case may
be.
5.8 DELAY OF REGISTRATION
No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any registration under this Section 5 as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Section 5.
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5.9 CERTAIN REPORTS
(a) Prior to the Initial Public Offering, the Company will
deliver to the Investor and each other Holder of Registrable Securities that so
requests, as soon as practicable after the end of each fiscal year and each
quarter, audited annual and unaudited quarterly consolidated financial
statements of the Company, including a balance sheet of the Company, a statement
of operations and a statement of sources and application of funds of the Company
for such year or quarter, all prepared in accordance with generally accepted
accounting principles.
(b) With a view to making available to the Holders after the
Initial Public Offering the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration, the Company covenants that it will after the Initial Public
Offering:
(i) make and keep public information available, as those terms
are understood and defined in Rule 144 at all times from and after ninety (90)
days after the Initial Public Offering;
(ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(iii) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (A) a written statement by the
Company that it has complied with the reporting requirements of Rule 144 (at any
time after ninety (90) days after the Initial Public Offering), the Securities
Act and the Exchange Act (at any time after it has become subject to such
reporting requirements), (B) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (C) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration.
5.10. INDEMNIFICATION
In the event any Registrable Securities are included in a
registration statement under this Section 5:
(a) The Company will, and does hereby undertake to, indemnify
and hold harmless each Holder of Registrable Securities, each of such Holder's
officers, directors, employees and each Person controlling such Holder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, with respect to any registration, qualification, compliance or
other matters effected pursuant to this Section 5, against all claims, losses,
damages, and liabilities (or actions in respect thereto) to which they may
become subject under the Securities Act, the Exchange Act, or other federal or
state law based upon any of the following statements, omissions, allegations or
violations (collectively, a "Violation"): (i) any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus (whether
preliminary or final, if any), registration statement or based on any omission
(or alleged
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omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) any violation
or alleged violation by the Company of any federal, state or common law rule or
regulation applicable to the Company in connection with any such registration,
qualification or compliance. The Company will reimburse, as incurred, each such
Holder, and each such director, officer, employee, and controlling Person, for
any legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action;
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense, arises out of or is based on
any untrue statement or omission based upon written information furnished to the
Company by an instrument duly executed by such Holder or underwriter and stated
to be specifically for use therein. This indemnity will be in addition to any
liability which the Company may otherwise have. The Company shall also
indemnify underwriters participating in a distribution covered by a registration
statement, their officers and directors and each Person who controls such
Persons to the same extent as provided above with respect to the indemnification
of the Holders of Registrable Securities.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, officers and
employees, each Person, if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, any
underwriter, any other Holder selling securities in such registration statement
and any controlling person of any such underwriter or other Holder, against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Securities Act, the Exchange Act
or other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with such registration;
and each such Holder will pay, as incurred, any legal or other expenses
reasonably incurred by any Person intended to be indemnified pursuant to this
subsection 5.10(b), in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this subsection 5.10(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 the Holder, which consent shall
not be unreasonably withheld; provided, further, that in no event shall any
indemnity under this subsection 5.10(b) exceed the gross proceeds from the
offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 5.10 of notice of the commencement of any action, claim or proceeding
(including any governmental investigation or inquiry), such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying party
under this Section 5.10, deliver to the indemnifying party a written notice of
the commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires (whether
alone or jointly with any other indemnifying party similarly noticed), to assume
the defense thereof with counsel selected by the indemnifying party (but subject
to the reasonable approval of the indemnified party); provided, however, that
the indemnified party may participate in the defense with separate
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counsel at its own expense, and provided further that if representation of an
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to an actual conflict of interest between such indemnified
party and the indemnifying party in such proceeding, then such indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the reasonable fees and expenses thereof to be paid by the indemnifying
party. The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action, if prejudicial to its
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 5.10, but the omission so
to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise thereunder this
Section 5.10. The indemnified party shall not be liable for any settlement of
any such action or proceeding effected without its written consent, which
consent shall not be unreasonably withheld.
(d) If the indemnification provided for in this Section 5.10 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission. The Company and the Investor agree that it would not be
just and equitable if contribution pursuant to this Section 5.10 were determined
solely by pro rata allocation or by any other method of allocation which does
not take account of the equitable considerations referred to in this paragraph.
Notwithstanding the provisions of this subsection 5.10(d), an indemnified party
shall not be required to contribute any amount in excess of the amount by which
the total price at which the securities sold by such indemnified party or its
affiliated indemnified party and distributed to the public were offered to the
public exceeds the amount of any damages which such indemnified party, or its
affiliated indemnified party, has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
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(f) The obligations of the Company and Holders under this
Section 5.10 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 5.
5.11 ASSIGNMENT OF REGISTRATION RIGHTS
The rights to cause the Company to register Registrable Securities
pursuant to this Section 5 may be assigned (but only with all related
obligations) by a Holder to a transferee or assignee of such securities who
(a) receives such Registrable Securities pursuant to a transfer made in
compliance with the right of first purchase contained in Section 4 of this
Agreement and any other restrictions on transfer contained herein or imposed by
law and (b)(i) after such assignment or transfer, holds at least 100,000 shares
of Registrable Securities (subject to adjustment in accordance with
Section 5.7), (ii) is a subsidiary, parent, general partner, limited partner or
retired partner of a Holder or (iii) is a Holder's family member or trust for
the benefit of an individual Holder; provided that in each case: (x) the
Company is, within a reasonable time after such transfer, furnished with written
notice of the name and address of such transferee or assignee and the securities
with respect to which such registration rights are being assigned; (y) such
transferee or assignee agrees in writing to be bound by and subject to the terms
and conditions of this Agreement, including without limitation the provisions of
Section 5.12 below; and (z) such assignment of registration rights shall be
effective only if immediately following such transfer the further disposition of
such securities by the transferee or assignee is restricted under the Securities
Act. For the purposes of determining the number of shares of Registrable
Securities held by a transferee or assignee, the holdings of transferees and
assignees of a partnership who are partners or retired partners of such
partnership (including spouses and ancestors, lineal descendants and siblings of
such partners or spouses who acquire Registrable Securities by gift, will or
intestate succession) shall be aggregated together and with the partnership;
provided that all assignees and transferees who would not qualify individually
for assignment of registration rights shall have a single attorney-in-fact for
the purpose of exercising any rights, receiving notices or taking any action
under this Section 5.
5.12 "MARKET STAND-OFF" AGREEMENT
Except as set forth in Section 4.1 in connection with the Company's
Initial Public Offering, the Investor hereby agrees that, and each assignee of
registration rights hereunder shall agree that, during the period of duration
specified by the Company and an underwriter of Common Stock or other securities
of the Company following the effective date of a registration statement of the
Company filed under the Securities Act, it shall not, to the extent requested by
the Company and such underwriter, directly or indirectly sell, offer, contract
to sell, grant any option to sell, transfer the economic risk of ownership in,
make any short sale, pledge or otherwise dispose of, any shares of Common Stock
(except any Registrable Securities included in such registration), or any
securities convertible into or exchangeable or exercisable for or any other
rights to purchase or acquire Common Stock, without the prior written consent of
the Company (other than to donees who agree to be similarly bound); provided,
however, that:
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(a) such market stand-off agreement shall be applicable only to
registration statements of the Company that cover Common Stock to be sold in an
underwritten offering;
(b) such market stand-off time period shall not exceed one
hundred eighty (180) days or such shorter period of time as may be applicable to
similar lock-up agreements signed by the executive officers of the Company
and/or all holders of greater than three percent (3%) of the then issued and
outstanding shares of the Common Stock with respect to the offering in question;
and
(c) such market stand-off agreement shall be applicable only to
those Holders (and their respective affiliates) whose aggregate beneficial
ownership interest in the shares of the Common stock exceeds three percent (3%)
of the then issued and outstanding shares of the Common Stock.
5.13. RESTRICTIONS ON CERTAIN SALES BY THE COMPANY
If requested to by the underwriters in connection with a
registration statement filed pursuant to Section 5.2 of this Agreement, the
Company will not file a registration statement under the Securities Act with
respect to any offering of additional shares of Common Stock (other than on
Form S-8 or Form S-4) for a period of up to ninety (90) days from the
effectiveness of the registration statement filed under such Section 5.2 unless
the Company is required to file a registration statement during the time
pursuant to registration rights of a third party outstanding as of the date of
this Agreement, but in no event will the Company cause such registration
statement to be declared effective by the SEC prior to the end of such ninety
(90) day period.
6. CONDITIONS OF THE INVESTOR'S OBLIGATIONS AT CLOSING
The obligations of the Investor under this Agreement are subject to the
fulfillment on or before the Closing Date (except as otherwise noted below) of
each of the following conditions, the waiver of which shall not be effective
unless the Investor consents in writing thereto:
6.1 REPRESENTATIONS AND WARRANTIES
The representations and warranties of the Company contained in
Section 2 shall remain true in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties had been
made on and as of the Closing Date.
6.2 PERFORMANCE
The Company shall have performed and complied in all material
respects with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing Date.
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6.3. COMPLIANCE CERTIFICATE
The President of the Company shall deliver to the Investor on the
Closing Date a certificate stating that the conditions specified in Section 6.1
and 6.2 have been fulfilled.
6.4. LICENSE AGREEMENT
The Investor and the Company shall have executed and delivered
the License Agreement.
6.5. OPINION OF COMPANY COUNSEL
The Investor shall have received from Morrison & Foerster LLP,
counsel for the Company, an opinion, dated as of the Closing Date, in the form
attached hereto as EXHIBIT B.
6.6. UNITS OFFERING
In the event of an Initial Public Offering involving the sale of
units, the applicable condition specified in the last sentence of the definition
of "Initial Public Offering" shall have been satisfied.
7. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING
The obligations of the Company to the Investor under this Agreement are
subject to the fulfillment on or before the Closing Date of each of the
following conditions by the Investor:
7.1. REPRESENTATIONS AND WARRANTIES
The representations and warranties of the Investor contained in
Section 3 shall remain true in all material respects on and as of the Closing
Date with the same effect as though such representations and warranties had been
made on and as of the Closing Date.
7.2. PERFORMANCE OF OBLIGATIONS
The Investor shall have performed and complied with all
agreements and conditions herein required to be performed or complied with by
the Investor on or before the Closing Date.
7.3. PAYMENT OF PURCHASE PRICE
Pursuant to the Closing Date in connection with the Company's
Initial Public Offering, the Investor shall have delivered the cash portion of
the purchase price specified in Section 1.1 and the Promissory Note.
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7.4. LICENSE AGREEMENT
The Investor and the Company shall have executed and delivered
the License Agreement.
7.5. UNITS OFFERING
In the event of an Initial Public Offering involving the sale of
units, the applicable condition specified in the last sentence of the definition
of "Initial Public Offering" shall have been satisfied.
8. STANDSTILL COVENANT
8.1. STANDSTILL AGREEMENT
The Investor agrees that, except as specifically permitted by
this Agreement (including the purchase of the Common Stock contemplated to be
issued to the Investor under this Agreement) or unless specifically requested in
writing in advance by the Company (without any prior solicitation or request (or
other act encouraging the delivery of such a writing) having been made to the
Company's Board of Directors), upon the approval of the Company's Board of
Directors, the Investor and each of its Affiliates ("Affiliates" shall mean any
Person that controls, is controlled by, or is under common control of the
Investor) will not in any manner, directly or indirectly:
(a) in any manner acquire, or offer or agree to acquire,
directly or indirectly, any securities or property of the Company or any of its
successors or subsidiaries (or any direct or indirect rights, options or
interests therein), provided that the Investor may acquire securities if after
the acquisition thereof the Investor and its affiliates would hold in the
aggregate less than ten percent (10%) of the then total voting power of the
Company (calculated in accordance with Rule 13d-3 under the Exchange Act) (such
percentage limitation being the "Percentage Limitation"); provided, however,
that the Investor shall not be required to dispose of those shares of capital
stock held in excess of the Percentage Limitation solely because the Company has
purchased and retired shares of its outstanding capital stock;
(b) solicit proxies or consents or become a "participant" in a
"solicitation" (as such terms are defined or used in Regulation 14A under the
Exchange Act) of proxies or consents with respect to securities of the Company
or any of its successors or subsidiaries in opposition to the recommendation of
the majority of the Board of Directors of the Company or initiate any
stockholder proposal or "election contest" (as such term is defined or used in
Rule 14a-11 of the Exchange Act) with respect to the Company or any of its
successors or subsidiaries or induce others to initiate the same;
(c) take any action for the purpose of convening a stockholders'
meeting of the Company or any of its successors or subsidiaries;
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(d) make any proposal or any public announcement relating to, or
submit to the Company or any of its directors, officers, representatives,
trustees, employees, attorneys, advisors, agents or affiliates any proposal for,
a tender or exchange offer for securities of the Company or any of its
successors or subsidiaries, the acquisition of securities that would result in
the Investor exceeding the Percentage Limitation or a merger, business
combination, sale of assets, liquidation, restructuring, recapitalization or
other extraordinary corporate transaction relating to the Company or any of its
successors of subsidiaries (other than the establishment of joint ventures,
licenses or other transactions in the ordinary course of business) or take any
action that might require the Company or any of its successors or subsidiaries
to make any public announcement regarding any of the foregoing;
(e) deposit securities held by it into a voting trust or subject
the securities to voting agreements, or grant any proxy with respect to any
securities to any person not designated by the Company;
(f) form, join or in any way participate in a "group" (within
the meaning of Section 13(d)(3) of the Exchange Act) for the purpose of
acquiring, holding, voting or disposing of securities of the Company or any of
its successors or subsidiaries or taking any other actions restricted or
prohibited under clauses (a) through (e) above;
(g) disclose any intention, plan or arrangement inconsistent
with the foregoing;
(h) advise, assist or encourage any other person in connection
with any of the foregoing;
(i) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to, or aid, abet or encourage
any action prohibited by, any of the foregoing; or
(j) make (publicly or to the Company or any of its directors,
officers, representatives, trustees, employees, attorneys, advisors, agents,
affiliates or security holders, directly or indirectly) any request or proposal
to amend, waive or terminate any provision of this Section 8.1 or any inquiry or
statement relating thereto.
8.2. EXCEPTIONS
Notwithstanding any provision of this Section to the contrary,
the preceding provisions shall terminate on the following events:
(a) the expiration of the three year period commencing on the
date of this Agreement;
(b) any person or 13D Group (other than an Affiliate of the
Investor) shall have announced or commenced a tender offer or exchange offer for
more than 51% of the then
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outstanding shares of Common Stock (including any other outstanding voting
securities) of the Company;
(c) the date upon which a person acquires more than 35% of the
voting power of the Company whether by way of tender or exchange offer or
otherwise;
(d) in the event the Company hereafter issues to a third party
(other than a public offering for the account of the Company in which other
third parties also purchase shares of capital stock pursuant to substantially
the same terms and conditions) more than 10% of its then outstanding capital
stock without requiring such third party to enter into a standstill agreement
with provisions substantially as restrictive as those set forth in this
Section 8;
(e) in the event that the Investor and its Affiliates cease to
own more than two and one-half percent (2.5%) of the then outstanding voting
securities of the Company; or
(f) in the event that the Company or any third party initiates
any transaction of the type described in Section 8.1(d) above.
Notwithstanding anything to the contrary contained herein, the
provisions of this Section 8 shall only be applicable at such time as
Interneuron Pharmaceuticals Inc. does not beneficially own more than 35% of the
voting power of the Company.
For purposes of this Section, a "13D Group" means any group of
persons formed for the purpose of acquiring, holding, voting or disposing of
securities of the Company that would be required under the Exchange Act, and the
rules and regulations promulgated thereunder, to file a statement on
Schedule 13D with the SEC as a person within the meaning of section 13(d)(3) of
the Exchange Act if such group beneficially owns sufficient securities to
require such a filing.
All of the provisions of Section 8.1 shall be reinstated and
shall apply in full force according to their terms in the event that: (x) if
the preceding provisions of Section 8.1 shall be terminated as a result of a
tender offer, such tender offer (as originally made or as extended or modified)
shall have terminated without closing prior to the commencement of a tender
offer by the Investor or any of its Affiliates that would have been permitted to
be made pursuant to the preceding provisions of this paragraph as a result of
such third party tender offer or (y) any tender offer by the Investor or any of
its Affiliates (as originally made or as extended or modified) that was
permitted to be made pursuant to the preceding provisions of this paragraph
shall have terminated without closing. Upon the closing of any tender offer for
or acquisition by the Investor or its affiliates of any securities of Company or
rights or options to acquire under such securities that would have been
prohibited by the preceding provisions but for the provisions of this section,
all provisions of this section shall terminate.
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9. CERTAIN INITIAL PUBLIC OFFERING MATTERS
9.1. REGISTRATION OF STOCK
The Investor shall review the terms and disclosure contained in any
registration statement applicable to the Company's Initial Public Offering and
the Company shall provide the Investor with copies of such registration
statement and give the Investor reasonable opportunity to review such
registration statement. The disclosure contained in any such registration
statement shall be deemed incorporated by reference in this Agreement and made a
part hereof. Company shall give the Investor reasonable notice of the
anticipated Closing Date in connection with the Initial Public Offering.
9.2. USE OF PROCEEDS
The Company shall use the proceeds of any sale of Common Stock to the
Investor pursuant to a registration statement in connection with an Initial
Public Offering for the purposes set forth in the "Use of Proceeds" section of
such registration statement.
9.3. COMMON STOCK PURCHASE
The Investor acknowledges that the Company's Initial Public
Offering may consist of an offering of Units consisting of Common Stock of the
Company and other securities of the Company or Interneuron Pharmaceuticals Inc.
In the event of such an Initial Public Offering, the Investor's participation
(upon the Company's election for the Investor to participate) in connection with
the Initial Public Offering shall apply solely to shares of the Company's Common
Stock and not to any other securities that constitute a portion of such Unit
offering.
10. MISCELLANEOUS
10.1. SURVIVAL OF WARRANTIES
All representations and warranties contained herein shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the party benefiting from any such representation or warranty,
and shall survive the Closing Date to the extent of applicable statutes of
limitations; PROVIDED, HOWEVER, that the representations and warranties of this
Agreement shall not be construed so as to constitute representations and
warranties concerning circumstances existing after any date specifically
referred to therein, or the Closing Date, as the case may be. All covenants and
agreements contained herein shall survive indefinitely until, by their
respective terms, they are no longer operative.
10.2. PUBLIC ANNOUNCEMENTS
Except as required by applicable law or regulations, the Company and
the Investor shall jointly approve any public announcements relating to the
transactions described herein or the relationship between the parties. Each
party agrees to cooperate with the other in
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the preparation of any governmental filing relating to the transactions
contemplated hereby and to use reasonable efforts to disclose to the other
information to be contained in any such governmental listing that relates to
this Agreement.
10.3. SUCCESSORS AND ASSIGNS
Except as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties (including transferees of any of the
Common Stock). Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
Neither the Company nor the Investor shall assign this Agreement or any rights
hereunder without the prior written consent of the other.
10.4. GOVERNING LAW
This Agreement shall be governed by and construed and enforced under
the laws of the State of California.
10.5. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
10.6. TITLES AND SUBTITLES
The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
10.7. NOTICES
All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (i) upon personal delivery to the party to
be notified; (ii) when sent by confirmed telex or confirmed facsimile if sent
during normal business hours of the recipient; if not sent during such normal
business hours, then on the next business day; (iii) five (5) days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid; or (iv) one (1) day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the Company and the Investor at
their addresses as set forth on and with copies as designated on the signature
page hereof or at such other addresses as the Company or the Investor may
designate by ten (10) days' advance written notice to the other parties hereto.
10.8. FINDER'S FEES
Each party represents and warrants that it neither is nor will be
obligated for any finders' fee or commission in connection with the transactions
contemplated by this Agreement.
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The Investor agrees to indemnify and to hold harmless the Company from any
liability for any commission or compensation in the nature of a finders' fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Investor or any of its officers, partners, employees,
or representatives is responsible.
The Company agrees to indemnify and hold harmless the Investor from
any liability for any commission or compensation in the nature of a finders' fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or
representatives is responsible.
10.9. EXPENSES
Each party hereto shall pay all of its own costs and expenses incurred
in connection with the negotiation, preparation, execution, delivery and
performance of this Agreement and the transactions contemplated herein, whether
or not such transactions are consummated.
10.10. AMENDMENTS AND WAIVERS
Any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and the Investor. Any amendment or waiver effected in
accordance with this Section 10.10 shall be binding upon each holder of any
securities purchased under this Agreement at the time outstanding, each future
holder of all such securities, and the Company. No delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement shall impair any
such right, power or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of or in
any similar breach, default or noncompliance thereafter occurring.
10.11. SEVERABILITY
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, then (i) such provision shall be excluded
from this Agreement, (ii) the parties shall make reasonable efforts to negotiate
such alternative provisions in lieu of the excluded term of this Agreement in
order to carry out the purpose and intentions of this Agreement, and (iii) the
balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
10.12. BREACH; STATUS OF LICENSE AGREEMENT
Any default by the Investor of its obligation to purchase any Common
Stock pursuant to this Agreement, shall constitute a material breach of the
License Agreement and shall be grounds for termination thereof. Notwithstanding
the foregoing, no termination of the License Agreement, except a termination by
the Investor as a result of a material breach thereof by the Company, will in
any way affect the Investor's obligations hereunder.
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10.13. SPECIFIC ENFORCEMENT
The Company and the Investor acknowledge and agree that if any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached, irreparable damage would occur and it
would be extremely impracticable and difficult to measure damages. Accordingly,
in addition to any other rights and remedies to which the parties may be
entitled by law or equity, the parties shall be entitled to an injunction or
injunctions to prevent or cure breached of the provisions of this Agreement and
to enforce specifically the terms and provisions hereof, and the parties
expressly waive (i) the defense that a remedy in damages will be adequate and
(ii) any requirement, in an action for specific performance, for the posting of
a bond.
10.14. ENTIRE AGREEMENT
This Agreement, the License Agreement and the documents referred to
herein and therein constitute the entire agreement among the parties and
supersede any prior term sheets, discussions, commitments or writings of any
kind with respect to the subject matter hereof. No party shall be liable or
bound to any other party in any manner by any warranties, representations, or
covenants except as specifically set forth herein or therein.
10.15. FURTHER ASSURANCES
Each party shall execute and deliver such additional instruments,
documents or other writings as may be reasonably requested by the other party in
order to confirm and carry out and to effectuate fully the intent and purposes
of this Agreement.
10.16. ATTORNEYS' FEES
If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
10.17. LEGENDS
It is understood that the certificates evidencing any Common Stock
that constitutes "restricted securities" may bear, if applicable, one or all of
the following legends:
(a) "These securities have not been registered under the Securities
Act of 1933, as amended. They may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement in effect with respect
to the securities under the Securities Act or an opinion of counsel satisfactory
to the Company that such registration is not required or unless sold pursuant to
Rule 144 of such Act."
(b) "The shares represented by this certificate may be transferred
only in accordance with the terms of a Stock Purchase Agreement, dated as of
December 31, 1996,
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between the Company and the stockholder, a copy of which is on file with the
Secretary of the Company."
(c) Any legend required by the laws of the State of California,
including any legend required by the California Department of Corporations.
11. CERTAIN DEFINITIONS
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" per share of the Common Stock, on any given date,
shall be calculated as follows:
(i) If the Common Stock is purchased other than in connection with
the Initial Public Offering, the Fair Market Value per share shall equal the
average of the daily market prices of the Common Stock for the twenty (20)
consecutive trading days immediately preceding the fifth day prior to such date.
The daily market price for each such trading day shall be: (x) if the Common
Stock is listed or admitted to trading on any securities exchange in the United
States, the closing price, regular way, on such day on the principal securities
exchange in the United States on which the Common Stock is traded, and (y) if
the Common Stock is not then listed or admitted to trading on any such
securities exchange, the last reported sale price on such day or, if no sale
takes place on such day, the average of the closing bid and asked prices in the
United States on such day, as reported by a reputable quotation source
designated by the Company. If the Common Stock is not registered under the
Exchange Act, the Company and the Investor shall attempt in good faith to reach
agreement regarding the fair market value thereof based upon, among other
factors, any recent prices for Common Stock sold by the Company to independent
third parties in arm's length transactions and there shall be no discount
applied by reason of the illiquidity of the Common Stock in question. If the
Investor and the Company are not able to reach an agreement, the Investor and
the Company shall either agree on a single independent investment bank of
recognized national standing to determine the Fair Market Value of the Common
Stock or, if the Investor and the Company cannot agree on a single investment
bank, each of the Investor and the Company shall appoint an independent
investment bank of recognized national standing with experience involving
development stage biotechnology companies and the Fair Market Value of the
Common Stock shall be mutually determined by the two investment banks. If the
two investment banks are not able to reach agreement on the Fair Market Value,
then they shall appoint a third independent investment bank of recognized
national standing with experience involving development stage biotechnology
companies and the Fair Market Value shall be determined as follows: The
investment banks appointed by the Investor and the Company shall each submit a
final proposed Fair Market Value for the Common Stock after consultation with
their respective clients and if the valuations differ by less than 10% (based
upon the higher valuation), then the Fair Market Value shall be the mid point of
the two proposals and if the valuations differ by more than 10%, then the
independent investment bank shall select whichever Fair Market Value better
approximates what such independent investment bank determines is the Fair Market
Value of the Common Stock. Each party shall pay the costs,
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fees, and expenses of its respective investment bankers and the parties shall
split the costs of the third investment banker.
(ii) If the Common Stock is purchased in connection with the Initial
Public Offering, the Fair Market Value per share shall equal the "Price to
Public" established for such Initial Public Offering in the case of an
underwritten Initial Public Offering of Common Stock, or that portion of the
Price to the Public attributable to the Common Stock as determined in good faith
by the Company's Board of Directors (after consultation with its financial
advisors) in the case of an underwritten Initial Public Offering of Units or
other combinations of securities that includes more than solely shares of the
Company's Common Stock. If the Initial Public Offering occurs other than by
means of an underwritten offering, the Fair Market Value of the Common Stock
shall be determined by agreement between the Company and the Investor based upon
the market price for such Common Stock (or anticipated market price in the event
of an agreement prior to trading of such Common Stock). If the parties fail to
reach agreement regarding such Fair Market Value they shall follow the
procedures outlined in clause (i) above of this definition of "Fair Market
Value" by selecting one or more investment banks to facilitate resolution of the
valuation dispute except that the valuation principles applicable to such
dispute resolution procedure shall be based upon, among other factors, the
market price of the Common Stock as well as any anticipated changes in market
prices based upon how securities of companies in similar circumstances have
traded and there shall be no discount applied by reason of the illiquidity of
the Common Stock in question.
"Holder" or "Holders" shall mean (i) the Investor, and (ii) a holder
of more than 100,000 Registrable Shares (subject to adjustment as provided in
Section 5.7) to whom registration rights have been assigned pursuant to
Section 5.11 hereof.
"Initial Public Offering" shall mean (i) an underwritten initial
public offering of the Common Stock by the Company registered under the
Securities Act of which the aggregate offering price attributable to the Common
Stock is greater than $15,000,000 (not including the Common Stock to be issued
to the Investor under this Agreement), (ii) a merger, spin-off or other
transaction (including a series of financings) as a result of which the Company
becomes subject to the reporting requirements of Section 12 or 15(d) of the
Exchange Act and after which the Company has a minimum public float in excess of
2,000,000 shares of the Common Stock (subject to adjustment as provided in
Section 5.7) having a value in excess of $15,000,000 (not including the Common
Stock to be issued to the Investor under this Agreement), or (iii) any other
series of transactions which meet the requirements of (i) or (ii) above. In the
event that an Initial Public Offering is structured as an offering of units that
include securities other than solely shares of Common Stock of the Company, the
terms of such offering must contemplate that the Common Stock will trade
separately in the public markets not later than the expiration of the six month
lock-up period referred to in the first sentence of Section 4.2 and one of the
following three conditions shall be satisfied prior to the Investor's purchase
of the Common Stock in connection with the Initial Public Offering (the Company
may elect which of such conditions it chooses to satisfy): (A) the Investor
shall make a good faith determination in its discretion prior to its purchase of
the Common Stock in connection with the Initial Public Offering that the Common
Stock sold to the public in the underwritten portion of such offering will trade
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separately in the public markets not later than the expiration of the lock-up
period referred to in the first sentence of Section 4.2 (the Investor and the
Company shall consult in good faith prior to the circulation of the Company's
preliminary prospectus to define what requirements will be necessary to satisfy
the Investor's determination as provided in this clause (A) but the good faith
determination regarding such requirements shall be made by the Investor in its
discretion); (B) the Company and the Investor shall prior to the purchase by the
Investor of the Common Stock in connection with the Initial Public Offering
enter into an agreement providing for the repurchase by the Company of the
Common Stock purchased by the Investor (at the purchase price paid by the
Investor thereof) in the event that the Common Stock does not trade separately
in the public markets not later than the expiration of the lock-up period
referred to in the first sentence of Section 4.2; or (C) the Company and the
Investor shall enter into an agreement providing for a delayed closing of the
purchase by the Investor of the Common Stock to be purchased in connection with
the Initial Public Offering such that (x) the purchase price for such Common
Stock shall be the same price as applicable to a direct purchase of Common Stock
by the Investor in the Initial Public Offering (i.e. the portion thereof
attributable to the Common Stock), and (y) all conditions to the closing of the
purchase of the Common Stock by the Investor will be satisfied (or waived if
applicable) at a preliminary closing at the time of the Initial Public Offering
and the sole condition to the final closing will be that the Common Stock sold
to the public in the underwritten portion of such offering trades separately in
the public markets (and the delivery of the certificate for the Common Stock
against payment of the purchase price therefor including the Promissory Note if
applicable).
"Person" shall mean any individual, corporation, firm or other
enterprise, association, organization, or other legal entity.
"prospectus" shall mean the prospectus included in any registration
statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
registration statement and all other amendments and supplements to the
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.
"register," registered" and "registration" refer to a registration
effected by filing with the SEC a registration statement in compliance with the
Act and the declaration or ordering by the SEC of the effectiveness of such
registration statement.
"Registrable Securities" shall mean any shares of the Common Stock
originally sold to the Investor under this Agreement that constitute "restricted
securities" under the Securities Act upon completion of such sale and any Common
Stock issued or issuable in respect of such shares of Common Stock pursuant to
any split, reverse stock split, stock dividend, recapitalization or
reclassification or similar transaction.
"Securities Act" shall mean the Securities Act of 1933, as amended.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
THE COMPANY: PROGENITOR, INC.,
a Delaware corporation
By: /s/ Douglass B. Given
-----------------------------------
Name: Douglass B. Given
-----------------------------------
Title: President & CEO
-----------------------------------
ADDRESS: 1507 Chambers Road
Columbus, OH 43212-1566
Attention: Chief Executive Officer
Fax: (614) 488-0404
WITH A COPY TO: Morrison & Foerster LLP
425 Market Street
San Francisco, CA 94105-2482
Attention: Gavin B. Grover, Esq.
Fax: (415) 268-7522
THE INVESTOR: AMGEN INC.,
a Delaware corporation
By: /s/ George A. Vandeman
-----------------------------------
Name: George A. Vandeman
-----------------------------------
Title: Sr. V.P., General Counsel and Secretary
----------------------------------------
ADDRESS: 1840 DeHavilland Drive
Thousand Oaks, CA 91320
Attention: Corporate Secretary
Fax: (805) 499-6058
WITH A COPY TO: Latham & Watkins
633 W. Fifth Street, Suite 4000
Los Angeles, CA 90071
Attention: Gary Olson, Esq.
Fax: (213) 891-8763
34
