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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Regeneron Pharmaceuticals, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
75886F 10 7
(CUSIP Number)
Terry L. Overbey
The Procter & Gamble Company
One Procter & Gamble Plaza
Cincinnati, OH 45202-3315
(513) 983-4463
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
June 16, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box { }.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP No. 75886F 10 7
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1) Names of Reporting Persons S. S. or I.R.S. Identification Nos. of Above
Persons
The Procter & Gamble Company
Identification Number 31-0411980
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) Not applicable
(b) Not applicable
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3) SEC Use Only
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4) Source of Funds (See Instructions): WC
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d):
Not applicable
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6) Citizenship or Place of Organization
Number of (7) Sole Voting Power 6,600,000
Shares Bene- -------------------------------------------------------
ficially (8) Shared Voting Power 0
Owned by -------------------------------------------------------
Each Report- (9) Sole Dispositive Power 6,600,000
ing Person -------------------------------------------------------
With (10) Shared Dispositive Power 0
- -------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,600,000
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
Not applicable
- -------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11) 23.6%
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14) Type of Reporting Person (See Instructions) CO
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Item 1. Security and Issuer:
Security: Common Stock
Issuer: Regeneron Pharmaceuticals, Inc.
777 Old Saw Mill Road
Tarrytown, NY 10591
Item 2. Identity and Background:
Name: The Procter & Gamble Company
State of Incorporation: Ohio
Principal Business: Manufacture and Marketing of
consumer products
Address of Principal Business: One Procter & Gamble Plaza
Cincinnati, Ohio 45202
(a) Not applicable
(b) Not applicable
(c) Not applicable
(d) No
(e) No
Item 3. Source and Amount of Funds or other consideration.
Working Capital.
Item 4. Purpose of Transaction - General Investment
(a) Reporting Person has five year warrants to purchase
up to 1,450,000 additional shares of common stock.
These 1,450,000 shares are included in the number of
shares beneficially owned (6,600,000). Under the
terms of the Securities Purchase Agreement, dated as
of May 13, 1997 (included as part of Item 7), Issuer
can require Reporting Person to purchase additional
securities from Issuer. Otherwise, Reporting Person
has no plans to acquire additional securities from
Issuer.
(b) None
(c) None
(d) None
(e) None
(f) None
(g) None
Item 5. Interest in Securities of the Issuer
(a) 6,600,000 shares (23.6%) of common stock
(b) Sole Voting Power: 6,600,000 shares
Shared Voting Power: 0 shares
Sole Dispositive Power: 6,600,000 shares
Shared Dispositive Power: 0 shares
(c) None
(d) Not applicable
(e) Not applicable
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
See item 4(a) above.
Item 7. Material to be Filed as Exhibits
The following documents are between Issuer and Reporting Person.
1. Securities Purchase Agreement, dated as of May 13, 1997
2. Warrant Agreement, dated as of May 13, 1997
3. Registration Rights Agreement, dated as of May 13, 1997
The following documents are between Issuer and Procter & Gamble
Pharmaceuticals, Inc., a wholly-owned subsidiary of Reporting Person.
1. Stock Purchase Agreement, dated as of December 11, 1996
2. Registration Rights Agreement, dated as of December 11, 1996
SIGNATURE
After reasonable inquiry and
to the best of my knowledge
and belief, I certify that
the information set forth in
this statement is true,
complete and correct.
June 27, 1997
------------------------------------
(Date)
/s/LINDA D. ROHRER
------------------------------------
(Signature)
Linda D. Rohrer, Assistant Secretary
------------------------------------
(Name/Title)
EXHIBIT INDEX
Sequential
Exhibit No. Description of Document Page Number
- ----------- ----------------------- -----------
99.1 Securities Purchase Agreement
between Issuer and Reporting Person,
dated as of May 13, 1997
99.2 Warrant Agreement
between Issuer and Reporting Person,
dated as of May 13, 1997
99.3 Registration Rights Agreement 1997
between Issuer and Reporting Person,
dated as of May 13, 1997
99.4 Stock Purchase Agreement
between Issuer and Procter & Gamble
Pharmaceuticals, Inc., a wholly-owned
subsidiary of Reporting Person,
dated as of December 11, 1996
99.5 Registration Rights Agreement 1996
between Issuer and Procter & Gamble
Pharmaceuticals, Inc., a wholly-owned
subsidiary of Reporting Person,
dated as of December 11, 1996
EXHIBIT (99.1)
REGENERON PHARMACEUTICALS, INC.
SECURITIES PURCHASE AGREEMENT
This Agreement is made as of May 13, 1997, by and between Regeneron
Pharmaceuticals, Inc., a corporation organized under the laws of New York (the
"Company"), with its principal office at 777 Old Saw Mill River Road, Tarrytown,
New York 10591, and The Procter & Gamble Company, a corporation organized under
the laws of Ohio (the "Buyer"), with its principal office at One Procter &
Gamble Plaza, Cincinnati, Ohio 45202.
ARTICLE 1
DEFINITIONS
1.1 CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective meanings:
"Additional Securities" means equity securities that the Company sells
to Buyer pursuant to Section 3.2(iii).
"Affiliate" means any corporation, company, partnership, joint
venture, or other entity which controls, is controlled by, or is under common
control with Buyer. For purposes of this definition control shall mean the
direct or indirect ownership of at least fifty (50%) percent or, if less than
fifty (50%) percent, the maximum percentage as allowed by applicable law of (a)
the shares of capital stock entitled to vote for the election of directors, or
(b) ownership interest.
"Buyer's Equity Limitations" means the limitations that in no event
(a) may Buyer purchase or own more than 20% of the Outstanding Securities or
possess more than 20% of the voting rights of the shares of the Company and, in
addition, (b) during the Optional Period may the Buyer be required to purchase
Securities or Additional Securities under this Agreement having a Value in the
aggregate that exceeds 20% of the Company's cumulative research funding
obligations during Fiscal Years 6 through 10 pursuant to the Collaboration
Agreement.
"Closing" means the closings of the sale and purchase of Securities
and Additional Securities issued and sold to Buyer in accordance with the terms
of this Agreement. The first such Closing to be held on the Effective Date shall
be called "Closing I." Closings other than Closing I conducted during the
Initial Period shall be called "Future Closings." Closings conducted during the
Optional Period shall be called "Optional Closings." All Closings, including
Closing I, Future Closings, and any Optional Closings, may be generally referred
to herein as Closings.
"Collaboration Agreement" means that certain Collaboration Agreement,
dated May 13, 1997 between Regeneron Pharmaceuticals, Inc. and The Procter &
Gamble Company. The Effective Date of the Collaboration Agreement will be
referred to herein as the "Effective Date" and references to "Fiscal Year" shall
have the same meaning herein as in the Collaboration Agreement.
"Collateral Agreements" means the Collaboration Agreement, together
with the Warrant Agreement between the parties dated as of May 13, 1997 (the
"Warrant Agreement") and the Registration Rights Agreement between the parties
dated as of May 13, 1997 (the "Registration Rights Agreement").
"Commission" means the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act.
"Common Stock" means the Common Stock, par value $.001 per share, of
the Company.
"Current Market Price" means the average (rounded to the nearest cent)
of the Quoted Price of the Common Stock for the 30 consecutive trading days
commencing 45 trading days before (and not including) the date in question.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor Federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"Exercise Price" means the price for which one share of Common Stock
may be purchased by the exercise of one Warrant. The Exercise Price in respect
of Warrants issued as part of a sale of Securities sold in Future Closings shall
equal the Purchase Price of the Common Stock sold to the Buyer together with the
Warrants in such sale of Securities in accordance with Section 3.2(ii). The
Exercise Price in respect of Securities sold in Optional Closings shall be
determined in accordance with Appendix A.
"Initial Period" means the period beginning on the Effective Date and
ending on the fifth anniversary of the Effective Date.
"Initial Securities" means Securities and Additional Securities
purchased by Buyer pursuant to this Agreement at Closing I or any Future Closing
during the Initial Period having a Value in the aggregate of $60 million.
"Optional Period" means the period beginning on the fifth anniversary
of the Effective Date and ending on the tenth anniversary of the Effective Date.
"Optional Securities" means Securities or Additional Securities
purchased by Buyer pursuant to this Agreement at an Optional Closing during the
Optional Period.
"Outstanding Securities" means the total number of shares of the
Company's issued and outstanding Common Stock and all shares of Common Stock (a)
into which any issued and outstanding shares of preferred stock and any other
securities exchangeable or convertible into Common Stock are exchangeable or
convertible and (b) for which any issued, outstanding, and exercisable options
or warrants to acquire Common Stock are then exercisable (all such calculations
to include such Securities or Additional Securities to be issued at any Closing
with respect to which Outstanding Securities is being calculated).
"Purchase Price" means the price per share of Common Stock sold to
Buyer as part of a sale of Securities under this Agreement and as set forth in
Section 3.2(iv).
"Quoted Price" means the last reported sales price (rounded to the
nearest cent) of the Common Stock as reported by the Nasdaq Stock Market, or if
the Common Stock is listed on a national securities exchange, the last reported
sales price of the Common Stock on such exchange (which shall be for
consolidated trading if applicable to such exchange), or if neither so reported
or listed, the last reported bid price of the Common Stock. In the absence of
one or more such quotations, the Board of Directors of the Company shall
determine the Current Market Price on the basis of such quotation as it in good
faith determines appropriate.
"Securities" means the shares of Common Stock and Warrants issued and
sold to Buyer at Closing I and at Future Closings and Optional Closings, in
accordance with the terms and conditions of this Agreement. At such Closings,
the Company will issue and sell a number of Warrants (rounded to the nearest
whole Warrant) equal to the number of shares of Common Stock purchased by Buyer
times one-third. Securities shall not include Additional Securities.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Value" means, in respect of Securities or Additional Securities sold
to Buyer at a Closing, the total cash consideration paid by Buyer for such sale.
"Warrants" means the Common Stock Purchase Warrants issued pursuant to
the Warrant Agreement to Buyer in connection with the issuance and sale of
Securities under this Agreement. Each Warrant purchased by Buyer will entitle
Buyer to acquire one share of Common Stock at any time during the five years
subsequent to such purchase at the Exercise Price.
ARTICLE II
ISSUANCE AND SALE OF SECURITIES
2.1 ISSUANCE AND SALE OF SECURITIES. Upon the terms set forth herein,
during the Initial Period the Company will issue and sell to Buyer, and Buyer
will purchase from the Company, for an aggregate purchase price of up to $60
million payable in immediately available funds and in separate Closings as
provided in Section 3.1, Securities or Additional Securities or both. During the
Optional Period, at the Company's option, Buyer agrees to purchase from the
Company Optional Securities in accordance with the terms set forth below. After
the Collaboration Agreement expires or terminates, Buyer shall not be required
to purchase further Securities or Additional Securities pursuant to this
Agreement.
ARTICLE III
CLOSINGS
3.1 CLOSING. The closing of the sale and purchase of the Initial
Securities shall take place in separate closings: (i) Closing I, at 4:00 p.m.
New York time on the Effective Date simultaneously at the offices of the Company
and Buyer or at such other time and place as the parties may agree, and (ii)
Future Closings, subject to the conditions set forth in Section 3.4, on such
dates and times specified by the Company upon not less than 45 trading days'
written notice to the Buyer at the offices of the Company or at such other time
and place as the parties may agree.
The Optional Closings of the sale and purchase of any Optional
Securities purchased under this Agreement shall take place in separate closings,
on such dates and times specified by the Company during the Optional Period,
subject to the conditions set forth in Sections 3.4 and 3.5, upon not less than
45 trading days' written notice by the Company to the Buyer or as such other
time and place as the parties may agree.
3.2 PURCHASE OF SECURITIES.
(i) On the date of Closing I, subject to the satisfaction (or waiver)
of the conditions set forth in Articles VI and VII, the Company shall issue and
sell to Buyer and Buyer shall purchase from the Company 4,350,000 shares of
Common Stock, and Buyer shall also receive 1,450,000 Warrants, for an aggregate
purchase price of $42,934,500. Each Warrant will entitle Buyer to purchase one
share of Common Stock at any time during the five years subsequent to Closing I
at an Exercise Price of $9.87 per share, in accordance with the Warrant
Agreement.
(ii) During the Initial Period, if (x) the aggregate Value of
Securities and Additional Securities purchased by Buyer pursuant to this
Agreement is less than $60 million and (y) Buyer has not exceeded Buyer's Equity
Limitations, the Company may issue and sell to Buyer, and Buyer shall purchase
from the Company, Securities or Additional Securities to be determined by the
Company with a Value up to the difference between $60 million and the aggregate
Value of Securities or Additional Securities purchased in prior Closings,
subject to satisfaction (or waiver) of the conditions set forth in Section 3.4
and Articles VI and VII.
(iii) Subject to the Buyer's Equity Limitations, at any time after
Closing I until the end of the Optional Period that the Company issues and sells
Common Stock or other securities convertible or exchangeable into Common Stock
through an underwritten public offering, within 60 days of the closing of such
public offering, the Company may at its sole discretion notify Buyer that the
Company will issue and sell to Buyer, and Buyer will purchase, the same
securities offered and sold in the underwritten public offering on the same
terms and conditions as other purchasers of the underwritten securities in lieu
of Securities that otherwise could be issued and sold to Buyer under this
Agreement; provided, however, that Buyer shall in no case be required to
purchase Additional Securities equal to more than 25% of the securities sold to
other purchasers of such securities pursuant to the registration statement filed
with respect to the offering of the underwritten securities.
(iv) The Purchase Price of Common Stock issued as part of a sale of
Securities during the Initial Period shall be 122% of the Current Market Price.
The Purchase Price of Common Stock issued as part of a sale of Securities during
the Optional Period shall be the same as the Exercise Price of the Warrant
issued as part of the sale of Securities.
3.3 DOCUMENTS TO BE DELIVERED. At any Closing, the Company shall
deliver to Buyer a certificate for the Securities being purchased by the Buyer
hereunder dated the date thereof and registered in the name of Buyer, and the
Buyer shall pay the purchase price for the Securities being purchased by the
Buyer hereunder on such date by wire transfer to the Company of immediately
available funds, in accordance with the Company's written wiring instructions,
against delivery of duly executed certificates representing the Securities being
purchased by the Buyer hereunder and the Company shall deliver such certificates
against delivery of such purchase price.
3.4 MINIMUM PURCHASE REQUIRED FOR FUTURE AND OPTIONAL CLOSINGS;
LIMITATION. During the Initial Period, at any time until Buyer has purchased
Securities or Additional Securities having a Value of $58 million, and
throughout the Optional Period, Buyer will not be required to purchase and the
Company will not be required to issue Securities or Additional Securities or
otherwise conduct a Closing unless such Closing would result in Buyer purchasing
at least 200,000 shares of Common Stock (or Additional Securities convertible
into at least 200,000 shares of Common Stock) or paying at least $2 million in
the aggregate for the purchase of Securities or Additional Securities at such
Closing. In no event will Buyer be required to purchase Securities or Additional
Securities under this Agreement more frequently than once in any calendar
quarter.
3.5 PURCHASE OF OPTIONAL SECURITIES. The Company and Buyer hereby
agree that during the Optional Period, upon not less than 45 trading days'
written notice ("Put Notice"), the Company may issue and sell to Buyer, and
Buyer shall purchase from the Company, such amount of Optional Securities to be
determined by the Company, subject to Buyer's Equity Limitations and the
limitations set forth in Section 3.4 and in the Collateral Agreements (if any).
The Company may, but shall not be required to, give a Put Notice at any time
during the Optional Period, subject to the limitations contained in this
Agreement. The Put Notice shall specify the date, time, and place of the
Optional Closing and any other information that the Company deems relevant.
3.6 LOCK UP. Buyer agrees that during the period beginning Closing I
and ending on the third anniversary of such date (the "Lock-Up Period"), Buyer
will not in any way sell or transfer any Securities or Additional Securities
purchased by Buyer (except to a wholly-owned subsidiary or affiliate of Buyer,
which shall agree to be bound by the provisions of this Agreement and the
Collateral Agreements insofar as they apply hereto), provided, however, Buyer
may sell or transfer such Securities or Additional Securities solely for the
purpose of reducing Buyer's ownership to no more than 20% of the Outstanding
Securities or 20% of the votes represented by the Company's securities.
3.7 FURTHER AGREEMENTS REGARDING BUYER'S EQUITY LIMITATIONS.
(i) During the term of this Agreement, Buyer hereby agrees that Buyer
and its affiliates, including any of its pension plans or employee benefit
plans, shall not purchase Common Stock or other equities of the Company
convertible or exercisable into Common Stock other than pursuant to the terms
and conditions of this Agreement. In addition, Buyer agrees that for itself and
its affiliates, including any of its pension plans or employee benefit plans,
that it will not, during the term of this Agreement or the Collateral Agreements
(whichever is later), without the prior written consent of the Company, directly
or indirectly, acquire or own beneficially and/or of record securities of the
Company in excess of the Buyer's Equity Limitations.
(ii) In the event Buyer directly or indirectly owns beneficially
and/or of record securities of the Company in excess of the Buyer's Equity
Limitations (as a result of no intentional act or fault of Buyer to exceed its
Equity Limitations) and Buyer is in full compliance with the terms and
conditions of this Agreement and the Collateral Agreements, subject to the
limitations set forth in the next succeeding paragraph, then the Company shall
purchase from the Buyer such number of shares of Common Stock and/or Warrants
and/or or Additional Securities so that as a result of such purchase by the
Company, the Buyer shall not own securities of the Company in excess of the
Buyer's Equity Limitations. The Company shall have the sole discretion regarding
the nature and amount of Warrants, Common Stock, or Additional Securities it
purchases under this Section, provided, however, that the Company will purchase
unregistered Common Stock before purchasing registered securities. The purchase
price of any shares of Common Stock or other security convertible or exchangable
into Common Stock purchased by the Company pursuant to this Section 3.7(ii)
shall equal or be determined in the same manner as the then Current Market Price
and the purchase price of any Warrants purchased by the Company from the Buyer
pursuant to this Section 3.7(ii) shall equal the value of the Warrants
determined in accordance with the Black-Scholes model of warrant pricing as set
forth in Appendix A.
(iii) The Company shall not be required to purchase any shares of
Common Stock and/or Warrants and/or Additional Securities pursuant to Section
3.7(ii) in the event that Buyer owns securities of the Company in excess of
Buyer's Equity Limitations as a result of the Company purchasing or retiring
shares of its outstanding capital stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Buyer as of the
Effective Date, as of the date of any future closings with respect to Sections
4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9 (for the period since the most
recent Company SEC report), and 4.10 (except as disclosed in the Company SEC
Reports), and 4.11 (except as disclosed in the Company SEC Reports), and as of
the date of any applicable Optional Closing as follows:
4.1 ORGANIZATION AND STANDING. The Company has been duly incorporated
and is validly existing and in good standing under the laws of the State of New
York with the corporate power and corporate authority to own and lease its
property, to conduct its business as conducted by it in the manner described in
the Company SEC Reports (as defined) and to execute and deliver this Agreement
and each of the Collateral Agreements. The Company has corporate power and
authority to perform and to carry out the transactions contemplated by this
Agreement and each of the Collateral Agreements. The Company is qualified to do
business and is in good standing in the State of New York.
4.2 CAPITALIZATION. As of April 30, 1997, the authorized capital stock
of the Company consisted of the following: (a) 60,000,000 shares of Common
Stock, of which (i) 20,855,186 shares were issued and outstanding, (ii)
4,335,824 shares were reserved for future issuance upon conversion of the Class
A Common Stock, each share of the Class A Common Stock being convertible into
one share of Company Common Stock, (iii) 3,328,165 shares were reserved for
future issuance under the Company's 1990 Amended and Restated Long-Term
Incentive Plan, and (iv) 807,400 shares were reserved for future issuance in
accordance with certain warrants issued to Amgen Inc. and Medtronic, Inc.; (b)
40,000,000 shares of Class A Common Stock, of which 4,335,824 were issued and
outstanding; and (c) 30,000,000 shares of Preferred Stock, (i) none of which
were issued and outstanding, and (ii) 100,000 shares of which are reserved for
issuance as Series A Junior Participating Preferred Stock in accordance with the
Rights Agreement dated as of September 20, 1996. Except as set forth in the
Company SEC Reports, no material change in such capitalization has occurred
between April 30, 1997 and the date hereof. All of the issued and outstanding
shares of Common Stock, Class A Common Stock, and Preferred Stock have been duly
authorized, and all of the issued and outstanding shares of the Common Stock and
the Class A Common Stock are validly issued and are fully paid and
non-assessable. Except as set forth in the Company SEC Reports or as provided in
this Agreement, there is not, nor upon the consummation of the transactions
contemplated herein, will there be (i) any subscription, warrant, option,
convertible security, or any other right (contingent or otherwise) to purchase
or acquire any shares of the capital stock of the Company, (ii) any commitment
of the Company to issue any subscription, warrant, option, convertible security,
or other such right or to issue or distribute to holders of any share of its
capital stock any evidence of indebtedness or assets of the Company, or (iii)
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. Except as
set forth in the Company SEC Reports or as provided in this Agreement, no person
is entitled to, nor upon the consummation of the transactions contemplated
thereby will any person be entitled to (i) any preemptive or similar right with
respect to the issuance of any capital stock of the Company, or (ii) any rights
with respect to the registration of any capital stock of the Company under the
Securities Act.
4.3 ISSUANCE OF SECURITIES. As of the time of Closing I, the issuance,
sale, and delivery of up to $60 million of Securities under this Agreement have
been duly authorized and the Securities have been reserved for issuance by all
necessary corporate action on the part of the Company (no consent or approval of
the shareholders of the Company being required by law, by the Restated
Certificate of Incorporation or Bylaws of the Company, or the qualification
criteria of the Nasdaq National Market), and the Securities, when so issued,
sold, and delivered against payment therefor in accordance with the provisions
of this Agreement, will be duly and validly issued, fully paid, and
non-assessable and not subject to preemptive or any other similar rights of the
shareholders of the Company or others and free, at time of issuance, of all
restrictions on transfer subject to restrictions on transfer imposed by
applicable federal and state securities laws.
4.4 AUTHORITY FOR AGREEMENT. The execution, delivery, and performance
by the Company of this Agreement and each of the Collateral Agreements have been
duly authorized by all necessary corporate action, and this Agreement and each
of the Collateral Agreements have been duly executed and delivered and
constitute valid and binding obligations of the Company enforceable in
accordance with their respective terms, subject to bankruptcy or equitable laws
that might affect the enforceability of this Agreement and each of the
Collateral Agreements. The execution and delivery by the Company of this
Agreement and each of the Collateral Agreements, and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without
limitation, the issuance and sale of the Securities), will not violate any
provision of law and will not conflict with or result in any breach of any of
the terms, conditions or provisions of, or constitute a default under, or result
in the creation of any lien, security interest, charge, or encumbrance upon any
of the properties, assets or outstanding capital stock of the Company, under the
Company's Restated Certificate of Incorporation or Bylaws or any indenture,
lease, agreement, or other instrument to which the Company is a party or by
which it or any of its properties is bound, or any decree, judgment, order,
statute, rule, or regulation applicable to the Company.
4.5 GOVERNMENTAL CONSENTS. No consent, approval, order, or
authorization of, or registration, qualification, designation, declaration, or
filing with, any governmental or regulatory authority is required on the part of
the Company in connection with the execution and delivery of this Agreement and
each of the Collateral Agreements, and the consummation of the transactions
contemplated hereby and thereby (including, without limitation, the offer,
issue, sale, and delivery of the Securities), except such filings as shall have
been made or consents or approvals obtained prior to and which shall be
effective on and as of the Closing.
Based on the representations and warranties made by Buyer in Article V
of this Agreement, the offer and sale of the Shares to Buyer will be in
compliance with applicable federal and state securities laws.
4.6 LITIGATION. Except as set forth in the Company SEC Reports, there
are no material actions, suits, proceedings, or investigations, either at law or
in equity, or before any commission or other administrative authority in any
United States or foreign jurisdiction, of any kind now pending or, to the best
of the Company's knowledge, threatened or proposed involving the Company or any
of its properties or assets or which questions the validity or legality of the
transactions contemplated hereby, or to the Company's actual knowledge, against
its employees or consultants with respect to the Company's business.
4.7 SEC FILINGS; FINANCIAL STATEMENTS.
(a) The Company has filed all forms, reports and documents required to
be filed with the Commission since May 9, 1997 (collectively, the "Company SEC
Reports"). The Company SEC Reports (i) were prepared in all material respects in
accordance with the requirements of the Securities Act or the Exchange Act, as
the case may be, and (ii) did not at the time they were filed (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 the light of the circumstances under which they were
made, not misleading.
(b) Each of the financial statements (including, in each case, any
related notes thereto) contained in the Company SEC Reports was prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
thereto), and each was complete and correct in all material respects and
presented fairly in all material respects presented the financial position of
the Company as at the respective dates thereof and the results of its operations
and cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be material in amount.
4.8 BROKERS. No broker, finder, or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.
4.9 NO UNDISCLOSED LIABILITIES. The Company does not have any material
liabilities (absolute, accrued, contingent, or otherwise) except liabilities in
the aggregate adequately provided for in the Company's unaudited balance sheet
(including any related notes thereto) for the quarter ended March 31, 1997
included in the Company's Quarterly Report on Form 10-Q for the quarter year
ended March 31, 1997 (the "March 31, 1997 Balance Sheet").
4.10 ABSENCE OF CHANGES. Since May 9, 1997, there has been no material
adverse change in the financial condition, business, operations, or assets of
the Company.
4.11 NO DEFAULTS. The Company is not in default (a) under its Restated
Certificate of Incorporation or Bylaws, each as amended or restated to date, or
any indenture, mortgage, lease agreement, contract, purchase order or other
instrument to which it is a party or by which it or any of its property is bound
or affected or in violation of (b) any order, writ, injunction or decree of any
court of any federal, state, municipal, or other governmental department,
commission, board, bureau, agency, or instrumentality, domestic or foreign,
which defaults, either singly or in the aggregate, would have a material adverse
effect on the Company. At the time of the Closing, to the best knowledge of the
Company, there will exist no condition, event, or act which constitutes, or
which after notice, lapse of time or both would constitute, a material default
under any of the foregoing which, either singly or in the aggregate, would have
a material adverse effect on the Company.
4.12 OFFERINGS. Except as contemplated by this Agreement or the
Company's 1990 Amended and Restated Long-Term Incentive Plan or as otherwise
disclosed by the Company to Buyer, the Company does not have any current plans
or intentions to issue any shares of its capital stock or any other securities
or any securities convertible or exchangeable into shares of Common Stock or any
other securities.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER
Buyer hereby represents and warrants to the Company as follows:
5.1 LEGAL POWER. Buyer has the requisite legal power to enter into
this Agreement and the Collateral Agreements, to purchase the Securities and or
Additional Securities hereunder, and to carry out and perform its obligations
under the terms of this Agreement and the Collateral Agreements.
5.2 DUE EXECUTION. This Agreement and the Collateral Agreements have
been duly authorized, executed, and delivered by Buyer, and, upon due execution
and delivery by the Company, this Agreement and the Collateral Agreements will
be valid and binding agreements on Buyer enforceable in accordance with their
respective terms, subject to laws of general application relating to bankruptcy,
insolvency, and the relief of debtors and rules of law governing specific
performance, injunctive relief, or other equitable remedies and compliance with
the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
5.3 INVESTMENT REPRESENTATIONS.
(a) Buyer is acquiring the Securities for its own account, not as
nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act.
(b) Buyer understands that (i) the Securities have not been registered
under the Securities Act by reason of a specific exemption therefrom, that they
must be held by it indefinitely, and that it must, therefore, bear the economic
risk of such investment indefinitely, unless a subsequent disposition thereof is
registered under the Securities Act or is exempt from such registration; and
(ii) each certificate representing the Securities will be endorsed with the
restrictive legend set forth in the Registration Rights Agreement.
(c) Buyer is aware of the provisions of Rule 144 promulgated under the
Securities Act which permits limited resale of shares purchased in a private
placement (i) by non-affiliates of a company not less than two (2) years after
such non-affiliate had purchased and paid for the security to be sold, or (ii)
subject to the satisfaction of certain conditions, including, among other
things, the existence of a public market for the shares, the availability of
certain current public information about the Company, the resale occurring not
less than one (1) year after a party has purchased and paid for the security to
be sold, the sale being through a "broker's transaction" or in transactions
directly with a "market maker" (as provided by Rule 144(f)) and the number of
shares being sold during any three-month period not exceeding specified
limitations.
5.4 BROKERAGE. There are no claims for brokerage commissions, finders
fees, or similar compensation in connection with the transactions contemplated
by this Agreement based on any arrangement or agreement made by or on behalf of
Buyer.
ARTICLE VI
CONDITIONS TO CLOSING OF BUYER
Buyer's obligation to purchase Securities at Closing I and at any
Optional Closing in respect of the purchase and sale of Securities is subject to
the fulfillment to Buyer's satisfaction, at or prior to Closing I, as of the
date of any future closings with respect to Sections 4.1, 4.2, 4.3, 4.4, 4.5,
4.6, 4.7, 4.8, 4.9 (for the period since the most recent Company SEC report),
and 4.10 (except as disclosed in the Company SEC Reports), and 4.11 (except as
disclosed in the Company SEC Reports), and any applicable Optional Closing, of
all of the following conditions, any of which may be waived by Buyer:
6.1 REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF OBLIGATIONS.
The representations and warranties made by the Company in Article IV hereof
shall be true and correct on the date of the Closing with the same force and
effect as if they had been made on and as of said date; and the business,
financial condition, operations, and assets of the Company shall not have been
adversely affected in any material way prior to the Closing.
6.2 COLLATERAL AGREEMENTS. The Company and Buyer shall have entered
into a Collaboration Agreement substantially in the form of Exhibit A hereto, a
Warrant Agreement substantially in the form of Exhibit B hereto, and a
Registration Rights Agreement substantially in the form of Exhibit C hereto.
6.3 OPINION OF THE COMPANY'S COUNSEL. Buyer shall have received from
the General Counsel to the Company, an opinion letter substantially in the form
attached hereto as Exhibit C, addressed to it, dated the date of the Closing. In
rendering the opinion called for under this Section 6.3, counsel may rely as to
factual matters on certificates of public officials, officers of the Company,
and officers of Buyer.
6.4 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions required to be performed under this Agreement
at the Closing and all documents and instruments incident to such transactions
shall have been reasonably approved by Buyer and Buyer shall have received all
such counterpart originals or certified or other copies of such documents as it
may reasonably request.
ARTICLE VII
CONDITIONS TO CLOSING OF THE COMPANY
The Company's obligations to issue and sell the Securities or
Additional Securities at each Closing is subject to the fulfillment to the
Company's satisfaction, on or prior to each Closing, of the following
conditions, any of which may be waived by the Company:
7.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties made by Buyer in Article 4 hereof shall be true and correct on the
date of the Closing, with the same force and effect as if they had been made on
and as of said date.
7.2 PERFORMANCE OF OBLIGATIONS. Buyer shall have performed and
complied with all agreements and conditions herein required to be performed or
complied with by it on or before the Closing.
7.3 QUALIFICATIONS, LEGAL INVESTMENT. All authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required to be obtained prior to or at the
Closing in connection with the lawful sale and issuance of the Securities or
Additional Securities pursuant to this Agreement shall have been duly obtained
and shall be effective on and as of the Closing. At the time of the Closing, the
sale and issuance of the Securities or Additional Securities shall be legally
permitted by all laws and regulations to which Buyer and the Company are
subject.
7.4 COLLATERAL AGREEMENTS. The Company and Buyer shall have entered
into a Collaboration Agreement substantially in the form of Exhibit A hereto, a
Warrant Agreement substantially in the form of Exhibit B hereto, and a
Registration Rights Agreement substantially in the form of Exhibit C hereto.
ARTICLE VIII
MISCELLANEOUS
8.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of New York.
8.2 SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive the Closing for the period prescribed by
the applicable statute of limitations. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder as of the date of such certificate or instrument.
8.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit or, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
8.4 ENTIRE AGREEMENT. This Agreement, the Exhibits hereto, and the
other documents delivered pursuant hereto constitute the full and entire
understanding and agreement along the parties with regard to the subjects hereof
and no party shall be liable or bound to any other party in any manner by any
representations, warranties, covenants or agreements except as specifically set
forth herein or therein. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parities hereto and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
8.5 SEPARABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall to the extent practicable, be
modified so as to make it valid, legal and enforceable and to retain as nearly
as practicable the intent of the parties, and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
8.6 AMENDMENT AND WAIVER. 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, either retroactively or prospectively, and either
for a specified period of time or indefinitely), only with the written consent
of the Company and Buyer.
8.7 DELAYS OR OMISSIONS. No reasonable delay or omission to exercise
any right, power or remedy accruing to Buyer upon any breach, default or
noncompliance of the Company 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 any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character on Buyer's part of
any breach, default or noncompliance under this Agreement or any waiver on
Buyer's part of any provisions or conditions of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in such
writing, and that all remedies, either under this Agreement, by law, or
otherwise afforded to buyer, shall be cumulative and not alternative.
8.8 NOTICES, ETC. Any notices or communications provided for in this
Agreement to be made by either of the Parties to the other shall be in writing,
in English, and shall be made by prepaid air mail with return receipt addressed
to the other at its address set forth below. Any such notice or communication
may also be given by hand or facsimile to the appropriate designation with
confirmation of receipt. Either Party may by like notice specify an address to
which notices and communications shall thereafter be sent. Notices sent by mail
shall be effective upon receipt; notices given by hand shall be effective when
delivered.
Notices for Regeneron shall be sent to:
Regeneron Pharmaceuticals, Inc.
Attn: Corporate Secretary
777 Old Saw Mill River Road
Tarrytown, New York 10591-6707
With copy to:
Regeneron Pharmaceuticals, Inc.
Attn: General Counsel
777 Old Saw Mill River Road
Tarrytown, New York 10591-6707
Notices for Procter & Gamble shall be sent to:
Procter & Gamble Pharmaceuticals, Inc.
Attn: President
One Procter & Gamble Plaza
Cincinnati, Ohio 45202
With copy to:
Procter & Gamble Pharmaceuticals, Inc.
Attn: Associate General Counsel
Blue Ash Office Center
10200 Alliance Road
Cincinnati, Ohio 45242-4716
8.9 TITLES AND SUBTITLES. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
8.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument. The foregoing Agreement is hereby
executed as of the date first above written.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first written above.
REGENERON PHARMACEUTICALS, INC. THE PROCTER & GAMBLE COMPANY
/S/LEONARD S. SCHLEIFER /S/G. GILBERT CLOYD
By:-------------------------------- By:--------------------------------
APPENDIX A
For Securities sold during the Optional Period, the Exercise Price of the
Warrant shall be determined such that the excess of the Exercise Price over the
Current Market Price equals one-third of the value of the Warrant, rounded to
the nearest whole cent. The value of the Warrant shall be determined using the
Black-Scholes model with the following values:
TERM OF WARRANT: Five years
STOCK PRICE: Current Market Price
DIVIDEND: The actual cash dividend per share of Common Stock paid by the
Company in the immediately prior twelve months
INTEREST RATE: The interest rate on 5-year Treasury notes as reported in The
Wall Street Journal on the last trading day used to calculate Current Market
Price or, if no such rate is reported for that date, the last day prior to that
date for which such an interest rate is reported. The interest rate shall be the
effective yield on Treasury notes maturing in the same month five years from the
date of calculation or the average of such yields if more than one yield is
reported for that month or the average of the yields for the months closest to
the date of calculation if no yields are reported for that month.
VOLATILITY: The actual volatility of daily closing bid prices of Common Stock
during the three full calendar years immediately preceding the year in which the
Closing in question occurs.
EXAMPLE (for illustration only):
If the Current Market Price of Common Stock is $8.50 and the interest rate
(calculated as above) is 6.75%, and the volatility (calculated as above) is 80%,
then for an Exercise Price of a Warrant of $10.35, the value of a Warrant would
be $5.56 (per Black-Scholes) and (1) the excess of the Exercise Price over the
Current Market Price would be $1.85 [$10.35 - $8.50] and (2) one-third of the
value of the Warrant equals $1.85 [$5.56 / 3].
EXHIBIT (99.2)
THIS WARRANT AGREEMENT (the "Agreement") is dated as of May 13, 1997
and entered into by and between Regeneron Pharmaceuticals, Inc., a New York
corporation (the "Company"), and The Procter & Gamble Company, an Ohio
corporation ("Procter & Gamble").
WHEREAS, the Company proposes to issue to Procter & Gamble, or its
designee, Common Stock Purchase Warrants, as hereinafter described (the
"Warrants"), to purchase shares of Common Stock, $.001 par value (the "Common
Stock"), of the Company (the Common Stock issuable on exercise of the Warrants
being referred to herein as the "Warrant Shares"), pursuant to a Securities
Purchase Agreement dated as of the date hereof (the "Securities Purchase
Agreement").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1. Warrant Certificates. The certificates evidencing the
Warrants (the "Warrant Certificates") to be delivered pursuant to this Agreement
shall be in registered form only and shall be substantially in the form set
forth in EXHIBIT A attached hereto.
SECTION 2. Execution of Warrant Certificates. Warrant Certificates
shall be signed on behalf of the Company by its Chairman of the Board or its
President or a Vice President and by its Secretary or an Assistant Secretary
under its corporate seal. Each such signature upon the Warrant Certificates may
be in the form of a facsimile signature of the present or any future Chairman of
the Board, President, Vice President, Secretary or Assistant Secretary and may
be imprinted or otherwise reproduced on the Warrant Certificates and for that
purpose the Company may adopt and use the facsimile signature of any person who
shall have been Chairman of the Board, President, Vice President, Secretary, or
Assistant Secretary, notwithstanding the fact that at the time the Warrant
Certificates shall be delivered or disposed of he shall have ceased to hold such
office.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been disposed of by the Company, such Warrant
Certificates nevertheless may be delivered or disposed of as though such person
had not ceased to be such officer of the Company; and any Warrant Certificate
may be signed on behalf of the Company by any person who, at the actual date of
the execution of such Warrant Certificate, shall be a proper officer of the
Company to sign such Warrant Certificate, although at the date of the execution
of this Warrant Agreement any such person was not such officer.
SECTION 3. Registration. The Company shall number and register the
Warrant Certificates in a register as they are issued.
SECTION 4. Registration of Transfers and Exchanges. The Company shall
from time to time register the transfer of any outstanding Warrant Certificates
in a Warrant register to be maintained by the Company upon surrender of such
Warrant Certificates accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company, duly executed by the registered
holder or holders thereof or by the duly appointed legal representative thereof
or by a duly authorized attorney. Upon any such registration of transfer, a new
Warrant Certificate shall be issued to the transferee(s) and the surrendered
Warrant Certificate shall be cancelled and disposed of by the Company.
The Warrant holders agree that each certificate representing Warrant
Shares will bear the following legend:
"THIS WARRANT AND THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL, IN THE CASE OF THE SHARES, SUCH SHARES ARE REGISTERED
UNDER SUCH ACT OR, IN THE CASE OF THIS WARRANT AND THE SHARES, AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY IS OBTAINED
TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED."
The Warrant holders further agree that they shall not offer, sell, or
otherwise transfer the Warrants or Warrant Shares in violation of the foregoing
legend.
Warrant Certificates may be exchanged at the option of the holder(s)
thereof, when surrendered to the Company at its office for another Warrant
Certificate or other Warrant Certificates of like tenor and representing in the
aggregate a like number of Warrants. Warrant Certificates surrendered for
exchange shall be cancelled and disposed of by the Company.
In the event that a holder of Warrants (a "Selling Holder") desires to
transfer all or any part of its ownership of Warrants, the Company shall have
the following right of first refusal exercisable in connection with any such
transfer. The Selling Holder shall give the Company written notice specifying
the identify of the proposed purchasers, the number of Warrants to be sold, the
proposed purchase price, and the terms of the proposed purchase (the "Notice").
The Company shall have fifteen (15) days from the date of receiving the Notice
within which to exercise the right to acquire all or part of the Warrants that
are being offered at the price and upon the terms set forth in the Notice. Such
right shall be exercisable by written notice to the Selling Holder. If the
Company elects to purchase all or any part of the Warrants described in the
Notice, the Selling Holder shall consummate such transaction within thirty (30)
days form the date of the Notice, provided, in the event that the Company elects
to exercise its right to purchase part of the Warrants proposed to be sold in
the Notice, that such purchase would not decrease the price of each remaining
Warrant proposed to be sold in the Notice. If the Company does not elect to
purchase all or any part of such offered Warrants, then within sixty (60) days
from the date of the Notice, the Selling Holder may transfer all or part of such
Warrants to the proposed purchaser(s) on the terms and at the purchase price
specified in the Notice.
Subject to the foregoing right of first refusal of the Company and the
provisions of this Agreement, any holder may transfer all or any part of its
ownership of Warrants, provided that such sale, assignment, pledge, mortgage,
transfer or other disposition is not being made to an entity in the
pharmaceutical or biotechnology business, unless more than 50% of the voting
control of such entity is owned by the transferring holder. Notwithstanding the
foregoing, any holder of Warrants may transfer its Warrants to any wholly-owned
affiliate or subsidiary of such holder, whether now in existence or hereafter
created, formed or organized.
SECTION 5. Warrants; Exercise of Warrants. A Warrant may be exercised
upon surrender to the Company at its office designated for such purpose (the
address of which is set forth in Section 13 hereof) of the certificate or
certificates evidencing the Warrants to be exercised with the form of election
to purchase duly filled in and signed, which signature shall be guaranteed by a
bank or trust company having an office or correspondent in the United States or
a broker or dealer which is a member of a registered securities exchange or the
National Association of Securities Dealers, Inc., and upon payment to the
Company of the exercise price (the "Exercise Price") which will be set forth in
Warrant Certificate, a form of which is attached hereto as Exhibit A, subject to
adjustment pursuant to Section 10, for the number of Warrant Shares in respect
of which such Warrants then exercised. Payment of the aggregate Exercise Price
shall be made in cash or by certified or official bank check payable to the
order of the Company.
Subject to the provisions of Section 6 hereof, upon such surrender of
Warrants and payment of the Exercise Price the Company shall issue and cause to
be delivered with all reasonable dispatch to or upon the written order of the
holder and in such name or names as the Warrant holder may designate, a
certificate or certificates for the number of full Warrant Shares issuable upon
the exercise of such Warrants together with cash as provided in Section 11;
provided, however, that if any reclassification, consolidation, merger or lease
or sale of assets is proposed to be effected by the Company as described in
subsection (l) of Section 10 hereof, or a tender offer or an exchange offer for
shares of Common Stock of the Company shall be made, upon such surrender of
Warrants and payment of the Exercise Price as aforesaid, the Company shall, as
soon as possible, but in any event not later than two business days thereafter,
issue and cause to be delivered the full number of Warrant Shares issuable upon
the exercise of such Warrants in the manner described in this sentence together
with cash as provided in Section 11. Such certificate or certificates shall be
deemed to have been issued and any person so designated to be named therein
shall be deemed to have become a holder of record of such Warrant Shares as of
the date of the surrender of such Warrants and payment of the Exercise Price.
The Warrants shall be exercisable, at the election of the holders
thereof, either in full or from time to time in part and, in the event that a
certificate evidencing Warrants is exercised in respect of fewer than all of the
Warrant Shares issuable on such exercise at any time prior to the date of
expiration of the Warrants, a new certificate evidencing the remaining Warrant
or Warrants will be issued and delivered pursuant to the provisions of this
Section and of Section 2 hereof.
All Warrant Certificates surrendered upon exercise of Warrants shall
be cancelled and disposed of by the Company. The Company shall keep copies of
this Agreement and any notices given or received hereunder available for
inspection by the holders during normal business hours at its office.
SECTION 6. Payment of Taxes. The Company will pay all documentary
stamp taxes, if any, attributable to the initial issuance of Warrant Shares upon
the exercise of Warrants.
SECTION 7. Mutilated or Missing Warrant Certificates. In case any of
the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company may in its discretion issue, in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent number of
Warrants, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction of such Warrant Certificate and
indemnity, if requested, also reasonably satisfactory to it. Applicants for such
substitute Warrant Certificates shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
SECTION 8. Reservation of Warrant Shares. The Company will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Common Stock or its authorized and
issued Common Stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Warrant Shares upon exercise of the Warrants,
the maximum number of shares of Common Stock which may then be deliverable upon
the exercise of all the outstanding Warrants.
The Company or, if appointed, the transfer agent for the Common Stock
(the "Transfer Agent") and every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of any of the rights of
purchase aforesaid will be irrevocably authorized and directed at all times to
reserve such number of authorized shares as shall be required for such purpose.
The Company will keep a copy of this Agreement on file with the Transfer Agent
and with every subsequent transfer agent for any shares of the Company's capital
stock issuable upon the exercise of the rights of purchase represented by the
Warrants. The Company will furnish such Transfer Agent a copy of all notices of
adjustments and certificates related thereto, transmitted to each holder
pursuant to Section 12 hereof.
Before taking any action which would cause an adjustment pursuant to
Section 10 hereof to reduce the Exercise Price below the then par value (if any)
of the Warrant Shares, the Company will take any corporate action which may, in
the opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares at the Exercise
Price as so adjusted.
The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants will, upon issue, be fully paid, nonassessable, free of
preemptive rights and free from all documentary stamp taxes, liens, charges and
security interests with respect to the issue thereof.
SECTION 9. Obtaining Stock Exchange Listings. The Company will from
time to time take all action which may be necessary so that the Warrant Shares,
immediately upon their issuance upon the exercise of Warrants, will be listed on
the principal securities exchanges and markets within the United States of
America, if any, on which other shares of Common Stock are then listed.
SECTION 10. Adjustment of Exercise Price and Number of Warrant Shares
Issuable. The Exercise Price and the number of Warrant Shares issuable upon the
exercise of each Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 10. For purposes of this
Section 10, "Common Stock" means shares now or hereafter authorized of any class
of common stock of the Company and any other stock of the Company, however
designated, that has the right (subject to any prior rights of any class or
series of preferred stock) to participate in any distribution of the assets or
earnings of the Company without limit as to per share amount, including, without
limitation, the Class A Common Stock, par value $.001, of the Company.
(a) Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a greater
number of shares; or
(3) combines its outstanding shares of Common Stock into a smaller
number of shares;
then the Exercise Price in effect immediately prior to such action shall then be
adjusted in accordance with the formula:
0
---
E1 = E x A
Where:
E1 = the adjusted Exercise Price
E = the current Exercise Price
O = the number of shares of Common Stock outstanding prior to such
action
A = the number of shares of Common Stock outstanding immediately
after such action
In the case of a dividend or distribution the adjustment shall become
effective immediately after the record date for determination of holders of
shares of Common Stock entitled to receive such dividend or distribution, and in
the case of a subdivision or combination, the adjustment shall become effective
immediately after the effective date of such corporate action.
If after an adjustment a holder of a Warrant upon exercise of it may
receive shares of two or more classes of capital stock of the Company, the
Company shall determine the allocation of the adjusted Exercise Price between
the classes of capital stock. After such allocation, the exercise privilege, the
number of shares issuable upon such exercise, and the Exercise Price of each
class of capital stock shall thereafter be subject to adjustment on terms
comparable to those applicable to Common Stock in this Section 10.
Such adjustment shall be made successively whenever any event listed
above shall occur.
(b) Adjustment for Rights Issue.
If the Company distributes any rights, options or warrants to all
holders of its Common Stock entitling them at any time after the record date
mentioned below to purchase shares of Common Stock at a price per share less
than the Current Market Price (as defined in SECTION 10(f)) per share of Common
Stock on that record date, the Exercise Price shall be adjusted in accordance
with the formula:
N x P
O + -----
M
E1 = E x -----
O + N
where:
E1 = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock issuable upon
exercise of the rights, options or warrants offered.
P = the exercise price per share of the additional shares issuable
upon exercise of the rights, options or warrants.
M = the Current Market Price per share of Common Stock on the record
date.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Exercise Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.
(c) Adjustment for other Distributions.
If the Company distributes to all holders of its Common Stock any of
its assets (including but not limited to securities and cash), debt securities,
capital stock, or any rights or warrants to purchase assets, debt securities,
capital stock, or other securities of the Company, the Exercise Price shall be
adjusted in accordance with the formula:
M - F
E1 = E x _______
M
where:
E1 = the adjusted Exercise Price.
E = the current Exercise Price.
M = the Current Market Price per share of Common Stock on the record
date mentioned below.
F = the fair market value on the record date of the assets, debt
securities, capital stock or rights or warrants applicable to one
share of Common Stock. The Board of Directors shall determine the
fair market value.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
This subsection does not apply to (i) dividends, distributions,
combinations or issuances referred to in subsection (a) of this Section 10, (ii)
rights, options or warrants referred to in subsection (b) of this Section 10, or
(iii) non-extraordinary quarterly cash dividends distributed to all holders of
Common Stock.
(d) Adjustment for Common Stock Issue.
If the Company issues shares of Common Stock for a consideration per
share less than the Current Market Price per share of Common Stock on the date
the Company fixes the offering price of such additional shares, the Exercise
Price shall be adjusted in accordance with the formula:
P
O + ____
M
E1 = E x
_____
A
where:
E 1= the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the issuance
of such additional shares.
P = the aggregate consideration received for the issuance of such
additional shares.
M = the Current Market Price per share of Common Stock on the date of
issuance of such additional shares.
A = the number of shares outstanding immediately after the issuance of
such additional shares.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(1) the exercise of Warrants,
(2) rights, options, warrants or other distributions referred to in
subsections (b), (c) or (e) of this Section 10,
(3) Common Stock issued to the Company's directors, employees and
non-employee service providers under bona fide benefit plans adopted by the
Board of Directors and approved by the holders of Common Stock when required by
law, if such Common Stock would otherwise be covered by this subsection (d),
(4) Common Stock issued in a bona fide public offering pursuant to a
firm commitment underwriting, or
(5) issuances of shares of Common Stock for a consideration per share
less than 100%, but greater than 92%, of the Current Market Price per share of
Common Stock on the date the Company fixes the offering price of such additional
shares.
(e) Adjustment for Convertible Securities Issue.
If the Company issues any securities convertible into or exchangeable
for Common Stock (other than securities issued in transactions described in
subsections (b) and (c) of this Section 10) for a consideration per share of
Common Stock initially deliverable upon conversion or exchange of such
securities less than the Current Market Price per share of Common Stock on the
date of issuance of such securities, the Exercise Price shall be adjusted in
accordance with this formula:
P
O + _____
M
E1 = E x _______
O + D
where:
E1 = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the issuance
of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the Current Market Price per share of Common Stock on the date of
issuance of such securities.
D = the maximum number of shares deliverable upon conversion or in
exchange for such securities at the initial conversion or exchange
rate.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or exchange of
such securities have not been issued when such securities are no longer
outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion or exchange of such securities.
This subsection (e) does not apply to convertible securities issued in
a bona fide public offering pursuant to a firm commitment underwriting, nor does
this subsection apply to issuances of any securities convertible into or
exchangeable for Common Stock for a consideration per share of Common Stock
initially deliverable upon conversion or exchange of such securities less than
100%, but greater than 92%, of the Current Market Price per share of Common
Stock on the date of issuance of such securities.
(f) Current Market Price.
As used in this Agreement, the "Current Market Price" means the
average (rounded to the nearest cent) of the Quoted Price of the Common Stock
for the 30 consecutive trading days commencing 45 trading days before (and not
including) the date in question. The "Quoted Price" of the Common Stock is the
last reported sales price of the Common Stock as reported by Nasdaq National
Market, or if the Common Stock is listed on a national securities exchange, the
last reported sales price of the Common Stock on such exchange (which shall be
for consolidated trading if applicable to such exchange), or if neither so
reported or listed, the last reported bid price of the Common Stock. In the
absence of one or more such quotations, the Board of Directors of the Company
shall determine the Current Market Price on the basis of such quotations as it
in good faith considers appropriate.
(g) Consideration Received.
For purposes of any computation respecting consideration received
pursuant to subsections (d) and (e) of this Section 10, the following shall
apply:
(1) in the case of the issuance of shares of Common Stock for cash,
the consideration shall be the amount of such cash, provided that in no case
shall any deduction be made for any commissions, discounts or other expenses
incurred by the Company for any underwriting of the issue or otherwise in
connection therewith;
(2) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair market value thereof as determined in good
faith by the Board of Directors (irrespective of the accounting treatment
thereof), whose determination shall be conclusive, and described in a Board
resolution; and
(3) in the case of the issuance of securities convertible into or
exchangeable for shares, the aggregate consideration received therefor shall be
deemed to be the consideration received by the Company for the issuance of such
securities plus the additional minimum consideration, if any, to be received by
the Company upon the conversion or exchange thereof (the consideration in each
case to be determined in the same manner as provided in clauses (1) and (2) of
this subsection).
(h) When De Minimis Adjustment May Be Deferred.
No adjustment in the Exercise Price need be made unless the adjustment
would require an increase or decrease of at least 1% in the Exercise Price. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment.
All calculations under this Section shall be made to the nearest cent
or to the nearest 1/100th of a share, as the case may be.
(i) When No Adjustment Required.
No adjustment need be made for a transaction referred to in
subsections (a), (b), (c), (d) or (e) of this Section 10 if Warrant holders are
to participate in the transaction on a basis and with notice that the Board of
Directors determines to be fair and appropriate in light of the basis and notice
on which holders of Common Stock participate in the transaction.
No adjustment need be made for any issuances pursuant to the
Securities Purchase Agreement dated May 13, 1997.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
If the Company distributes or issues rights to all holders of its
Common Stock pursuant to a shareholder rights plan, then no adjustment shall be
made pursuant to this SECTION 10 upon such distribution or issuance if, upon
exercise of the Warrants, each holder thereof receives the same type and number
of unexpired rights it would have received (as adjusted for any event described
in Section 10(a) or 10(l)) had it exercised its Warrants, and been a holder of
the Warrant Shares issuable upon exercise thereof, prior to the record date for
such distribution or issuance.
To the extent Warrants become convertible into cash, no adjustment
need be made thereafter as to the cash. Interest will not accrue on the cash.
(j) Notice of Adjustment.
Whenever the Exercise Price is adjusted, the Company shall provide the
notices required by Section 12 hereof.
(k) Voluntary Reduction.
The Company from time to time may reduce the Exercise Price by any
amount for any period of time if the period is at least 20 days and if the
reduction is irrevocable during the period; provided, however, that in no event
may the Exercise Price be less than the par value of a share of Common Stock.
Whenever the Exercise Price is reduced pursuant to subsection 10(k),
the Company shall mail to Warrant holders a notice of the reduction. The Company
shall mail the notice at least 15 days before the date the reduced Exercise
Price takes effect. The notice shall state the reduced Exercise Price and the
period it will be in effect.
A reduction of the Exercise Price does not change or adjust the
Exercise Price otherwise in effect for purposes of subsections (a), (b), (c),
(d) and (e) of this Section 10.
(l) Reorganization of Company.
If any reclassification of the Common Stock of the Company or any
consolidation or merger of the Company with another entity, or the sale or lease
of all or substantially all of the Company's assets to another entity shall be
effected in such a way that holders of the Common Stock of the Company shall be
entitled to receive stock, securities or assets with respect to or in exchange
for such Common Stock, then, as a condition precedent to such reclassification,
consolidation, merger, sale or lease, lawful and adequate provisions shall be
made whereby the Warrant holder shall thereafter have the right to purchase and
receive upon the basis and the terms and conditions specified in this Agreement
and in lieu of the shares of Common Stock immediately theretofore purchasable
and receivable upon the exercise of the rights represented hereby, such shares
of stock, securities or assets as may be issued or payable in such
reclassification, consolidation, merger, sale or lease with respect to or in
exchange for the number of shares of Common Stock purchasable and receivable
upon the exercise of the rights represented hereby had such rights been
exercised immediately prior thereto, and in any such case appropriate provision
shall be made with respect to the rights and interests of the holders of the
Warrants to the end that the provisions hereof (including without limitation
provisions for adjustments of the Exercise Price and of the number of shares of
Common Stock purchasable and receivable upon the exercise of the Warrant) shall
thereafter be applicable, as nearly as may be, in relation to any shares of
stock, securities or assets thereafter deliverable upon the exercise hereof. The
Company will not effect any such reclassification, consolidation, merger, sale
or lease, unless prior to the consummation thereof the successor corporation (if
other than the Company) resulting from such reclassification, consolidation or
merger or the corporation purchasing or leasing such assets shall assume by a
supplemental Warrant Agreement, executed and mailed or delivered to the holders
of the Warrants at the last address thereof appearing on the books of Company,
the obligation to deliver to such holders such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holders may be
entitled to purchase.
If the issuer of securities deliverable upon exercise of Warrants
under the supplemental Warrant Agreement is an affiliate of the formed,
surviving, transferee or lessee corporation, that issuer shall join in the
supplemental Warrant Agreement.
If this subsection (l) applies, subsections (a), (b), (c), (d) and (e)
of this Section 10 do not apply.
(m) Company Determination Final.
Any determination that the Company or the Board of Directors must make
pursuant to this Section 10 is conclusive.
(n) When Issuance or Payment May Be Deferred.
In any case in which this Section 10 shall require that an adjustment
in the Exercise Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event (i)
issuing to the holder of any Warrant exercised after such record date the
Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise over and above the Warrant Shares and other capital stock of the
Company, if any, issuable upon such exercise on the basis of the Exercise Price
and (ii) paying to such holder any amount in cash in lieu of a fractional share
pursuant to Section 11; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional Warrant Shares, other capital stock and cash
upon the occurrence of the event requiring such adjustment.
(o) Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to this SECTION
10, each Warrant outstanding prior to the making of the adjustment in the
Exercise Price shall thereafter evidence the right to receive upon payment of
the adjusted Exercise Price that number of shares of Common Stock (calculated to
the nearest hundredth) obtained from the following formula:
E
N1 = N x ____
E1
where:
N1 = the adjusted number of Warrant Shares issuable upon exercise of a
Warrant by payment of the adjusted Exercise Price.
N = the number of Warrant Shares previously issuable upon exercise of
a Warrant by payment of the Exercise Price prior to adjustment.
E1 = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
(p) Form of Warrants.
Irrespective of any adjustments in the Exercise Price or the number or
kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
SECTION 11. Fractions Interests. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this SECTION 11,
be issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall pay an amount in cash equal to the Current Market Price on the day
immediately preceding the date the Warrant is presented for exercise, multiplied
by such fraction.
SECTION 12. Notices to Warrant Holders. Upon any adjustment of the
Exercise Price pursuant to Section 10, the Company shall promptly thereafter (i)
cause to be filed with the Company a certificate of a firm of independent public
accountants of recognized standing selected by the Board of Directors of the
Company (who may be the regular auditors of the Company) setting forth the
Exercise Price after such adjustment and setting forth in reasonable detail the
method of calculation and the facts upon which such calculations are based and
setting forth the number of Warrant Shares (or portion thereof) issuable after
such adjustment in the Exercise Price, upon exercise of a Warrant and payment of
the adjusted Exercise Price, which certificate shall be conclusive evidence of
the correctness of the matters set forth therein, and (ii) cause to be given to
each of the registered holders of the Warrant Certificates at his address
appearing on the Warrant register written notice of such adjustments by
first-class mail, postage prepaid. Where appropriate, such notice may be given
in advance and included as a part of the notice required to be mailed under the
other provisions of this Section 12.
In case:
(a) the Company shall authorize the issuance to all holders of shares
of Common Stock of rights, options or warrants to subscribe for or purchase
shares of Common Stock or of any other subscription rights or warrants; or
(b) the Company shall authorize the distribution to all holders of
shares of Common Stock of evidences of its indebtedness or assets (other than
cash dividends or cash distributions payable out of earnings or earned surplus
or dividends or distributions payable in shares of Common Stock); or
(c) of any consolidation or merger to which the Company is a party and
for which approval of any shareholders of the Company is required, or of the
conveyance or transfer of all or substantially all of the properties and assets
of the Company, or of any reclassification or change of Common Stock issuable
upon exercise of the Warrants (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination), or a tender offer or exchange offer for shares of
Common Stock; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company proposes to take any action that would require an
adjustment in the Exercise Price pursuant to subsections (a), (b), (c), (d) or
(e) of Section 10 and if the Company does not arrange for Warrant holders to
participate pursuant to subsection (i) of Section 10, or if the Company takes
any action that would require a supplemental Warrant Agreement pursuant to
subsection (l) of Section 10, then the Company shall cause to be given to each
of the registered holders of the Warrant Certificates at his address appearing
on the Warrant register, at least 20 days (or 10 days in any case specified in
clauses (a), (b) or (c) above) prior to the applicable record date hereinafter
specified, or promptly in the case of events for which there is no record date,
by first-class mail, postage prepaid, a written notice stating (i) the date as
of which the holders of record of shares of Common Stock to be entitled to
receive any such rights, options, warrants or distribution are to be determined,
or (ii) the initial expiration date set forth in any tender offer or exchange
offer for shares of Common Stock, or (iii) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that holders of record of shares of Common Stock shall be entitled
to exchange such shares for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up. The failure to give the notice required
by this Section 12 or any defect therein shall not affect the legality or
validity of any distribution, right, option, warrant, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the vote upon
any action.
Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof the right
to vote or to consent or to receive notice as shareholders in respect of the
meetings of shareholders or the election of Directors of the Company or any
other matter, or any rights whatsoever as shareholders of the Company.
SECTION 13. Notices to Company and Warrant Holder. Unless otherwise
provided herein, any notice, request, instruction or other document to be given
hereunder by any party to the others shall be in writing and delivered in person
or by courier, telegraphed, telexed or by facsimile transmission (with receipt
confirmed), or mailed by certified mail, postage prepaid, return receipt
requested (such mailed notice to be effective on the date such receipt is
acknowledged), as follows:
If to the Company:
Regeneron Pharmaceuticals, Inc.
777 Old Saw Mill River Road
Tarrytown, New York 10591-6707
Attn: Corporate Secretary
Telecopy No.: (914) 347-2113
With a copy to:
Regeneron Pharmaceuticals, Inc.
777 Old Saw Mill River Road
Tarrytown, New York 10591-6707
Attn: General Counsel
Telecopy No.: (914) 345-7721
If to Warrant Holder:
The Procter & Gamble Company
One Procter & Gamble Plaza
Cincinnati, Ohio 45202
Attn: President
With a copy to:
Procter & Gamble Pharmaceuticals, Inc.
Blue Ash Office Center
10200 Alliance Road
Cincinnati, Ohio 45242-4716
Attn: Associate General Counsel
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
SECTION 14. Supplements and Amendments. The Company may not supplement
or amend this Agreement without the prior written approval of the holders of
Warrant Certificates affected by such supplement or amendment.
SECTION 15. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company shall bind and inure to the
benefit of its respective successors and assigns hereunder.
SECTION 16. Termination. This Agreement shall terminate at 5:00 p.m.,
New York time on the fifth anniversary of the issuance of the final Warrant
issued pursuant to the Securities Purchase Agreement dated May 13, 1997.
Notwithstanding the foregoing, this Agreement will terminate on any earlier date
if all Warrants have been exercised.
SECTION 17. Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of New York and for all purposes shall be construed in accordance with the
internal laws of said State.
SECTION 18. Benefits of This Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company
and the registered holders of the Warrant Certificates any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company and the registered holders of the
Warrant Certificates.
SECTION 19. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
REGENERON PHARMACEUTICALS, INC.
/S/LEONARD S. SCHLEIFER
By: --------------------------------------------
Name: Leonard S. Schleifer
Title: President and Chief Executive Officer
- ---------------------------
Seal
Attest: ______________________
Secretary
THE PROCTER & GAMBLE COMPANY
/S/G. GILBERT CLOYD
By:_________________________________
Name: G. Gilbert Cloyd
Title: President
- ---------------------------
Seal
Attest: ______________________
Secretary
EXHIBIT A
[Form of Warrant Certificate]
THIS WARRANT AND THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL, WITH
RESPECT TO THE SHARES, SUCH SHARES ARE REGISTERED UNDER SUCH ACT OR, WITH
RESPECT TO THIS WARRANT OR THE SHARES, AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY IS OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS
NOT REQUIRED.
EXERCISABLE ON OR BEFORE 5:00 P.M., NEW YORK TIME, _______________, 20__
No. ______
Warrants
Warrant Certificate
REGENERON PHARMACEUTICALS, INC.
This Warrant Certificate certifies that The Procter & Gamble Company.,
or registered assigns, is the registered holder of _____ Warrants expiring
_____, 20__ (the "Warrants") to purchase Common Stock, $.001 par value (the
"Common Stock"), of Regeneron Pharmaceuticals, Inc., a New York corporation (the
"Company"). Each Warrant entitles the holder to receive from the Company upon
exercise on or before 5:00 p.m. New York Time on _____ __, 20__, one fully paid
and nonassessable share of Common Stock (a "Warrant Share") at the initial
exercise price (the "Exercise Price") of $____ payable in lawful money of the
United States of America upon surrender of this Warrant Certificate and payment
of the Exercise Price as defined in the Securities Purchase Agreement at the
office of the Company designated for such purpose, subject to the conditions set
forth herein and in the Warrant Agreement referred to herein.
No Warrant may be exercised after 5:00 p.m., New York Time on _____,
200__, and to the extent not exercised by such time such Warrants shall become
void.
A-1
The Warrants evidenced by this Warrant Certificate are issued pursuant
to a Warrant Agreement dated as of May 13, 1997 (the "Warrant Agreement"), duly
executed and delivered by the Company, which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder) of
the Warrants. A copy of the Warrant Agreement may be obtained by the holder
hereof upon written request to the Company. This Warrant is being issued
pursuant to the Securities Purchase Agreement dated May 13, 1997.
Warrants may be exercised at any time on or before 5:00 p.m., New York
time on ____ __, 20__. The holder of Warrants evidenced by this Warrant
Certificate may exercise them by surrendering this Warrant Certificate, with the
form of election to purchase set forth hereon properly completed and executed,
together with payment of the Exercise Price at the office of the Company
designated for such purpose. In the event that upon any exercise of Warrants
evidenced hereby the number of Warrants exercised shall be less than the total
number of Warrants evidenced hereby, there shall be issued to the holder hereof
or his assignee a new Warrant Certificate evidencing the number of Warrants not
exercised. No adjustment shall be made for any dividends on any Common Stock
issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price set forth on the face hereof may, subject to certain
conditions, be adjusted. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Common Stock issuable upon the
exercise of each Warrant shall be adjusted. No fractions of a share of Common
Stock will be issued upon the exercise of any Warrant, but the Company will pay
the cash value thereof determined as provided in the Warrant Agreement.
The holders of Warrants are entitled to certain registration rights
with respect to the Common Stock purchasable upon exercise thereof. Said
registration rights are set forth in full in a Registration Rights Agreement
dated as of May 13, 1997, between the Company and Procter & Gamble. A copy of
the Registration Rights Agreement may be obtained by the holder hereof upon
written request to the Company.
Warrant Certificates, when surrendered at the office of the Company by
the registered holder thereof in person or by legal representative or attorney
duly authorized in writing, may be exchanged, in the manner and subject to the
limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Company a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing in the aggregate a like number of
Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
A-2
The Company may deem and treat the registered holder(s) thereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, of any distribution to the holder(s) hereof, and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles any holder hereof to
any rights of a stockholder of the Company.
This Warrant Certificate shall not be valid unless countersigned by
the Company, as such term is used in the Warrant Agreement.
This Warrant Certificate shall not be offered, sold or otherwise
transferred in violation of the legend on the first page hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be signed by its President and by its Secretary and has caused its corporate
seal to be affixed hereunto or imprinted hereon.
Dated: ____ , ____
REGENERON PHARMACEUTICALS, INC.
By: _________________________________
Name:
Title:
By: __________________________________
Name:
Title:
A-3
[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive _________ shares of Common
Stock and herewith tenders payment for such shares to the order of REGENERON
PHARMACEUTICALS, INC. in the amount of $_____ in accordance with the terms
hereof. The undersigned requests that a certificate for such shares be
registered in the name of _____________, whose address is ______________ and
that such shares be delivered to ________________ whose address is
____________________________. If said number of shares is less than all of the
shares of Common Stock purchasable hereunder, the undersigned requests that a
new Warrant Certificate representing the remaining balance of such shares be
registered in the name of [ ], whose address is ___________________, and that
such Warrant Certificate be delivered to _________________, whose address is
__________________.
Signature: ______________________________
Date: __________
Signature Guaranteed: _____________________
EXHIBIT (99.3)
REGISTRATION RIGHTS AGREEMENT
between
REGENERON PHARMACEUTICALS, INC.
and THE PROCTER & GAMBLE COMPANY
May 13, 1997
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement, is made as of May 13, 1997, by and
between Regeneron Pharmaceuticals, Inc., a New York corporation (the "Company"),
and The Procter & Gamble Company, an Ohio corporation (the "Purchaser").
1. INTRODUCTION AND CERTAIN DEFINITIONS. The Company is a party to a
Securities Purchase Agreement (the Securities Purchase Agreement), dated May 13,
1997, with the Purchaser and pursuant to which the Company has agreed, among
other things, to issue shares of its common stock, par value .001 per share (the
Common Stock) and warrants to purchase shares of Common Stock, to the Purchaser.
This Agreement shall become effective upon the issuance of such securities to
the Purchaser pursuant to the Securities Purchase Agreement. Certain capitalized
terms used in this Agreement are defined below; references to sections shall be
to sections of this Agreement. Terms not otherwise defined herein shall have the
meanings assigned to them in the Securities Purchase Agreement.
1.1. As used in this Agreement, the following terms shall have the
following respective meanings:
"Affiliate" means any corporation, company, partnership, joint
venture, or other entity which controls, is controlled by, or is under common
control with Purchaser. For purposes of this definition control shall mean the
direct or indirect ownership of at least fifty (50%) percent or, if less than
fifty (50%) percent, the maximum percentage as allowed by applicable law of (a)
the shares of capital stock entitled to vote for the election of directors, or
(b) ownership interest.
"Agent" means any Person authorized to act on behalf of Purchaser with
respect tot he transactions contemplated by this Agreement.
"Collaboration Agreement" means that certain Collaboration Agreement,
dated May 13, 1997 between Regeneron Pharmaceuticals, Inc. and The Procter &
Gamble Company. The Effective Date of the Collaboration Agreement, as that term
is defined therein, shall also be referred to herein as the "Effective Date"
hereof.
"Commission" means the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor Federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"NASD" means the National Association of Securities Dealers, Inc.
"Person"" means an individual, partnership, corporation, limited
liability company, trust or incorporated organization, or other business entity,
or a government or agency or political subdivision thereof.
"Prospectus" means the prospectus included in any Registration
Statement, 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 the Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
"Registrable Securities" means (i) the Common Stock and the Warrant
Shares acquired by the Purchaser pursuant to the Securities Purchase Agreement
(ii) any other shares of Common Stock of the Company issued in respect of such
shares (because of stock splits, stock dividends, reclassifications,
recapitalization, or similar event); provided, however, that shares of Common
Stock which are Registrable Securities shall cease to be Registrable Securities
upon any sale of such shares pursuant to a Registration Statement, Section 4(1)
of the Securities Act, or Rule 144 under the Securities Act, or any sale in any
manner to a person or entity which is not entitled to the rights provided by
this Agreement, or when such Registrable Securities shall have been otherwise
transferred, new certificates for them not bearing a legend restricting transfer
under the Securities Act shall have been delivered by the Company and they may
be publicly resold without subsequent registration under the Securities Act or
in compliance with Rule 144 thereunder; provided, further, however, that any
securities that have ceased to be Registrable Securities cannot thereafter
become Registrable Securities.
"Registration" means a registration of the Company's securities for
sale to the public under a Registration Statement.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of securities of the
Company (other than a registration statement on Form S-8 or Form S-4, or their
successor forms, or any other form for a limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"Registration Expenses" means the expenses described in subsection
2.3.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Underwritten Registration or Underwritten Offering" means a
Registration in which the securities of the Company are sold to an underwriter
for reoffering to the public.
"Warrant Shares" means any shares of Common Stock issued or issuable
upon exercise of any of the Warrants.
2. SECURITIES SUBJECT TO THIS AGREEMENT.
2.1 Registrable Securities. The securities entitled to the benefits of
this Agreement are the Registrable Securities. The rights of the holders of the
Registrable Securities may be limited by rights of other holders of the
Company's securities who entered into agreements with the Company before the
effective date of this Agreement including, without limitation, the rights
obtained by Amgen Inc. in a certain Registration Rights Agreement dated April
15, 1996 with the Company.
2.2 Holders of Registrable Securities. A Person is deemed to a holder
of Registrable Securities whenever such Person owns Registrable Securities or
has the right to acquire such Registrable Securities, whether or not such
ownership or right was acquired pursuant to the Securities Purchase Agreement or
the Warrant Agreement, and whether or not such acquisition has actually been
effected and disregarding any legal restrictions upon the exercise of such
right.
2.3 Sale or Transfer of Company's Common Stock; Legend.
(a) The Registrable Securities shall not be sold or transferred unless
either (i) they first shall have been registered under the Securities Act, or
(ii) the Company first shall have been furnished with an opinion of legal
counsel, reasonably satisfactory to the Company, to the effect that such sale or
transfer is exempt from the registration requirements of the Securities Act.
(b) Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for a transfer made in accordance with Rule 144 under
the Securities Act.
(c) Each certificate representing the Registrable Securities shall
bear a legend substantially in the following form:
The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not be
offered, sold, or otherwise transferred, pledged, or hypothecated
unless and until such shares are registered under such Act or an
opinion of counsel reasonably satisfactory to the Company is obtained
to the effect that such registration is not required. Additionally, the
transfer of these shares is subject to the conditions specified in the
Registration Rights Agreement dated as of May 13, 1997, between
Regeneron Pharmaceuticals, Inc. and The Procter & Company, and no
transfer of these shares shall be valid or effective until such
conditions have been fulfilled. Upon the fulfillment of such
conditions, Regeneron Pharmaceuticals, Inc., has agreed to deliver to
the holder hereof a new certificate for the shares represented hereby
registered in the name of the holder hereof. Copies of such agreement
may be obtained at no cost by written request made by the holder of
record of this certificate to the secretary of Regeneron
Pharmaceuticals, Inc.
The foregoing legend shall be removed from the certificates
representing any Registrable Securities, at the request of the holder thereof,
at such time as such shares become eligible for resale pursuant to Rule 144(k)
under the Securities Act or such shares become publicly tradable pursuant to an
effective Registration Statement.
3. DEMAND REGISTRATIONS.
3.1 Demand by Holders. The holders of a majority of Registrable
Securities, at any time from and after the third anniversary of the Effective
Date, may make a total of two written requests to the Company for Registration
of Registrable Securities under and in accordance with the provisions of the
Securities Act of all or part of the Registrable Securities. Any such
Registration requested shall hereinafter be referred to as a "Demand
Registration." Each request for a Demand Registration shall specify the kind and
aggregate amount of Registrable Securities to be registered and the intended
methods of disposition thereof. Upon such request for a Demand Registration, the
Company shall use its best efforts to promptly effect the Registration of such
Registrable Securities under (i) the Securities Act, and (ii) subject to Section
6, the blue sky laws of such jurisdictions as any holder of such Registrable
Securities requesting such Registration or any underwriter, if any, may
reasonably request. The Company shall also use its best efforts to have all such
Registrable Securities registered with or approved by such other federal or
state governmental agencies or authorities as may be necessary in the opinion of
counsel to the Company and counsel to the holders of a majority of such
Registrable Securities to consummate the disposition of such Registrable
Securities.
Notwithstanding the foregoing, the Company shall not be obligated to
effect a Demand Registration if all (but not less than all) of the shares
requested to be registered could immediately be sold by such holders under Rule
144 under the Securities Act at a price substantially equivalent to the
prevailing market price. The final determination of whether all of the shares
could immediately be sold under Rule 144 shall be made in good faith by counsel
for holders of the Registrable Securities after, among other things, considering
the possible affiliate status of any such holder. The Company shall have the
burden of establishing that the shares could immediately be sold at a price
substantially equivalent to the prevailing market price. Any request for a
Demand Registration not effected pursuant to the provisions of this paragraph
shall not count against the two requests specified in the preceding paragraph.
3.2 Effective Registration. Subject to the last paragraph of Section
6, the Company shall be deemed to have effected a Demand Registration if the
Registration Statement relating to such Demand Registration is declared
effective by the SEC and remains effective for at least 90 days; provided,
however, that no Demand Registration shall be deemed to have been effected if
(i) such registration, after it has become effective, is interfered with by any
stop order, injunction or other order or requirement of the SEC or other
governmental agency or court for any reason not attributable to the selling
holders of Registrable Securities, or (ii) the conditions to closing specified
in the purchase agreement or underwriting agreement entered into in connection
with such registration are not satisfied, other than by reason of a failure on
the part of the selling holders of Registrable Securities or any underwriter
referred to in Section 3.4.
3.3 Registration Statement Form. Registrations under this Section 3
shall be on such appropriate registration form of the SEC as shall permit the
disposition of such Registrable Securities in accordance with the intended
method or methods of disposition specified in such holders' requests for such
Registration. If, in connection with any Registration under this Section 3 which
is proposed by the Company to be on Form S-3 or any successor form to such Form,
the managing underwriter (if any) or holders of a majority of the Registrable
Securities requesting a Demand Registration shall advise the Company in writing
that in its opinion additional disclosure not required by such form is of
material importance to the success of the offering, then such Registration shall
include such additional disclosure.
3.4 Selection of Underwriters. If at any time or from time to time
during the time period applicable to Demand Registrations any of the holders of
the Registrable Securities covered by a Registration Statement desire to sell
Registrable Securities in an Underwritten Offering, the investment banker or
investment bankers that will manage the offering will be selected as follows:
(a) Managing Underwriter. A majority of the holders of Registrable
Securities shall select three (or, if such holder(s) desires, more than three)
nationally recognized investment banking firms as candidates for the offering,
each of which is ready, willing and able to act as the managing underwriter, and
shall provide a list of such candidates to the Company. Not later than five
business days following the receipt of such list, the Company shall: (i) choose
one of three candidates to act as the managing underwriter for the offering and
(ii) notify the holders of a majority of Registrable Securities of such choice.
(b) Co-Managers. The investment banking firm(s), if any, that will
serve as co-manager(s) of the offering will be selected by holders of a majority
of Registrable Securities.
3.5 Registration of Other Securities. Whenever the Company shall
effect a Registration pursuant to this Section 3 in connection with an
Underwritten Offering by one or more holders of Registrable Securities, no
securities other than Registrable Securities shall be included among the
securities covered by such Registration if the managing underwriter of such
offering shall have advised each selling holder of Registrable Securities to be
covered by such Registration in writing (with a copy to the Company) that, in
its opinion, the number of securities requested to be included in such
Registration exceeds the number which can be sold in such offering within a
price range acceptable to the selling holders of a majority of the Registrable
Securities requested to be included in such Registration. If no such notice or
letter is provided, the Company may include shares of Common Stock for its own
account or for the account of other shareholders of the Company having the right
to include such shares in a Registration Statement filed by the Company with the
SEC.
3.6 Priority Among Holders of Registrable Securities in Requested
Registration. If the managing underwriter of an Underwritten Offering pursuant
to this Section 3 advises each of the holders of Registrable Securities in
writing (with a copy to the Company) that less than all of the Registrable
Securities proposed to be included in such offering should be included (using
the same standard described in subsection 3.5 hereof), then the amount of
Registrable Securities to be offered for the accounts of holders of Registrable
Securities shall be reduced pro rata, based on the number of Registrable
Securities owned by such holders.
3.6 Delay of Requested Registration. Notwithstanding anything to the
contrary contained in this Section 3, if following a request for a Demand
Registration the Company provides prompt written notification to all holders of
Registrable Securities specifying the nature of any Delay Event described below,
then the filing of the Registration Statement pursuant to the request for Demand
Registration may be delayed by the Company for a period not to exceed six months
from the date of its receipt of the written request for the Demand Registration
or such shorter period provided below; provided, however, that such right to
delay a request may be exercised by the Company not more than once in any two
year period. A "Delay Event" shall be defined as any of the following: (1) the
Company will file within 60 days following its receipt of the written request
for Demand Registration, a Registration Statement for the public offering of
securities for the account of the Company; (2) if the Securities Act or the
rules or regulations thereunder, or the form on which the Registration Statement
for the Demand Registration is to be filed, requires the filing of financial
statements which are not yet available (in which case, the Company shall prepare
or cause such statements to be prepared in a reasonably timely and diligent
manner and promptly thereafter file the Registration Statement); (3) at the time
of the request for Demand Registration, the Company is engaged in a material
transaction or has an undisclosed material corporate development, and in either
case, which would be required to be disclosed under the federal securities laws
in the Registration Statement, but the Company's Board of Directors has made a
good faith determination that making such disclosure at such time would
materially adversely affect such transaction or development (in which case, the
Company shall disclose the matter as promptly as practicable and promptly
thereafter file the Registration Statement); or (4) at the time of the request
of the Demand Registration, the Company is engaged in any financing (except the
type described in clause (1) above) (in which case the Company shall file the
Registration Statement no later than 30 days following its receipt of the
written request for Demand Registration).
4. PIGGYBACK REGISTRATIONS.
4.1 Participation. Subject to Section 4.2 hereof, if at any time from
and after the third anniversary of the Effective Date, the Company proposes to
file a Registration Statement under the Securities Act with respect to any
offering of any of its shares of Common Stock, whether or not by the Company for
its own account (other than (i) a registration on Form S-4 (or otherwise in
connection with non-cash offerings, exchange offers, mergers or
recapitalizations) or S-8 or any successor form to such Forms, or (ii) any
registration of securities as it relates to an offering and sale to directors or
employees of, or non-employee service providers to, the Company under bona fide
benefits plans adopted by the Board of Directors of the Company and approved by
the holders of Common Stock when required by law), then, as promptly as
practicable, the Company shall give written notice of such proposed filing to
each holder of Registrable Securities and such notice shall offer the holders of
Registrable Securities the opportunity to register such number of Registrable
Securities as each such holder may request (a "Piggyback Registration"). Subject
to Section 4.2, the Company shall include in such Registration Statement all
Registrable Securities requested within 15 days after the receipt of any such
notice (which request shall specify the Registrable Securities intended to be
disposed of by such holder) to be included in the Registration for such offering
pursuant to a Piggyback Registration. Notwithstanding the foregoing, the Company
shall not be obligated to include in a Piggyback Registration the shares of
Registrable Securities requested to be included by a holder of Registrable
Securities if: (i) all (but not less than all) of the shares requested to be
included by that holder could immediately be sold by that holder under Rule 144
under the Securities Act at a price substantially equivalent to the prevailing
market price and (ii) the Company provides to that holder a written waiver and
consent allowing such holder to sell or otherwise dispose of all of such shares
requested to be included without limitation to the restrictions imposed by
Section 5.1 hereof. The final determination of whether all of the shares could
immediately be sold under Rule 144 shall be made in good faith by counsel for
such holder after, among other things, considering the possible affiliate status
of such holder. The Company shall have the burden of establishing that the
shares could immediately be sold at a price substantially equivalent to the
prevailing market price. Each holder of Registrable Securities shall be
permitted to withdraw all or part of such holder's Registrable Securities from a
Piggyback Registration at any time prior to the effective date thereof.
4.2 Underwriter's Cutback. The Company shall use its best efforts to
cause the managing underwriter or underwriters of a proposed Underwritten
Offering to permit the Registrable Securities requested to be included in the
Registration for such offering under Section 4.1 (the "Piggyback Securities"),
to be included on the same terms and conditions as any similar securities
included therein. Notwithstanding the foregoing, if the managing underwriter of
any such proposed Underwritten Offering informs the Company and the holders of
such Piggyback Securities in writing that, in its opinion, the number of shares
of Common Stock (including the Piggyback Securities) requested to be included in
such Registration exceeds the number which can be sold in such offering within a
price range acceptable to the party who has requested the filing of the
Registration Statement (the Company or other holders of the Company's Common
Stock, as the case may be, hereafter referred to as the "Requesting Party"),
then the shares of Common Stock to be included in such Registration shall be the
number that can be sold within a price range acceptable to the Requesting Party,
selected (i) first, from the shares of Common Stock originally proposed by the
Requesting Party to be included in the Registration for such offering, (ii)
second, and only if all the shares of Common Stock referenced in clause (i) have
been included, from shares of Common Stock subject to piggyback registration
rights originally proposed to be included by all holders of shares of Common
Stock (other than the Requesting Party), selected pro rata based upon the total
ownership of such shares of Common Stock subject to piggyback registration
rights of such holders, and (iii) third, and only if all of the shares of Common
Stock referenced in clause (ii) have been included, from any other securities
eligible for inclusion in such Registration.
4.3 No Effect on Demand Registrations. No Registration of Registrable
Securities effected pursuant to a request under this Section 4 shall be deemed
to have been effected pursuant to Section 3 hereof or shall relieve the Company
of its obligation to effect any Registration upon request under Section 3
hereof.
5. HOLD-BACK AGREEMENTS.
5.1 Restrictions Applicable to Company Registration.
(a) Restrictions Applicable to Holders of Registrable Securities. Each
holder of Registrable Securities, if requested by the Company and, in the case
of an Underwritten Offering, the managing underwriters, shall agree not to sell,
transfer or otherwise dispose of any Registrable Securities or other equity
securities (or any securities convertible, exchangeable or exercisable for such
equity securities) of the Company beneficially owned by it (except, in either
case, those that are included in a Piggyback Registration) for a specified
period of time (the "Holdback Period") in the event that the Company notifies
such holder that it desires to file a Registration Statement (the "Company
Registration Statement") to register the sale of shares of Common Stock (or any
securities convertible, exchangeable or exercisable for such Common Stock)
(other than a Registration referred to in clause (i) or (ii) of Section 4.1. The
Holdback Period shall commence on the date the Company Registration Statement is
declared effective by the SEC and shall terminate 120 days thereafter. A written
agreement (the "Lock Up") memorializing each such holder's agreement to the
foregoing restrictions shall be executed in a form reasonably satisfactory to
the Company and, if applicable, the managing underwriters.
(b) Restrictions Applicable to Officers, Directors and Other
Stockholders. As a condition to each holder's delivery of the Lock Up pursuant
to Section 5.1., the Company shall use its best efforts to obtain from each of
its: (i) officers, (ii) directors and (iii) shareholders beneficially owning at
least as many shares of Common Stock as the aggregate number of shares
beneficially owned by the holders of Registrable Securities, a written agreement
substantially similar to the Lock Up pursuant to which each such Person shall
agree not to sell, transfer or otherwise dispose of any equity securities (or
any securities convertible, exchangeable or exercisable for such equity
securities) of the Company beneficially owned by it under the same terms as the
Lock Up (excluding shares that are included in a Piggyback Registration);
provided however, that each of the officers and directors may sell, transfer or
dispose of during the Holdback Period the amount of equity securities of the
Company that each would be permitted to sell under Rule 144 during a 90 day
period commencing on the effective date of the Company Registration Statement.
5.2 Restrictions Applicable to Demand Registration. The following
restrictions on the sale, transfer or other disposition of the Company's equity
securities (or any securities convertible, exchangeable or exercisable for such
equity securities) by the Company, its officers and directors, certain other
shareholders and holders of Registrable Securities shall apply in the event of a
Demand Registration:
(a) Registration Restrictions Applicable to the Company. The Company,
if requested by the holders of a majority of Registrable Securities and, in the
case of an Underwritten Offering, the managing underwriters, shall agree not to
effect any public sale or distribution of its equity securities (or any
securities convertible, exchangeable, or exercisable for such equity securities)
(except those that may be included in a Piggyback Registration) or any private
offer, sale or distribution of its equity securities (or any securities
convertible, exchangeable or exercisable for such equity securities) that may be
integrated under the federal securities laws or the regulations thereunder with
a Demand Registration, for the Demand Registration Holdback Period in the event
of a Demand Registration. The "Demand Registration Holdback Period" shall be
defined as the period commencing on the date that the Registration Statement for
the Demand Registration is declared effective by the SEC and shall terminate 120
days thereafter. A written agreement memorializing the Company's agreement to
the foregoing restrictions shall be executed in a form reasonably satisfactory
to the holders of a majority of Registrable Securities and, if applicable, the
managing underwriters.
(b) Restrictions Applicable to Officers and Directors. The Company, if
requested by the holders of a majority of Registrable Securities and, in the
case of an Underwritten Offering, the managing underwriters, shall cause Dr.
Leonard Schleifer (so long as he remains the Chief Executive Officer of the
Company), and shall use its best efforts to cause each of its other officers and
directors, to agree not to sell, transfer or otherwise dispose of any equity
securities (or any securities convertible, exchangeable, or exercisable for such
equity securities) of the Company beneficially owned by each such Person (except
those that may be included in a Piggyback Registration) during the Demand
Registration Holdback Period in the event of a Demand Registration; provided,
however, that all such officers and directors in the aggregate may sell,
transfer or otherwise dispose of an aggregate of up to five percent of the total
number of shares included in the Demand Registration. A written agreement
memorializing each such Person's agreement to the foregoing restrictions shall
be executed in a form reasonably satisfactory to the holders of a majority of
Registrable Securities and, if applicable, the managing underwriters.
(c) Restrictions Applicable to Other Stockholders. The Company, if
requested by the holders of a majority of Registrable Securities and, in the
case of an Underwritten Offering, the managing underwriters, shall cause each
holder of its privately placed equity securities (or any securities convertible,
exchangeable, or exercisable for such equity securities) issued by the Company
at any time on or after the date of this Agreement to agree (for the benefit of
the holders of Registrable Securities) not to effect any public sale or
distribution of any such securities during the Demand Registration Holdback
Period in the event of a Demand Registration. In addition, the Company shall use
its best efforts to cause each such other shareholder of the Company
beneficially owning at least five percent of the Company's then outstanding
equity securities (or any securities convertible, exchangeable, or exercisable
for such equity securities) to agree not to effect any public sale or
distribution of equity securities (or any securities convertible, exchangeable,
or exercisable for such equity securities) of the Company during the Demand
Registration Holdback Period in the event of a Demand Registration. A written
agreement memorializing each such Person's agreement to the foregoing
restrictions shall be executed in a form reasonably satisfactory to the holders
of a majority of Registrable Securities and, if applicable, the managing
underwriters.
(c) Restrictions Applicable to the Holders of Registrable Securities.
The holders of the Registrable Securities shall not sell, transfer or otherwise
dispose of any equity securities (or any securities convertible, exchangeable or
exercisable for such equity securities) of the Company beneficially owned by
them during a Demand Registration Holdback Period in the event of any Demand
Registration, except for those securities included in the Demand Registration.
6. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions of this Agreement to use its best efforts to effect the
registration of any of the Registrable Securities under the Securities Act, the
Company shall:
(a) file with the Commission a Registration Statement with respect to
such Registrable Securities and use reasonable efforts to cause the Registration
Statement to become and remain effective;
(b) prepare and file with the Commission any amendments and
supplements to the Registration Statement and the prospectus included in the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act and keep the Registration Statement effective for a period of not
less than one hundred twenty (120) days from the effective date;
(c) furnish to the Purchaser such reasonable numbers of copies of the
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as the Purchaser
may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities owned by the Purchaser.
If the Company has delivered preliminary or final prospectuses to the
Purchaser and after having done so the prospectus is amended to comply with the
requirements of the Securities Act, the Company shall promptly notify the
Purchaser and, if requested, the Purchaser shall immediately cease making offers
of Registrable Securities and return all prospectuses to the Company. The
Company shall promptly provide the Purchaser with revised prospectuses and,
following receipt of the revised prospectuses, the Purchaser shall be free to
resume making offers of the Registrable Securities;
(d) use its best efforts to register or qualify the Registrable
Securities covered by the Registration Statement under securities or Blue Sky
laws of such states as the Purchaser shall reasonably request, and do any and
all other acts and things that may be necessary or desirable to enable the
Purchaser to consummate the public sale or other disposition in such states of
the Registrable Securities owned by the Purchaser; provided, however, that the
Company shall not be required in connection with this paragraph (d) to qualify
as a foreign corporation or execute a general consent to service of process in
any jurisdiction, nor shall it be required to comply with any Blue Sky or other
laws, rules or regulations of any jurisdiction for which compliance or other
requirements are, in the reasonable judgment of the Company, unduly burdensome
or would require any material adjustments in any terms of the offering or in the
offering documents; and
(e) In the event of an underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. The Purchaser shall also
enter into and perform its obligations under such agreement.
(f) Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Company of
the happening of the existence of any fact which results in the Registration
Statement, the Prospectus or any documents incorporated therein by reference
containing an untrue statement of material fact or omitting to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, such holder will forthwith discontinue disposition of
Registrable Securities until such holder's receipt of the copies of such
supplemented or amended Prospectus as corrects such misstatement or omission, or
until it is advised in writing by the Company that the use of the Prospectus may
be resumed, and has received copies of any additional or supplemental filings
which are incorporated by reference in the Prospectus, and, if so directed by
the Company, such holder will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such holder's possession,
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such notice, the
time periods during which such Registration Statement shall be maintained
effective shall be extended by the number of days during the period from and
including the date of the giving of such notice to and including the date when
each seller of Registrable Securities covered by such Registration Statement
either receives the copies of the supplemented or amended prospectus that
corrects such misstatement or omission or is advised in writing by the Company
that the use of the Prospectus may be resumed.
7. ALLOCATION OF EXPENSES. The Company will indemnify and hold the
Purchaser harmless for the payment of all Registration Expenses of all
registrations under this Agreement, except as set forth in this Agreement. The
term Registration Expenses shall mean all expenses incurred by the Company in
complying with Section 3 or 4, including, without limitation, all registration
and filing fees, exchange listing fees, printing expenses, fee; and
disbursements of counsel for the Company and the Purchaser, state Blue Sky fees
and expenses (except that: the Purchaser shall not cause or request the filing
for Blue Sky approval in any state reasonably refused by the Company), and the
expenses of any special audits incident to or required by any such registration,
but excluding underwriting discounts and selling commissions.
In connection with each Registration Statement required hereunder, the
Company will reimburse the holders of Registrable Securities being registered
pursuant to such Registration Statement for the reasonable fees and
disbursements of not more than one counsel chosen by the holders of a majority
of such Registrable Securities.
Each seller of Registrable Securities shall pay all discounts,
commissions, fees and expenses of the underwriters, selling brokers, dealer
managers, and similar industry professionals relating to the distribution of its
Registrable Securities.
8. INDEMNIFICATION. In the event of any registration of any of the
Registrable Securities under the Securities Act pursuant to this Agreement, the
Company will indemnify and hold harmless the Purchaser, and each of its officers
and directors, and each other person, if any, who controls the Purchaser, within
the meaning of the Securities Act or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which the Purchaser or
controlling person may become subject under the Securities Act, the Exchange
Act, state securities or Blue Sky laws or otherwise, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement under which such Registrable
Securities were registered under the Securities Act, any preliminary prospectus
or final prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arise out of or are based upon the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or arise out
of or are based upon any violation by the Company of the Securities Act in
connection with such registration; and the Company will reimburse the Purchaser,
officer, director, and each such controlling person for any legal or any other
expenses reasonably incurred by the Purchaser, officer, director, or controlling
person in connection with the investigating or defending of any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or omission made
in such Registration Statement, preliminary prospectus or prospectus, or any
such amendment or supplement, in reliance upon and in conformity with
information furnished to the Company, in writing, by or on behalf of the
Purchaser, officer, director, underwriter, or controlling person specifically
for use in the preparation thereof.
In the event of any registration of any of the Registrable Securities
under the Securities Act pursuant to this Agreement, the Purchaser will
indemnify and hold harmless the Company, each of its directors and officers and
each underwriter (if any) and each person, if any, who controls the Company or
any such underwriter within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages, or liabilities, joint or several, to
which the Company, such directors and officers, underwriter or controlling
person may become subject under the Securities Act, Exchange Act, state
securities or Blue Sky laws or otherwise, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement under which such Registrable Securities
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or arise out of or are based
upon any omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, if
the statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company, by or on behalf of the
Purchaser, specifically for use in connection with the preparation of such
Registration Statement, prospectus, amendment, or supplement; provided, however,
that the obligations of the Purchaser hereunder shall be limited to an amount
equal to the proceeds of the Registrable Securities sold as contemplated herein;
provided, further, that, with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus, the
indemnity agreement contained in this Section 8 shall not apply to the extent
that any loss, claim, damage or liability results from the fact that a current
copy of the prospectus was not sent or given to the person asserting any such
loss, claim, damage, or liability at or prior to the written confirmation of the
sale of the Registrable Securities confirmed to such person if it is determined
that it was the responsibility of the Company, any of its directors, officers or
agents to provide such person with a current copy of the prospectus and such
current copy of the prospectus would have cured the defect giving rise to such
loss, claim, damage or liability.
Each party entitled to indemnification under this Section 8 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 8. The Indemnified Party may participate in such
defense at such party's expense provided, however, that the Indemnifying Party
shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party, in
the defense of any such claim or litigation, shall except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party.
If the indemnification provided for in this Section 8 is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party, then
each Indemnifying Party, in lieu of indemnifying such Indemnified Party
thereunder, hereby agrees to contribute to the amount paid or payable by such
Indemnified Party 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. Notwithstanding the foregoing, the amount the Purchaser shall be
obliged to contribute pursuant to this paragraph of Section 8 shall be limited
to an amount equal to the public offering sale price of the shares sold by the
Purchaser.
9. INFORMATION BY HOLDER. The Purchaser shall furnish to the Company
such information regarding the Purchaser and the distribution proposed by the
Purchaser as the Company may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
Section 3 or 4.
No Person may participate in any Underwritten Registration hereunder
unless such Person (a) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements, and
other documents required under the terms of such underwriting arrangements.
10. RULE 144 REQUIREMENTS. The Company agrees to use reasonable
efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to the Purchaser upon request a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company as the Purchaser may reasonably request to avail itself of any
similar rule or regulation of the Commission allowing it to sell all or any
portion of the Registrable Securities without registration.
11. STANDSTILL AGREEMENT.
11.1 Except as hereinafter set forth in subsection 11.2, the Purchaser
agrees, for itself and its Affiliates, whether now or hereafter created or
acquired, and any of the Purchaser's pension plans or employee benefit plan
programs sponsored by the Purchaser for which the Purchaser controls its
investment decisions, that it will not, until the earlier of (x) the termination
of the Collaboration Agreement or (y) twenty (20) years from the date of this
Agreement, without the prior written consent of the Company;
(i) directly or indirectly acquire or own beneficially and/or of
record more than twenty (20%) percent of the Then Outstanding Capital Stock of
the Company (as hereinafter defined). For purposes of this Section 11, the Then
Outstanding Capital Stock of the Company shall be deemed to be the total number
of shares of the Company's issued and outstanding Common Stock and all shares of
Common Stock (a) into which any issued and outstanding shares of preferred stock
and any other securities exchangeable or convertible into Common Stock are
exchangeable or convertible and (b) for which any issued, outstanding, and
exercisable options or warrants to acquire Common Stock are then exercisable, as
well as all capital stock issued as a result of any stock split, stock dividend,
or reclassifications of Common Stock distributable, on a pro rata basis, to all
holders of Common Stock or securities convertible into Common Stock;
(ii) directly or indirectly, solicit proxies or consents or become a
participant in a solicitation (as such terms are defined in Regulation 14A under
the Exchange Act) in opposition to the recommendation of the majority of the
Board of Directors of the Company with respect to any matter, or seek to advise
or influence any person, with respect to the voting of any securities of the
Company or any of its subsidiaries;
(iii) propose or induce any other person to propose, directly or
indirectly, (x) any merger or business combination involving the Company or any
of its subsidiaries, (y) the purchase or sale of any assets of the Company or
any of its subsidiaries or (z) the purchase of any of the voting securities of
the Company, by tender offer or otherwise (except pursuant to the exercise of
rights, warrants, options, or similar securities distributed by the Company to
holders of voting securities generally);
(iv) deposit any voting securities in a voting trust or subject any
voting securities to any arrangement or agreement with respect to the voting of
voting securities; or
(v) advise, assist, or encourage any other person in connection with
any of the foregoing.
11.2 The Purchaser will be relieved of the restrictions set forth in
subsection 11.1 of this Agreement only under the following circumstances and for
the specific transactions as set forth herein below:
(i) if a third party, not an Affiliate of the Purchaser, directly or
indirectly makes a bona fide tender offer or other bona fide offer for more than
twenty (20%) percent but not more than fifty (50%) percent of the Company's Then
Outstanding Capital Stock, and said third party has, in the reasonable opinion
of the Purchaser, the financial resources, ability and intention to carry out
such offer, the Purchaser shall not be prohibited from purchasing or conducting
a tender offer for an amount of shares equal to the amount of shares sought out
be acquired by the third party during the period of its tender offer;
(ii) if a third party, not an Affiliate of the Purchaser, directly or
indirectly makes a bona fide tender offer or other bona fide offer for more than
fifty (50%) percent of the Company's Then Outstanding Capital Stock and said
third party has, in the reasonable opinion of the Purchaser, the financial
resources, ability and intention to carry out such offer, the Purchaser shall
not be prohibited from purchasing or conducting a tender offer for all or less
than all of the Then Outstanding Capital Stock it does not already own during
the period of the third party's tender offer; or
(iii) in the event the Company hereafter issues to a third party more
than seven (7%) percent of its Then Outstanding Capital Stock pursuant to a
negotiated written transaction without requiring such third party to enter into
a standstill agreement with provisions substantially as restrictive as those set
forth in this Section 11, then Purchaser shall be relieved from its obligations
hereunder.
11.3 At the time that the Board of Directors of the Company makes a
decision to put the Company up for sale and to entertain bids in connection with
such sale, the Company shall promptly notify the Purchaser of such decision and
in the event that the Company is entertaining a merger proposal or acquisition
proposal which would result in the Company being merged with and into or
acquired by another corporation and such negotiations have reached a state of
finality that the Company believes a public announcement is warranted, the
Company shall forthwith notify the Purchaser of the material terms of such
proposed merger or acquisition which have been agreed upon. Purchaser's rights
under this subsection shall be limited solely to notification. The Company's
obligations under this Section 11 including without limitation this subsection
11.3 shall terminate upon the termination of the Collaboration Agreement.
11.4 The parties hereto acknowledge and agree that the Company would
be irreparably damaged in the event that any of the provisions of this Section
11 are not performed in accordance with their specific terms or are otherwise
breached and that monetary damages are not an adequate remedy for said breach.
It is, accordingly, agreed that the Company shall be entitled to injunctive
relief to prevent breaches of this Section 11 by Purchaser and/or its
Affiliates, and to specifically enforce this Section 11 and the terms and
provisions thereof, in addition to any other remedy to which such aggrieved
party may be entitled, at law or in equity. The Company may enter a stop
transfer order with respect to the transfer of voting securities except in
compliance with the termination of this Agreement.
11.5 The Company shall give Purchaser prompt notice of the receipt by
the Company of any Schedule 13-D filing from any person or Group (within the
meaning of the Exchange Act) couched in such terms as to put the Company
reasonably on notice of the likelihood that such person or Group has acquired or
is proposing to acquire any shares of Common Stock which results in, or, if
successful, would result in, such person or Group owning or having the right to
acquire more than twenty percent (20%) of the Company's Then Outstanding Capital
Stock.
11.6 If Purchaser desires at some date to account for its investment
in the Company pursuant to the equity method, the Company shall promptly furnish
the Purchaser, at Purchaser's sole expense, which estimated expense shall be
prepaid by Purchaser if so requested by the Company, all information that is
required by generally accepted accounting principles to enable Purchaser to so
account. To the extent reasonably available to the Company and to the extent
reasonably requested by Purchaser, the Company shall provide information (and
shall cause its employees, independent public accountants, and other
representatives to do the same), to the extent reasonably available regarding
the Company's to, and otherwise cooperate with, Purchaser so as to enable
Purchaser to prepare financial statements in accordance with accounting
principles generally accepted in the United States and to comply with its
reporting requirements and other disclosure obligations under applicable United
States securities laws and regulations (the "Regulations"). Purchaser agrees to
hold all such information in at least the same degree of confidence as it would
hold similar information regarding its operations and condition, and to disclose
it only to the extent required by the Regulations, provided that there shall be
no restriction on Purchaser's right to disclose its own financial statements,
whether or not reflecting or including such information.
11.7 All purchases of securities of the Company by Purchaser shall be
made in compliance with applicable laws and regulations.
11.8 During the term of the Collaboration Agreement, Purchaser agrees,
for itself and its Affiliates, whether now or hereafter created or acquired, and
any of the Purchaser's pension plans or employee benefit plan programs sponsored
by the Purchaser for which the Purchaser controls its investment decisions, that
it will not, directly or indirectly, by action or inaction, use its voting power
(by itself or in concert with others) to cause any Key Man of the Company (as
that term is used in the Collaboration Agreement) to leave the Company,
including, without limitation, voting against the election or reelection of any
Key Man to serve as a member of the Board of Directors of the Company.
12. AMENDMENTS AND WAIVERS. This Agreement may be amended, modified,
supplemented or waived only with the written consent of the parties hereto.
13. NOTICES. Except as otherwise provided in this Agreement, all
notices, requests and other communications to any Person provided for hereunder
shall be in writing and shall be given to (a) in the case of the Company, at 777
Old Saw Mill River Road, Tarrytown, New York 10591, attention: President, with a
copy to the attention of General Counsel and Corporate Secretary or (b) in the
case of the Purchaser, at One Procter & Gamble Plaza, Cincinnati, Ohio 45202,
attention: President, with a copy to the attention of General Counsel. Each such
notice, request or other communication shall be effective (i) if given by mail,
72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (ii) if given by any other means
(including, without limitation, by air courier), when delivered at the address
specified above.
14. SUCCESSORS AND ASSIGNS. The provisions of this Agreement,
including the rights and obligations hereunder, shall be binding upon, and inure
to the benefit of, the respective successors and assigns of the Purchaser (the
Transferees) and of the Company, provided that such Transferees shall be an
Affiliate of the Purchaser, and such Transferees shall become the Purchaser for
the all purposes of this Agreement.
15. TRANSFER OF CERTAIN RIGHTS.
15.1 The rights and obligations of the Purchaser under this Agreement
may be transferred by the Purchaser to any Affiliate of the Purchaser. The
Company shall be given written notice by the Purchaser at the time of such
transfer stating the name and address of the Transferee and identifying the
securities with respect to which such rights are assigned.
15.2 Any Transferee to whom rights are transferred shall, as a
condition to such transfer, deliver to the Company a written instrument pursuant
to which the Transferee agrees to be bound by the obligations imposed upon the
Purchaser hereunder to the same extent as if such Transferee were the Purchaser
hereunder.
16. DESCRIPTIVE HEADINGS. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAWS.
18. COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
19. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the Company and the Purchaser relating to the subject
matter hereof and supersedes all prior agreements and understandings relating to
such subject matter.
20. SEVERABILITY. If any provision of this Agreement, or the
application of such provisions to any Person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to Persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
REGENERON PHARMACEUTICALS, INC.
/S/LEONARD S. SCHLEIFER
By-------------------------------
THE PROCTER & GAMBLE COMPANY
/S/G. GILBERT CLOYD
By-------------------------------
EXHIBIT (99.4)
REGENERON PHARMACEUTICALS, INC.
SECURITIES PURCHASE AGREEMENT
This Agreement is made as of May 13, 1997, by and between Regeneron
Pharmaceuticals, Inc., a corporation organized under the laws of New York (the
"Company"), with its principal office at 777 Old Saw Mill River Road, Tarrytown,
New York 10591, and The Procter & Gamble Company, a corporation organized under
the laws of Ohio (the "Buyer"), with its principal office at One Procter &
Gamble Plaza, Cincinnati, Ohio 45202.
ARTICLE 1
DEFINITIONS
1.1 CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective meanings:
"Additional Securities" means equity securities that the Company sells
to Buyer pursuant to Section 3.2(iii).
"Affiliate" means any corporation, company, partnership, joint
venture, or other entity which controls, is controlled by, or is under common
control with Buyer. For purposes of this definition control shall mean the
direct or indirect ownership of at least fifty (50%) percent or, if less than
fifty (50%) percent, the maximum percentage as allowed by applicable law of (a)
the shares of capital stock entitled to vote for the election of directors, or
(b) ownership interest.
"Buyer's Equity Limitations" means the limitations that in no event
(a) may Buyer purchase or own more than 20% of the Outstanding Securities or
possess more than 20% of the voting rights of the shares of the Company and, in
addition, (b) during the Optional Period may the Buyer be required to purchase
Securities or Additional Securities under this Agreement having a Value in the
aggregate that exceeds 20% of the Company's cumulative research funding
obligations during Fiscal Years 6 through 10 pursuant to the Collaboration
Agreement.
"Closing" means the closings of the sale and purchase of Securities
and Additional Securities issued and sold to Buyer in accordance with the terms
of this Agreement. The first such Closing to be held on the Effective Date shall
be called "Closing I." Closings other than Closing I conducted during the
Initial Period shall be called "Future Closings." Closings conducted during the
Optional Period shall be called "Optional Closings." All Closings, including
Closing I, Future Closings, and any Optional Closings, may be generally referred
to herein as Closings.
"Collaboration Agreement" means that certain Collaboration Agreement,
dated May 13, 1997 between Regeneron Pharmaceuticals, Inc. and The Procter &
Gamble Company. The Effective Date of the Collaboration Agreement will be
referred to herein as the "Effective Date" and references to "Fiscal Year" shall
have the same meaning herein as in the Collaboration Agreement.
"Collateral Agreements" means the Collaboration Agreement, together
with the Warrant Agreement between the parties dated as of May 13, 1997 (the
"Warrant Agreement") and the Registration Rights Agreement between the parties
dated as of May 13, 1997 (the "Registration Rights Agreement").
"Commission" means the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act.
"Common Stock" means the Common Stock, par value $.001 per share, of
the Company.
"Current Market Price" means the average (rounded to the nearest cent)
of the Quoted Price of the Common Stock for the 30 consecutive trading days
commencing 45 trading days before (and not including) the date in question.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor Federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"Exercise Price" means the price for which one share of Common Stock
may be purchased by the exercise of one Warrant. The Exercise Price in respect
of Warrants issued as part of a sale of Securities sold in Future Closings shall
equal the Purchase Price of the Common Stock sold to the Buyer together with the
Warrants in such sale of Securities in accordance with Section 3.2(ii). The
Exercise Price in respect of Securities sold in Optional Closings shall be
determined in accordance with Appendix A.
"Initial Period" means the period beginning on the Effective Date and
ending on the fifth anniversary of the Effective Date.
"Initial Securities" means Securities and Additional Securities
purchased by Buyer pursuant to this Agreement at Closing I or any Future Closing
during the Initial Period having a Value in the aggregate of $60 million.
"Optional Period" means the period beginning on the fifth anniversary
of the Effective Date and ending on the tenth anniversary of the Effective Date.
"Optional Securities" means Securities or Additional Securities
purchased by Buyer pursuant to this Agreement at an Optional Closing during the
Optional Period.
"Outstanding Securities" means the total number of shares of the
Company's issued and outstanding Common Stock and all shares of Common Stock (a)
into which any issued and outstanding shares of preferred stock and any other
securities exchangeable or convertible into Common Stock are exchangeable or
convertible and (b) for which any issued, outstanding, and exercisable options
or warrants to acquire Common Stock are then exercisable (all such calculations
to include such Securities or Additional Securities to be issued at any Closing
with respect to which Outstanding Securities is being calculated).
"Purchase Price" means the price per share of Common Stock sold to
Buyer as part of a sale of Securities under this Agreement and as set forth in
Section 3.2(iv).
"Quoted Price" means the last reported sales price (rounded to the
nearest cent) of the Common Stock as reported by the Nasdaq Stock Market, or if
the Common Stock is listed on a national securities exchange, the last reported
sales price of the Common Stock on such exchange (which shall be for
consolidated trading if applicable to such exchange), or if neither so reported
or listed, the last reported bid price of the Common Stock. In the absence of
one or more such quotations, the Board of Directors of the Company shall
determine the Current Market Price on the basis of such quotation as it in good
faith determines appropriate.
"Securities" means the shares of Common Stock and Warrants issued and
sold to Buyer at Closing I and at Future Closings and Optional Closings, in
accordance with the terms and conditions of this Agreement. At such Closings,
the Company will issue and sell a number of Warrants (rounded to the nearest
whole Warrant) equal to the number of shares of Common Stock purchased by Buyer
times one-third. Securities shall not include Additional Securities.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Value" means, in respect of Securities or Additional Securities sold
to Buyer at a Closing, the total cash consideration paid by Buyer for such sale.
"Warrants" means the Common Stock Purchase Warrants issued pursuant to
the Warrant Agreement to Buyer in connection with the issuance and sale of
Securities under this Agreement. Each Warrant purchased by Buyer will entitle
Buyer to acquire one share of Common Stock at any time during the five years
subsequent to such purchase at the Exercise Price.
ARTICLE II
ISSUANCE AND SALE OF SECURITIES
2.1 ISSUANCE AND SALE OF SECURITIES. Upon the terms set forth herein,
during the Initial Period the Company will issue and sell to Buyer, and Buyer
will purchase from the Company, for an aggregate purchase price of up to $60
million payable in immediately available funds and in separate Closings as
provided in Section 3.1, Securities or Additional Securities or both. During the
Optional Period, at the Company's option, Buyer agrees to purchase from the
Company Optional Securities in accordance with the terms set forth below. After
the Collaboration Agreement expires or terminates, Buyer shall not be required
to purchase further Securities or Additional Securities pursuant to this
Agreement.
ARTICLE III
CLOSINGS
3.1 CLOSING. The closing of the sale and purchase of the Initial
Securities shall take place in separate closings: (i) Closing I, at 4:00 p.m.
New York time on the Effective Date simultaneously at the offices of the Company
and Buyer or at such other time and place as the parties may agree, and (ii)
Future Closings, subject to the conditions set forth in Section 3.4, on such
dates and times specified by the Company upon not less than 45 trading days'
written notice to the Buyer at the offices of the Company or at such other time
and place as the parties may agree.
The Optional Closings of the sale and purchase of any Optional
Securities purchased under this Agreement shall take place in separate closings,
on such dates and times specified by the Company during the Optional Period,
subject to the conditions set forth in Sections 3.4 and 3.5, upon not less than
45 trading days' written notice by the Company to the Buyer or as such other
time and place as the parties may agree.
3.2 PURCHASE OF SECURITIES.
(i) On the date of Closing I, subject to the satisfaction (or waiver)
of the conditions set forth in Articles VI and VII, the Company shall issue and
sell to Buyer and Buyer shall purchase from the Company 4,350,000 shares of
Common Stock, and Buyer shall also receive 1,450,000 Warrants, for an aggregate
purchase price of $42,934,500. Each Warrant will entitle Buyer to purchase one
share of Common Stock at any time during the five years subsequent to Closing I
at an Exercise Price of $9.87 per share, in accordance with the Warrant
Agreement.
(ii) During the Initial Period, if (x) the aggregate Value of
Securities and Additional Securities purchased by Buyer pursuant to this
Agreement is less than $60 million and (y) Buyer has not exceeded Buyer's Equity
Limitations, the Company may issue and sell to Buyer, and Buyer shall purchase
from the Company, Securities or Additional Securities to be determined by the
Company with a Value up to the difference between $60 million and the aggregate
Value of Securities or Additional Securities purchased in prior Closings,
subject to satisfaction (or waiver) of the conditions set forth in Section 3.4
and Articles VI and VII.
(iii) Subject to the Buyer's Equity Limitations, at any time after
Closing I until the end of the Optional Period that the Company issues and sells
Common Stock or other securities convertible or exchangeable into Common Stock
through an underwritten public offering, within 60 days of the closing of such
public offering, the Company may at its sole discretion notify Buyer that the
Company will issue and sell to Buyer, and Buyer will purchase, the same
securities offered and sold in the underwritten public offering on the same
terms and conditions as other purchasers of the underwritten securities in lieu
of Securities that otherwise could be issued and sold to Buyer under this
Agreement; provided, however, that Buyer shall in no case be required to
purchase Additional Securities equal to more than 25% of the securities sold to
other purchasers of such securities pursuant to the registration statement filed
with respect to the offering of the underwritten securities.
(iv) The Purchase Price of Common Stock issued as part of a sale of
Securities during the Initial Period shall be 122% of the Current Market Price.
The Purchase Price of Common Stock issued as part of a sale of Securities during
the Optional Period shall be the same as the Exercise Price of the Warrant
issued as part of the sale of Securities.
3.3 DOCUMENTS TO BE DELIVERED. At any Closing, the Company shall
deliver to Buyer a certificate for the Securities being purchased by the Buyer
hereunder dated the date thereof and registered in the name of Buyer, and the
Buyer shall pay the purchase price for the Securities being purchased by the
Buyer hereunder on such date by wire transfer to the Company of immediately
available funds, in accordance with the Company's written wiring instructions,
against delivery of duly executed certificates representing the Securities being
purchased by the Buyer hereunder and the Company shall deliver such certificates
against delivery of such purchase price.
3.4 MINIMUM PURCHASE REQUIRED FOR FUTURE AND OPTIONAL CLOSINGS;
LIMITATION. During the Initial Period, at any time until Buyer has purchased
Securities or Additional Securities having a Value of $58 million, and
throughout the Optional Period, Buyer will not be required to purchase and the
Company will not be required to issue Securities or Additional Securities or
otherwise conduct a Closing unless such Closing would result in Buyer purchasing
at least 200,000 shares of Common Stock (or Additional Securities convertible
into at least 200,000 shares of Common Stock) or paying at least $2 million in
the aggregate for the purchase of Securities or Additional Securities at such
Closing. In no event will Buyer be required to purchase Securities or Additional
Securities under this Agreement more frequently than once in any calendar
quarter.
3.5 PURCHASE OF OPTIONAL SECURITIES. The Company and Buyer hereby
agree that during the Optional Period, upon not less than 45 trading days'
written notice ("Put Notice"), the Company may issue and sell to Buyer, and
Buyer shall purchase from the Company, such amount of Optional Securities to be
determined by the Company, subject to Buyer's Equity Limitations and the
limitations set forth in Section 3.4 and in the Collateral Agreements (if any).
The Company may, but shall not be required to, give a Put Notice at any time
during the Optional Period, subject to the limitations contained in this
Agreement. The Put Notice shall specify the date, time, and place of the
Optional Closing and any other information that the Company deems relevant.
3.6 LOCK UP. Buyer agrees that during the period beginning Closing I
and ending on the third anniversary of such date (the "Lock-Up Period"), Buyer
will not in any way sell or transfer any Securities or Additional Securities
purchased by Buyer (except to a wholly-owned subsidiary or affiliate of Buyer,
which shall agree to be bound by the provisions of this Agreement and the
Collateral Agreements insofar as they apply hereto), provided, however, Buyer
may sell or transfer such Securities or Additional Securities solely for the
purpose of reducing Buyer's ownership to no more than 20% of the Outstanding
Securities or 20% of the votes represented by the Company's securities.
3.7 FURTHER AGREEMENTS REGARDING BUYER'S EQUITY LIMITATIONS.
(i) During the term of this Agreement, Buyer hereby agrees that Buyer
and its affiliates, including any of its pension plans or employee benefit
plans, shall not purchase Common Stock or other equities of the Company
convertible or exercisable into Common Stock other than pursuant to the terms
and conditions of this Agreement. In addition, Buyer agrees that for itself and
its affiliates, including any of its pension plans or employee benefit plans,
that it will not, during the term of this Agreement or the Collateral Agreements
(whichever is later), without the prior written consent of the Company, directly
or indirectly, acquire or own beneficially and/or of record securities of the
Company in excess of the Buyer's Equity Limitations.
(ii) In the event Buyer directly or indirectly owns beneficially
and/or of record securities of the Company in excess of the Buyer's Equity
Limitations (as a result of no intentional act or fault of Buyer to exceed its
Equity Limitations) and Buyer is in full compliance with the terms and
conditions of this Agreement and the Collateral Agreements, subject to the
limitations set forth in the next succeeding paragraph, then the Company shall
purchase from the Buyer such number of shares of Common Stock and/or Warrants
and/or or Additional Securities so that as a result of such purchase by the
Company, the Buyer shall not own securities of the Company in excess of the
Buyer's Equity Limitations. The Company shall have the sole discretion regarding
the nature and amount of Warrants, Common Stock, or Additional Securities it
purchases under this Section, provided, however, that the Company will purchase
unregistered Common Stock before purchasing registered securities. The purchase
price of any shares of Common Stock or other security convertible or exchangable
into Common Stock purchased by the Company pursuant to this Section 3.7(ii)
shall equal or be determined in the same manner as the then Current Market Price
and the purchase price of any Warrants purchased by the Company from the Buyer
pursuant to this Section 3.7(ii) shall equal the value of the Warrants
determined in accordance with the Black-Scholes model of warrant pricing as set
forth in Appendix A.
(iii) The Company shall not be required to purchase any shares of
Common Stock and/or Warrants and/or Additional Securities pursuant to Section
3.7(ii) in the event that Buyer owns securities of the Company in excess of
Buyer's Equity Limitations as a result of the Company purchasing or retiring
shares of its outstanding capital stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Buyer as of the
Effective Date, as of the date of any future closings with respect to Sections
4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9 (for the period since the most
recent Company SEC report), and 4.10 (except as disclosed in the Company SEC
Reports), and 4.11 (except as disclosed in the Company SEC Reports), and as of
the date of any applicable Optional Closing as follows:
4.1 ORGANIZATION AND STANDING. The Company has been duly incorporated
and is validly existing and in good standing under the laws of the State of New
York with the corporate power and corporate authority to own and lease its
property, to conduct its business as conducted by it in the manner described in
the Company SEC Reports (as defined) and to execute and deliver this Agreement
and each of the Collateral Agreements. The Company has corporate power and
authority to perform and to carry out the transactions contemplated by this
Agreement and each of the Collateral Agreements. The Company is qualified to do
business and is in good standing in the State of New York.
4.2 CAPITALIZATION. As of April 30, 1997, the authorized capital stock
of the Company consisted of the following: (a) 60,000,000 shares of Common
Stock, of which (i) 20,855,186 shares were issued and outstanding, (ii)
4,335,824 shares were reserved for future issuance upon conversion of the Class
A Common Stock, each share of the Class A Common Stock being convertible into
one share of Company Common Stock, (iii) 3,328,165 shares were reserved for
future issuance under the Company's 1990 Amended and Restated Long-Term
Incentive Plan, and (iv) 807,400 shares were reserved for future issuance in
accordance with certain warrants issued to Amgen Inc. and Medtronic, Inc.; (b)
40,000,000 shares of Class A Common Stock, of which 4,335,824 were issued and
outstanding; and (c) 30,000,000 shares of Preferred Stock, (i) none of which
were issued and outstanding, and (ii) 100,000 shares of which are reserved for
issuance as Series A Junior Participating Preferred Stock in accordance with the
Rights Agreement dated as of September 20, 1996. Except as set forth in the
Company SEC Reports, no material change in such capitalization has occurred
between April 30, 1997 and the date hereof. All of the issued and outstanding
shares of Common Stock, Class A Common Stock, and Preferred Stock have been duly
authorized, and all of the issued and outstanding shares of the Common Stock and
the Class A Common Stock are validly issued and are fully paid and
non-assessable. Except as set forth in the Company SEC Reports or as provided in
this Agreement, there is not, nor upon the consummation of the transactions
contemplated herein, will there be (i) any subscription, warrant, option,
convertible security, or any other right (contingent or otherwise) to purchase
or acquire any shares of the capital stock of the Company, (ii) any commitment
of the Company to issue any subscription, warrant, option, convertible security,
or other such right or to issue or distribute to holders of any share of its
capital stock any evidence of indebtedness or assets of the Company, or (iii)
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. Except as
set forth in the Company SEC Reports or as provided in this Agreement, no person
is entitled to, nor upon the consummation of the transactions contemplated
thereby will any person be entitled to (i) any preemptive or similar right with
respect to the issuance of any capital stock of the Company, or (ii) any rights
with respect to the registration of any capital stock of the Company under the
Securities Act.
4.3 ISSUANCE OF SECURITIES. As of the time of Closing I, the issuance,
sale, and delivery of up to $60 million of Securities under this Agreement have
been duly authorized and the Securities have been reserved for issuance by all
necessary corporate action on the part of the Company (no consent or approval of
the shareholders of the Company being required by law, by the Restated
Certificate of Incorporation or Bylaws of the Company, or the qualification
criteria of the Nasdaq National Market), and the Securities, when so issued,
sold, and delivered against payment therefor in accordance with the provisions
of this Agreement, will be duly and validly issued, fully paid, and
non-assessable and not subject to preemptive or any other similar rights of the
shareholders of the Company or others and free, at time of issuance, of all
restrictions on transfer subject to restrictions on transfer imposed by
applicable federal and state securities laws.
4.4 AUTHORITY FOR AGREEMENT. The execution, delivery, and performance
by the Company of this Agreement and each of the Collateral Agreements have been
duly authorized by all necessary corporate action, and this Agreement and each
of the Collateral Agreements have been duly executed and delivered and
constitute valid and binding obligations of the Company enforceable in
accordance with their respective terms, subject to bankruptcy or equitable laws
that might affect the enforceability of this Agreement and each of the
Collateral Agreements. The execution and delivery by the Company of this
Agreement and each of the Collateral Agreements, and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without
limitation, the issuance and sale of the Securities), will not violate any
provision of law and will not conflict with or result in any breach of any of
the terms, conditions or provisions of, or constitute a default under, or result
in the creation of any lien, security interest, charge, or encumbrance upon any
of the properties, assets or outstanding capital stock of the Company, under the
Company's Restated Certificate of Incorporation or Bylaws or any indenture,
lease, agreement, or other instrument to which the Company is a party or by
which it or any of its properties is bound, or any decree, judgment, order,
statute, rule, or regulation applicable to the Company.
4.5 GOVERNMENTAL CONSENTS. No consent, approval, order, or
authorization of, or registration, qualification, designation, declaration, or
filing with, any governmental or regulatory authority is required on the part of
the Company in connection with the execution and delivery of this Agreement and
each of the Collateral Agreements, and the consummation of the transactions
contemplated hereby and thereby (including, without limitation, the offer,
issue, sale, and delivery of the Securities), except such filings as shall have
been made or consents or approvals obtained prior to and which shall be
effective on and as of the Closing.
Based on the representations and warranties made by Buyer in Article V
of this Agreement, the offer and sale of the Shares to Buyer will be in
compliance with applicable federal and state securities laws.
4.6 LITIGATION. Except as set forth in the Company SEC Reports, there
are no material actions, suits, proceedings, or investigations, either at law or
in equity, or before any commission or other administrative authority in any
United States or foreign jurisdiction, of any kind now pending or, to the best
of the Company's knowledge, threatened or proposed involving the Company or any
of its properties or assets or which questions the validity or legality of the
transactions contemplated hereby, or to the Company's actual knowledge, against
its employees or consultants with respect to the Company's business.
4.7 SEC FILINGS; FINANCIAL STATEMENTS.
(a) The Company has filed all forms, reports and documents required to
be filed with the Commission since May 9, 1997 (collectively, the "Company SEC
Reports"). The Company SEC Reports (i) were prepared in all material respects in
accordance with the requirements of the Securities Act or the Exchange Act, as
the case may be, and (ii) did not at the time they were filed (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 the light of the circumstances under which they were
made, not misleading.
(b) Each of the financial statements (including, in each case, any
related notes thereto) contained in the Company SEC Reports was prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
thereto), and each was complete and correct in all material respects and
presented fairly in all material respects presented the financial position of
the Company as at the respective dates thereof and the results of its operations
and cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be material in amount.
4.8 BROKERS. No broker, finder, or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.
4.9 NO UNDISCLOSED LIABILITIES. The Company does not have any material
liabilities (absolute, accrued, contingent, or otherwise) except liabilities in
the aggregate adequately provided for in the Company's unaudited balance sheet
(including any related notes thereto) for the quarter ended March 31, 1997
included in the Company's Quarterly Report on Form 10-Q for the quarter year
ended March 31, 1997 (the "March 31, 1997 Balance Sheet").
4.10 ABSENCE OF CHANGES. Since May 9, 1997, there has been no material
adverse change in the financial condition, business, operations, or assets of
the Company.
4.11 NO DEFAULTS. The Company is not in default (a) under its Restated
Certificate of Incorporation or Bylaws, each as amended or restated to date, or
any indenture, mortgage, lease agreement, contract, purchase order or other
instrument to which it is a party or by which it or any of its property is bound
or affected or in violation of (b) any order, writ, injunction or decree of any
court of any federal, state, municipal, or other governmental department,
commission, board, bureau, agency, or instrumentality, domestic or foreign,
which defaults, either singly or in the aggregate, would have a material adverse
effect on the Company. At the time of the Closing, to the best knowledge of the
Company, there will exist no condition, event, or act which constitutes, or
which after notice, lapse of time or both would constitute, a material default
under any of the foregoing which, either singly or in the aggregate, would have
a material adverse effect on the Company.
4.12 OFFERINGS. Except as contemplated by this Agreement or the
Company's 1990 Amended and Restated Long-Term Incentive Plan or as otherwise
disclosed by the Company to Buyer, the Company does not have any current plans
or intentions to issue any shares of its capital stock or any other securities
or any securities convertible or exchangeable into shares of Common Stock or any
other securities.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER
Buyer hereby represents and warrants to the Company as follows:
5.1 LEGAL POWER. Buyer has the requisite legal power to enter into
this Agreement and the Collateral Agreements, to purchase the Securities and or
Additional Securities hereunder, and to carry out and perform its obligations
under the terms of this Agreement and the Collateral Agreements.
5.2 DUE EXECUTION. This Agreement and the Collateral Agreements have
been duly authorized, executed, and delivered by Buyer, and, upon due execution
and delivery by the Company, this Agreement and the Collateral Agreements will
be valid and binding agreements on Buyer enforceable in accordance with their
respective terms, subject to laws of general application relating to bankruptcy,
insolvency, and the relief of debtors and rules of law governing specific
performance, injunctive relief, or other equitable remedies and compliance with
the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
5.3 INVESTMENT REPRESENTATIONS.
(a) Buyer is acquiring the Securities for its own account, not as
nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act.
(b) Buyer understands that (i) the Securities have not been registered
under the Securities Act by reason of a specific exemption therefrom, that they
must be held by it indefinitely, and that it must, therefore, bear the economic
risk of such investment indefinitely, unless a subsequent disposition thereof is
registered under the Securities Act or is exempt from such registration; and
(ii) each certificate representing the Securities will be endorsed with the
restrictive legend set forth in the Registration Rights Agreement.
(c) Buyer is aware of the provisions of Rule 144 promulgated under the
Securities Act which permits limited resale of shares purchased in a private
placement (i) by non-affiliates of a company not less than two (2) years after
such non-affiliate had purchased and paid for the security to be sold, or (ii)
subject to the satisfaction of certain conditions, including, among other
things, the existence of a public market for the shares, the availability of
certain current public information about the Company, the resale occurring not
less than one (1) year after a party has purchased and paid for the security to
be sold, the sale being through a "broker's transaction" or in transactions
directly with a "market maker" (as provided by Rule 144(f)) and the number of
shares being sold during any three-month period not exceeding specified
limitations.
5.4 BROKERAGE. There are no claims for brokerage commissions, finders
fees, or similar compensation in connection with the transactions contemplated
by this Agreement based on any arrangement or agreement made by or on behalf of
Buyer.
ARTICLE VI
CONDITIONS TO CLOSING OF BUYER
Buyer's obligation to purchase Securities at Closing I and at any
Optional Closing in respect of the purchase and sale of Securities is subject to
the fulfillment to Buyer's satisfaction, at or prior to Closing I, as of the
date of any future closings with respect to Sections 4.1, 4.2, 4.3, 4.4, 4.5,
4.6, 4.7, 4.8, 4.9 (for the period since the most recent Company SEC report),
and 4.10 (except as disclosed in the Company SEC Reports), and 4.11 (except as
disclosed in the Company SEC Reports), and any applicable Optional Closing, of
all of the following conditions, any of which may be waived by Buyer:
6.1 REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF OBLIGATIONS.
The representations and warranties made by the Company in Article IV hereof
shall be true and correct on the date of the Closing with the same force and
effect as if they had been made on and as of said date; and the business,
financial condition, operations, and assets of the Company shall not have been
adversely affected in any material way prior to the Closing.
6.2 COLLATERAL AGREEMENTS. The Company and Buyer shall have entered
into a Collaboration Agreement substantially in the form of Exhibit A hereto, a
Warrant Agreement substantially in the form of Exhibit B hereto, and a
Registration Rights Agreement substantially in the form of Exhibit C hereto.
6.3 OPINION OF THE COMPANY'S COUNSEL. Buyer shall have received from
the General Counsel to the Company, an opinion letter substantially in the form
attached hereto as Exhibit C, addressed to it, dated the date of the Closing. In
rendering the opinion called for under this Section 6.3, counsel may rely as to
factual matters on certificates of public officials, officers of the Company,
and officers of Buyer.
6.4 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions required to be performed under this Agreement
at the Closing and all documents and instruments incident to such transactions
shall have been reasonably approved by Buyer and Buyer shall have received all
such counterpart originals or certified or other copies of such documents as it
may reasonably request.
ARTICLE VII
CONDITIONS TO CLOSING OF THE COMPANY
The Company's obligations to issue and sell the Securities or
Additional Securities at each Closing is subject to the fulfillment to the
Company's satisfaction, on or prior to each Closing, of the following
conditions, any of which may be waived by the Company:
7.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties made by Buyer in Article 4 hereof shall be true and correct on the
date of the Closing, with the same force and effect as if they had been made on
and as of said date.
7.2 PERFORMANCE OF OBLIGATIONS. Buyer shall have performed and
complied with all agreements and conditions herein required to be performed or
complied with by it on or before the Closing.
7.3 QUALIFICATIONS, LEGAL INVESTMENT. All authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required to be obtained prior to or at the
Closing in connection with the lawful sale and issuance of the Securities or
Additional Securities pursuant to this Agreement shall have been duly obtained
and shall be effective on and as of the Closing. At the time of the Closing, the
sale and issuance of the Securities or Additional Securities shall be legally
permitted by all laws and regulations to which Buyer and the Company are
subject.
7.4 COLLATERAL AGREEMENTS. The Company and Buyer shall have entered
into a Collaboration Agreement substantially in the form of Exhibit A hereto, a
Warrant Agreement substantially in the form of Exhibit B hereto, and a
Registration Rights Agreement substantially in the form of Exhibit C hereto.
ARTICLE VIII
MISCELLANEOUS
8.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of New York.
8.2 SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive the Closing for the period prescribed by
the applicable statute of limitations. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder as of the date of such certificate or instrument.
8.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit or, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
8.4 ENTIRE AGREEMENT. This Agreement, the Exhibits hereto, and the
other documents delivered pursuant hereto constitute the full and entire
understanding and agreement along the parties with regard to the subjects hereof
and no party shall be liable or bound to any other party in any manner by any
representations, warranties, covenants or agreements except as specifically set
forth herein or therein. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parities hereto and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
8.5 SEPARABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall to the extent practicable, be
modified so as to make it valid, legal and enforceable and to retain as nearly
as practicable the intent of the parties, and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
8.6 AMENDMENT AND WAIVER. 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, either retroactively or prospectively, and either
for a specified period of time or indefinitely), only with the written consent
of the Company and Buyer.
8.7 DELAYS OR OMISSIONS. No reasonable delay or omission to exercise
any right, power or remedy accruing to Buyer upon any breach, default or
noncompliance of the Company 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 any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character on Buyer's part of
any breach, default or noncompliance under this Agreement or any waiver on
Buyer's part of any provisions or conditions of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in such
writing, and that all remedies, either under this Agreement, by law, or
otherwise afforded to buyer, shall be cumulative and not alternative.
8.8 NOTICES, ETC. Any notices or communications provided for in this
Agreement to be made by either of the Parties to the other shall be in writing,
in English, and shall be made by prepaid air mail with return receipt addressed
to the other at its address set forth below. Any such notice or communication
may also be given by hand or facsimile to the appropriate designation with
confirmation of receipt. Either Party may by like notice specify an address to
which notices and communications shall thereafter be sent. Notices sent by mail
shall be effective upon receipt; notices given by hand shall be effective when
delivered.
Notices for Regeneron shall be sent to:
Regeneron Pharmaceuticals, Inc.
Attn: Corporate Secretary
777 Old Saw Mill River Road
Tarrytown, New York 10591-6707
With copy to:
Regeneron Pharmaceuticals, Inc.
Attn: General Counsel
777 Old Saw Mill River Road
Tarrytown, New York 10591-6707
Notices for Procter & Gamble shall be sent to:
Procter & Gamble Pharmaceuticals, Inc.
Attn: President
One Procter & Gamble Plaza
Cincinnati, Ohio 45202
With copy to:
Procter & Gamble Pharmaceuticals, Inc.
Attn: Associate General Counsel
Blue Ash Office Center
10200 Alliance Road
Cincinnati, Ohio 45242-4716
8.9 TITLES AND SUBTITLES. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
8.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument. The foregoing Agreement is hereby
executed as of the date first above written.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first written above.
REGENERON PHARMACEUTICALS, INC. THE PROCTER & GAMBLE COMPANY
/S/LEONARD S. SCHLEIFER /S/G. GILBERT CLOYD
By:________________________________ By:________________________________
APPENDIX A
For Securities sold during the Optional Period, the Exercise Price of the
Warrant shall be determined such that the excess of the Exercise Price over the
Current Market Price equals one-third of the value of the Warrant, rounded to
the nearest whole cent. The value of the Warrant shall be determined using the
Black-Scholes model with the following values:
TERM OF WARRANT: Five years
STOCK PRICE: Current Market Price
DIVIDEND: The actual cash dividend per share of Common Stock paid by the
Company in the immediately prior twelve months
INTEREST RATE: The interest rate on 5-year Treasury notes as reported in The
Wall Street Journal on the last trading day used to calculate Current Market
Price or, if no such rate is reported for that date, the last day prior to that
date for which such an interest rate is reported. The interest rate shall be the
effective yield on Treasury notes maturing in the same month five years from the
date of calculation or the average of such yields if more than one yield is
reported for that month or the average of the yields for the months closest to
the date of calculation if no yields are reported for that month.
VOLATILITY: The actual volatility of daily closing bid prices of Common Stock
during the three full calendar years immediately preceding the year in which the
Closing in question occurs.
EXAMPLE (for illustration only):
If the Current Market Price of Common Stock is $8.50 and the interest rate
(calculated as above) is 6.75%, and the volatility (calculated as above) is 80%,
then for an Exercise Price of a Warrant of $10.35, the value of a Warrant would
be $5.56 (per Black-Scholes) and (1) the excess of the Exercise Price over the
Current Market Price would be $1.85 [$10.35 - $8.50] and (2) one-third of the
value of the Warrant equals $1.85 [$5.56 / 3].
EXHIBIT (99.5)
REGISTRATION RIGHTS AGREEMENT
between
REGENERON PHARMACEUTICALS, INC.
and PROCTER & GAMBLE PHARMACEUTICALS, INC.
December 11, 1996
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of December 11, 1996, between
Regeneron Pharmaceuticals, Inc., a New York corporation (the "Company"), and
Procter & Gamble Pharmaceuticals, Inc., an Ohio corporation (the "Purchaser").
1. INTRODUCTION. The Company is a party to a Stock Purchase Agreement
(the Stock Purchase Agreement), dated December 11, 1996, with the Purchaser and
pursuant to which the Company has agreed, among other things, to issue shares of
its common stock, par value .001 per share (the Common Stock) to the Purchaser.
This Agreement shall become effective upon the issuance of such securities to
the Purchaser at Closing II pursuant to the Stock Purchase Agreement. Certain
capitalized terms used in this Agreement are defined below; references to
sections shall be to sections of this Agreement. Terms not otherwise defined
herein shall have the meanings assigned to them in the Stock Purchase Agreement.
1.1 "Certain Definitions." As used in this Agreement, the following
terms shall have the following respective meanings:
1.2 "Affiliate" means any corporation, company, partnership, joint
venture, or other entity which controls, is controlled by, or is under common
control with Purchaser. For purposes of this definition control shall mean the
direct or indirect ownership of at least fifty (50%) percent or, if less than
fifty (50%) percent, the maximum percentage as allowed by applicable law of (a)
the shares of capital stock entitled to vote for the election of directors, or
(b) ownership interest.
"Collaboration Agreement" means that certain Collaboration Agreement,
dated December 11, 1996 between Regeneron Pharmaceuticals, Inc. and Procter &
Gamble Pharmaceuticals, Inc.
"Commission" means the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor Federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of securities of the
Company (other than a registration statement on Form S-8 or Form S-4, or their
successor forms, or any other form for a limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"Registration Expenses" means the expenses described in subsection
2.3.
"Registrable Shares" means (i) the shares of Common Stock acquired by
the Purchaser pursuant to the Stock Purchase Agreement (ii) any other shares of
Common Stock of the Company issued in respect of such shares (because of stock
splits, stock dividends, reclassifications, recapitalization, or similar event);
provided, however, that shares of Common Stock which are Registrable Shares
shall cease to be Registrable Shares upon any sale of such shares pursuant to a
Registration Statement, Section 4(1) of the Securities Act, or Rule 144 under
the Securities Act, or any sale in any manner to a person or entity which is not
entitled to the rights provided by this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
1.3 Sale or Transfer of Company's Common Stock; Legend.
(a) The Registrable Shares shall not be sold or transferred unless
either (i) they first shall have been registered under the Securities Act, or
(ii) the Company first shall have been furnished with an opinion of legal
counsel, reasonably satisfactory to the Company, to the effect that such sale or
transfer is exempt from the registration requirements of the Securities Act.
(b) Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for a transfer made in accordance with Rule 144 under
the Securities Act.
(c) Each certificate representing the Registrable Shares shall bear a
legend substantially in the following form:
The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not be
offered, sold, or otherwise transferred, pledged, or hypothecated
unless and until such shares are registered under such Act or an
opinion of counsel reasonably satisfactory to the Company is obtained
to the effect that such registration is not required. Additionally, the
transfer of these shares is subject to the conditions specified in the
Registration Rights Agreement dated as of December 11, 1996, between
Regeneron Pharmaceuticals, Inc. and Procter & Gamble Pharmaceuticals,
Inc., and no transfer of these shares shall be valid or effective until
such conditions have been fulfilled. Upon the fulfillment of such
conditions, Regeneron Pharmaceuticals, Inc., has agreed to deliver to
the holder hereof a new certificate for the shares represented hereby
registered in the name of the holder hereof. Copies of such agreement
may be obtained at no cost by written request made by the holder of
record of this certificate to the secretary of Regeneron
Pharmaceuticals, Inc.
The foregoing legend shall be removed from the certificates
representing any Registrable Shares, at the request of the holder thereof, at
such time as such shares become eligible for resale pursuant to Rule 144(k)
under the Securities Act or such shares become publicly tradable pursuant to an
effective Registration Statement.
2. REGISTRATION UNDER SECURITIES ACT, ETC.
2.1 Incidental Registration.
(a) Whenever the Company proposes to file a Registration Statement
after the termination or expiration of the Collaboration Agreement, at any time
and from time to time, it will, prior to such filing, give written notice to the
Purchaser of its intention to do so and, upon the written request of the
Purchaser given within ten (10) days after the Company provides such notice
(which request shall state the intended method of disposition of such
Registrable Shares), the Company shall use its best efforts to cause all
Registrable Shares which the Company has been requested by the Purchaser to
register to be registered under the Securities Act to the extent necessary to
permit their sale or other disposition in accordance with the intended methods
of distribution specified in the request of the Purchaser; provided that the
Company shall have the right to postpone or withdraw any registration affected
pursuant of this subsection 2.1 without obligation to the Purchaser.
(b) In connection with any offering under this subsection 2.1
involving an underwriting, the Company shall not be required to include any
Registrable Shares in such underwriting unless the Purchaser accepts the terms
of the underwriting as agreed upon between the Company and the underwriters, and
then only in such quantity as will not, in the opinion of the underwriters,
jeopardize the success of the offering by the Company. If in the opinion of the
managing underwriters the registration of all, or part of, the Registrable
Shares which the Purchaser has requested to be included would materially and
adversely affect such public offering then the Company shall be required to
include in the underwriting only that number of Registrable Shares, if any,
which the managing underwriter believes may be sold without causing such adverse
effect. Except as set forth in subsection 2.3, the Company will bear all
Registration Expenses in connection with the Purchaser's registration under this
subsection 2.1.
(c) The Company may refuse to regisster shares eligible for sale under
Rule 144(k), unless good cause for inclusion for such Registrable Shares can be
shown; provided good cause will be deemed to be shown if not all the shares
requested by the Purchaser to be registered could immediately be sold under Rule
144(k) at a price substantially equivalent to the prevailing market price.
2.2 Registration Procedures. If and whenever the Company is required
by the provisions of this Agreement to use its best efforts to effect the
registration of any of the Registrable Shares under the Securities Act, the
Company shall:
(a) file with the Commission a Registration Statement with respect to
such Registrable Shares and use reasonable efforts to cause the Registration
Statement to become and remain effective;
(b) prepare and file with the Commission any amendments and
supplements to the Registration Statement and the prospectus included in the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act and keep the Registration Statement effective for a period of not
less than one hundred twenty (120) days from the effective date;
(c) furnish to the Purchaser such reasonable numbers of copies of the
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as the Purchaser
may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Shares owned by the Purchaser.
If the Company has delivered preliminary or final prospectuses to the
Purchaser and after having done so the prospectus is amended to comply with the
requirements of the Securities Act, the Company shall promptly notify the
Purchaser and, if requested, the Purchaser shall immediately cease making offers
of Registrable Shares and return all prospectuses to the Company. The Company
shall promptly provide the Purchaser with revised prospectuses and, following
receipt of the revised prospectuses, the Purchaser shall be free to resume
making offers of the Registrable Shares;
(d) use its best efforts to register or qualify the Registrable Shares
covered by the Registration Statement under securities or Blue Sky laws of such
states as the Purchaser shall reasonably request, and do any and all other acts
and things that may be necessary or desirable to enable the Purchaser to
consummate the public sale or other disposition in such states of the
Registrable Shares owned by the Purchaser; provided, however, that the Company
shall not be required in connection with this paragraph (d) to qualify as a
foreign corporation or execute a general consent to service of process in any
jurisdiction, nor shall it be required to comply with any Blue Sky or other
laws, rules or regulations of any jurisdiction for which compliance or other
requirements are, in the reasonable judgment of the Company, unduly burdensome
or would require any material adjustments in any terms of the offering or in the
offering documents; and
(e) In the event of an underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. The Purchaser shall also
enter into and perform its obligations under such agreement.
2.3 Allocation of Expenses. The Company will indemnify and hold the
Purchaser harmless for the payment of all Registration Expenses of all
registrations under this Agreement, except as set forth in this Agreement. The
term Registration Expenses shall mean all expenses incurred by the Company in
complying with this Section 2, including, without limitation, all registration
and filing fees, exchange listing fees, printing expenses, fee; and
disbursements of counsel for the Company and the Purchaser, state Blue Sky fees
and expenses (except that: the Purchaser shall not cause or request the filing
for Blue Sky approval in any state reasonably refused by the Company), and the
expenses of any special audits incident to or required by any such registration,
but excluding underwriting discounts and selling commissions.
2.4 Indemnification. In the event of any registration of any of the
Registrable Shares under the Securities Act pursuant to this Agreement, the
Company will indemnify and hold harmless the Purchaser, and each of its officers
and directors, and each other person, if any, who controls the Purchaser, within
the meaning of the Securities Act or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which the Purchaser or
controlling person may become subject under the Securities Act, the Exchange
Act, state securities or Blue Sky laws or otherwise, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement under which such Registrable Shares
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arise out of or are based upon the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or arise out
of or are based upon any violation by the Company of the Securities Act in
connection with such registration; and the Company will reimburse the Purchaser,
officer, director, and each such controlling person for any legal or any other
expenses reasonably incurred by the Purchaser, officer, director, or controlling
person in connection with the investigating or defending of any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or omission made
in such Registration Statement, preliminary prospectus or prospectus, or any
such amendment or supplement, in reliance upon and in conformity with
information furnished to the Company, in writing, by or on behalf of the
Purchaser, officer, director, underwriter, or controlling person specifically
for use in the preparation thereof.
In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, the Purchaser will
indemnify and hold harmless the Company, each of its directors and officers and
each underwriter (if any) and each person, if any, who controls the Company or
any such underwriter within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages, or liabilities, joint or several, to
which the Company, such directors and officers, underwriter or controlling
person may become subject under the Securities Act, Exchange Act, state
securities or Blue Sky laws or otherwise, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement under which such Registrable Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or arise out of or are based
upon any omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, if
the statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company, by or on behalf of the
Purchaser, specifically for use in connection with the preparation of such
Registration Statement, prospectus, amendment, or supplement; provided, however,
that the obligations of the Purchaser hereunder shall be limited to an amount
equal to the proceeds of the Registrable Shares sold as contemplated herein;
provided, further, that, with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus, the
indemnity agreement contained in this subsection 2.4 shall not apply to the
extent that any loss, claim, damage or liability results from the fact that a
current copy of the prospectus was not sent or given to the person asserting any
such loss, claim, damage, or liability at or prior to the written confirmation
of the sale of the Registrable Shares confirmed to such person if it is
determined that it was the responsibility of the Company, any of its directors,
officers or agents to provide such person with a current copy of the prospectus
and such current copy of the prospectus would have cured the defect giving rise
to such loss, claim, damage or liability.
Each party entitled to indemnification under this subsection 2.4 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this subsection 2.4. The Indemnified Party may participate in
such defense at such party's expense provided, however, that the Indemnifying
Party shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party, in
the defense of any such claim or litigation, shall except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party.
If the indemnification provided for in this subsection 2.4 is held by
a court of competent jurisdiction to be unavailable to an Indemnified Party,
then each Indemnifying Party, in lieu of indemnifying such Indemnified Party
thereunder, hereby agrees to contribute to the amount paid or payable by such
Indemnified Party 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. Notwithstanding the foregoing, the amount the Purchaser shall be
obliged to contribute pursuant to this paragraph of subsection 2.4 shall be
limited to an amount equal to the public offering sale price of the shares sold
by the Purchaser.
2.5 Information by Holder. The Purchaser shall furnish to the Company
such information regarding the Purchaser and the distribution proposed by the
Purchaser as the Company may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Section 2.
2.6 "Stand-Off" Agreement. The Purchaser, if requested by the Company
and an underwriter of Common Stock or other securities of the Company, shall
agree not to sell or otherwise transfer or dispose of any Registrable Shares or
other securities of the Company held by the Purchaser for a specified period of
time (not to exceed one hundred and eighty (180) days) following the effective
date of the Registration Statement; provided, that all officers and directors of
the Company enter into similar agreements. Such agreement shall be in writing in
a form satisfactory to the Company and such underwriter. The Company may impose
stop transfer instructions with respect to the Registrable Shares or other
securities subject to the foregoing restrictions until the end of the stand-off
period.
2.7 Rule 144 Requirements. The Company agrees to use reasonable
efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to the Purchaser upon request a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company as the Purchaser may reasonably request to avail itself of any
similar rule or regulation of the Commission allowing it to sell all or any
portion of the Registrable Shares without registration.
3. STANDSTILL AGREEMENT
3.1 Except as hereinafter set forth in subsection 3.2, the Purchaser
agrees, for itself and its Affiliates, whether now or hereafter created or
acquired, and any of the Purchaser's pension plans or employee benefit plan
programs sponsored by the Purchaser for which the Purchaser controls its
investment decisions, that it will not, until the earlier of (x) the termination
of the Collaboration Agreement or (y) five (5) years from the date of this
Agreement, without the prior written consent of the Company;
(i) directly or indirectly acquire or own beneficially and/or of
record more than twenty (20%) percent of the Then Outstanding Capital Stock of
the Company (as hereinafter defined). For purposes of this Section 3, the Then
Outstanding Capital Stock of the Company shall be deemed to be all of the then
issued and outstanding shares of the Common Stock and all shares of Common Stock
into which the then outstanding shares of preferred stock and any other
convertible securities or any options or warrants issued by the Company are
convertible or exercisable, as well as all capital stock issued as a result of
any stock split, stock dividend, or reclassifications of Common Stock
distributable, on a pro rata basis, to all holders of Common Stock or securities
convertible into Capital Stock;
(ii) directly or indirectly, solicit proxies or consents or become a
participant in a solicitation (as such terms are defined in Regulation 14A under
the Exchange Act) in opposition to the recommendation of the majority of the
Board of Directors of the Company with respect to any matter, or seek to advise
or influence any person, with respect to the voting of any securities of the
Company or any of its subsidiaries;
(iii) propose or induce any other person to propose, directly or
indirectly, (x) any merger or business combination involving the Company or any
of its subsidiaries, (y) the purchase or sale of any assets of the Company or
any of its subsidiaries or (z) the purchase of any of the voting securities of
the Company, by tender offer or otherwise (except pursuant to the exercise of
rights, warrants, options, or similar securities distributed by the Company to
holders of voting securities generally);
(iv) deposit any voting securities in a voting trust or subject any
voting securities to any arrangement or agreement with respect to the voting of
voting securities; or
(v) advise, assist, or encourage any other person in connection with
any of the foregoing.
3.2 The Purchaser will be relieved of the restrictions set forth in
subsection 3.1 of this Agreement only under the following circumstances and for
the specific transactions as set forth herein below:
(i) if a third party, not an Affiliate of the Purchaser, directly or
indirectly makes a bona fide tender offer or other bona fide offer for more than
twenty (20%) percent but not more than fifty (50%) percent of the Company's Then
Outstanding Capital Stock, and said third party has, in the reasonable opinion
of the Purchaser, the financial resources, ability and intention to carry out
such offer, the Purchaser shall not be prohibited from purchasing or conducting
a tender offer for an amount of shares equal to the amount of shares sought out
be acquired by the third party during the period of its tender offer;
(ii) if a third party, not an Affiliate of the Purchaser, directly or
indirectly makes a bona fide tender offer or other bona fide offer for more than
fifty (50%) percent of the Company's Then Outstanding Capital Stock and said
third party has, in the reasonable opinion of the Purchaser, the financial
resources, ability and intention to carry out such offer, the Purchaser shall
not be prohibited from purchasing or conducting a tender offer for all or less
than all of the Then Outstanding Capital Stock it does not already own during
the period of the third party's tender offer; or
(iii) in the event the Company hereafter issues to a third party more
than seven (7%) percent of its Then Outstanding Capital Stock pursuant to a
negotiated written transaction without requiring such third party to enter into
a standstill agreement with provisions substantially as restrictive as those set
forth in this Section 3, then Purchaser shall be relieved from its obligations
hereunder.
3.3 At the time that the Board of Directors of the Company makes a
decision to put the Company up for sale and to entertain bids in connection with
such sale, the Company shall promptly notify the Purchaser of such decision and
in the event that the Company is entertaining a merger proposal or acquisition
proposal which would result in the Company being merged with and into or
acquired by another corporation and such negotiations have reached a state of
finality that the Company believes a public announcement is warranted, the
Company shall forthwith notify the Purchaser of the material terms of such
proposed merger or acquisition which have been agreed upon. Purchaser's rights
under this subsection shall be limited solely to notification. The Company's
obligations under this Section 3 including without limitation this subsection
3.3 shall terminate upon the termination of the Collaboration Agreement.
3.4 The parties hereto acknowledge and agree that the Company would be
irreparably damaged in the event that any of the provisions of this Section 3
are not performed in accordance with their specific terms or are otherwise
breached and that monetary damages are not an adequate remedy for said breach.
It is, accordingly, agreed that the Company shall be entitled to injunctive
relief to prevent breaches of this Section 3 by Purchaser and/or its Affiliates,
and to specifically enforce this Section 3 and the terms and provisions thereof,
in addition to any other remedy to which such aggrieved party may be entitled,
at law or in equity. The Company may enter a stop transfer order with respect to
the transfer of voting securities except in compliance with the termination of
this Agreement.
3.5 The Company shall give Purchaser prompt notice of the receipt by
the Company of any Schedule 13-D filing from any person or Group (within the
meaning of the Exchange Act) couched in such terms as to put the Company
reasonably on notice of the likelihood that such person or Group has acquired or
is proposing to acquire any shares of Common Stock which results in, or, if
successful, would result in, such person or Group owning or having the right to
acquire more than twenty percent (20%) of the Company's Then Outstanding Capital
Stock.
3.6 If Purchaser desires at some date to account for its investment in
the Company pursuant to the equity method, the Company shall promptly furnish
the Purchaser, at Purchaser's sole expense, which estimated expense shall be
prepaid by Purchaser if so requested by the Company, all information that is
required by generally accepted accounting principles to enable Purchaser to so
account. To the extent reasonably available to the Company and to the extent
reasonably requested by Purchaser, the Company shall provide information (and
shall cause its employees, independent public accountants, and other
representatives to do the same), to the extent reasonably available regarding
the Company's to, and otherwise cooperate with, Purchaser so as to enable
Purchaser to prepare financial statements in accordance with accounting
principles generally accepted in the United States and to comply with its
reporting requirements and other disclosure obligations under applicable United
States securities laws and regulations (the "Regulations"). Purchaser agrees to
hold all such information in at least the same degree of confidence as it would
hold similar information regarding its operations and condition, and to disclose
it only to the extent required by the Regulations, provided that there shall be
no restriction on Purchaser's right to disclose its own financial statements,
whether or not reflecting or including such information.
3.7 All purchases of securities of the Company by Purchaser shall be
made in compliance with applicable laws and regulations.
4. AMENDMENTS AND WAIVERS. This Agreement may be amended, modified,
supplemented or waived only with the written consent of the parties hereto.
5. NOTICES. Except as otherwise provided in this Agreement, all
notices, requests and other communications to any Person provided for hereunder
shall be in writing and shall be given to (a) in the case of the Company, at 777
Old Saw Mill River Road, Tarrytown, New York 10591, attention: President, with a
copy to the attention of General Counsel and Corporate Secretary or (b) in the
case of the Purchaser, at One Procter & Gamble Plaza, Cincinnati, Ohio 45202,
attention: President, with a copy to the attention of General Counsel. Each such
notice, request or other communication shall be effective (i) if given by mail,
72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (ii) if given by any other means
(including, without limitation, by air courier), when delivered at the address
specified above.
6. SUCCESSORS AND ASSIGNS. The provisions of this Agreement, including
the rights and obligations hereunder, shall be binding upon, and inure to the
benefit of, the respective successors and assigns of the Purchaser (the
Transferees) and of the Company, provided that such Transferees shall be an
Affiliate of the Purchaser, and such Transferees shall become the Purchaser for
the all purposes of this Agreement.
7. TRANSFER OF CERTAIN RIGHTS.
(a) The rights and obligations of the Purchaser under this Agreement
may be transferred by the Purchaser to any Affiliate of the Purchaser. The
Company shall be given written notice by the Purchaser at the time of such
transfer stating the name and address of the Transferee and identifying the
securities with respect to which such rights are assigned.
(b) Any Transferee to whom rights are transferred shall, as a
condition to such transfer, deliver to the Company a written instrument pursuant
to which the Transferee agrees to be bound by the obligations imposed upon the
Purchaser hereunder to the same extent as if such Transferee were the Purchaser
hereunder.
8. DESCRIPTIVE HEADINGS. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
9. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAWS.
10. COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
11. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the Company and the Purchaser relating to the subject
matter hereof and supersedes all prior agreements and understandings relating to
such subject matter.
12. SEVERABILITY. If any provision of this Agreement, or the
application of such provisions to any Person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to Persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
REGENERON PHARMACEUTICALS, INC.
By /S/LEONARD S. SCHLEIFER
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PROCTER & GAMBLE PHARMACEUTICALS, INC.
By /S/ G. GILBERT CLOYD
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G. Gilbert Cloyd
President