Exhibit 10.21
INVESTOR AGREEMENT
By
and Among
SANOFI-AVENTIS,
SANOFI-AVENTIS US LLC,
AVENTIS PHARMACEUTICALS INC.,
SANOFI-AVENTIS AMÉRIQUE DU NORD
AND
REGENERON PHARMACEUTICALS, INC.
Dated as of December 20, 2007
TABLE OF CONTENTS
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1.
DEFINITIONS
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2. REGISTRATION
RIGHTS
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2.1 Required
Registration
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2.2 Underwritten
Required Registration Required; Priority in Underwritten
Offering
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2.3 Priority in
Required Registration
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2.4 Revocation of
Required Registration
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2.5 Effective
Required Registrations
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2.6 Continuous
Effectiveness of Registration Statement
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2.7 Obligations of
the Company
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2.8 Furnish
Information
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2.9 Expenses
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2.10
Indemnification
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2.11 SEC
Reports
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2.12 Assignment of
Registration Rights
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3. RESTRICTIONS ON
BENEFICIAL OWNERSHIP
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3.1
Standstill
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3.2 Amendment to
Aventis Collaboration Agreement
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4. RESTRICTIONS ON
DISPOSITIONS
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4.1 Lock-Up
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4.2 Limitations
Following Lock-Up Term
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4.3 Certain Tender
Offers
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4.4 Offering
Lock-Up
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5. VOTING
AGREEMENT
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5.1 Voting of
Securities
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5.2 Certain
Extraordinary Matters
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5.3 Quorum
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6. TERMINATION OF
CERTAIN RIGHTS AND OBLIGATIONS
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6.1 Termination of
Registration Rights
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6.2 Termination of
Standstill Agreement
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6.3 Termination of
Restrictions on Dispositions
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6.4 Termination of
Voting Agreement
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6.5 Effect of
Termination
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7.
MISCELLANEOUS
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7.1 Governing Law;
Submission to Jurisdiction
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7.2 Waiver
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7.3 Notices
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7.4 Entire
Agreement
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7.5
Amendments
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7.6 Headings;
Nouns and Pronouns; Section References
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7.7
Severability
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7.8
Assignment
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7.9 Successors and
Assigns
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7.10
Counterparts
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7.11 Third Party
Beneficiaries
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7.12 No Strict
Construction
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7.13
Remedies
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7.14 Specific
Performance
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7.15 No
Conflicting Agreements
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| Exhibit A – Form of
Irrevocable Proxy |
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Exhibit B
– Notices
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ii
INVESTOR AGREEMENT
THIS INVESTOR AGREEMENT (this
“ Agreement ”) is made as of December 20,
2007, by and among sanofi-aventis, a company organized under the
laws of France, with its principal headquarters at 174, avenue de
France, 75013 Paris, France (“ sanofi-aventis
”), sanofi-aventis US LLC, a Delaware limited liability
company indirectly wholly owned by sanofi-aventis (“
Sanofi US ”) and the successor-in-interest to Aventis
Pharmaceuticals Inc. (“ Aventis ”) with respect
to the Aventis Collaboration Agreement, with its headquarters at 55
Corporate Drive, Bridgewater, New Jersey 00807, Aventis, a Delaware
corporation and an indirect wholly owned subsidiary of the Investor
with its headquarters at 55 Corporate Drive, Bridgewater, New
Jersey 00807, sanofi-aventis Amérique du Nord, a
société en nom collectif organized under the
laws of France wholly owned by sanofi-aventis with its principal
headquarters at 174, avenue de France, 75013 Paris, France (the
“ Investor ”, and, together with sanofi-aventis,
Sanofi US and Aventis, the “ Purchaser Parties
”), and Regeneron Pharmaceuticals, Inc. (the “
Company ”), a New York corporation with its principal
place of business at 777 Old Saw Mill River Road, Tarrytown, New
York 10591.
WHEREAS, the Stock Purchase
Agreement, dated as of November 28, 2007, by and among the
Investor, sanofi-aventis US and the Company (the “
Purchase Agreement ”) provides for the issuance and
sale by the Company to the Investor, and the purchase by the
Investor, of a number of shares of the Company’s common
stock, par value $0.001 per share (the “ Common Stock
”), equal to the Share Amount (as defined in the Purchase
Agreement) (the “ Purchased Shares ”); and
WHEREAS, as a condition to
consummating the transactions contemplated by the Purchase
Agreement, the Purchaser Parties and the Company have agreed upon
certain rights and restrictions as set forth herein with respect to
the Purchased Shares and other securities of the Company
beneficially owned by the Purchaser Parties and their respective
Affiliates, and it is a condition to the closing under the Purchase
Agreement that this Agreement be executed and delivered by the
Purchaser Parties and the Company.
NOW, THEREFORE, in consideration of
the premises and mutual agreements hereinafter set forth, and for
other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. As used in
this Agreement, the following terms shall have the following
meanings:
(a) “
Acquisition Proposal ” shall have the meaning set
forth in Section 3.1(c).
(b) “
Affiliate ” shall mean, with respect to any Person,
another Person which controls, is controlled by or is under common
control with such Person. A Person shall be deemed to control
another Person if such Person possesses, directly or indirectly,
the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities, by contract or otherwise. Without limiting the
generality of the foregoing, a Person shall be deemed to control
another Person if any of the following conditions is met:
(i) in the case of corporate entities, direct or indirect
ownership of more than fifty percent
(50%) of
the stock or shares having the right to vote for the election of
directors, and (ii) in the case of non-corporate entities, direct
or indirect ownership of more than fifty percent (50%) of the
equity interest with the power to direct the management and
policies of such non-corporate entities. The parties acknowledge
that in the case of certain entities organized under the Laws of
certain countries outside the United States, the maximum percentage
ownership permitted by Law for a foreign investor may be less than
fifty percent (50%), and that in such case such lower percentage
shall be substituted in the preceding sentence, provided that such
foreign investor has the power to direct the management and
policies of such entity. For the purposes of this Agreement, in no
event shall the Investor or any of its Affiliates be deemed
Affiliates of the Company or any of its Affiliates, nor shall the
Company or any of its Affiliates be deemed Affiliates of the
Investor or any of its Affiliates.
(c) “
Agreement ” shall have the meaning set forth in the
Preamble to this Agreement, including all Exhibits attached
hereto.
(d) “
Aventis ” shall have the meaning set forth in the
Preamble to this Agreement.
(e) “
Aventis Collaboration Agreement ” shall mean the
Collaboration Agreement, dated as of September 5, 2003, by and
between Sanofi US and the Company, as amended by the First
Amendment, dated as of December 31, 2004, the Second
Amendment, dated as of January 7, 2005, the Third Amendment,
dated as of December 21, 2005, the Fourth Amendment, dated as
of January 31, 2006, and Section 11.2 of the Purchase
Agreement, as the same may be further amended from time to
time.
(f) “
Aventis Stock Purchase Agreement ” shall mean the
Stock Purchase Agreement, dated as of September 5, 2003, by
and between Aventis and the Company.
(g) “
beneficial owner ,” “ beneficially owns
,” “ beneficial ownership ” and terms of
similar import used in this Agreement shall, with respect to a
Person, have the meaning set forth in Rule 13d-3 under the
Exchange Act (i) assuming the full conversion into, and
exercise and exchange for, shares of Common Stock of all Common
Stock Equivalents beneficially owned by such Person and
(ii) determined without regard for the number of days in which
such Person has the right to acquire such beneficial
ownership.
(h) “
Business Day ” shall mean a day on which commercial
banking institutions in New York, New York are open for
business.
(i) “
Change of Control ” shall mean, with respect to the
Company, any of the following events: (i) any Person is or
becomes the beneficial owner (except that a Person shall be deemed
to have beneficial ownership of all shares that any such Person has
the right to acquire, whether such right which may be exercised
immediately or only after the passage of time), directly or
indirectly, of a majority of the total voting power represented by
all Shares of Then Outstanding Common Stock; (ii) the Company
consolidates with or merges into another corporation or entity, or
any corporation or entity consolidates with or merges into the
Company, other than (A) a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to
represent
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(either
by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof) a
majority of the combined voting power of the voting securities of
the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or
(B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which
no Person becomes the beneficial owner, directly or indirectly, of
a majority of the total voting power of all Shares of Then
Outstanding Common Stock or (iii) the Company conveys,
transfers or leases all or substantially all of its assets to any
Person other than a wholly owned Affiliate of the Company.
(j) “
Class A Stock ” shall mean the Class A
Stock, par value $0.001 per share, of the Company.
(k) “
Closing Date ” shall have the meaning set forth in the
Purchase Agreement.
(l) “
Common Stock ” shall have the meaning set forth in the
Preamble to this Agreement.
(m) “
Common Stock Equivalents ” shall mean any options,
warrants or other securities (including Class A Stock) or
rights convertible into or exercisable or exchangeable for, whether
directly or following conversion into or exercise or exchange for
other options, warrants or other securities or rights, shares of
Common Stock.
(n) “
Company ” shall have the meaning set forth in the
Preamble to this Agreement.
(o) “
Demand Request ” shall have the meaning set forth in
Section 2.1.
(p) “
Disposition ” or “ Dispose of ”
shall mean any (i) offer, pledge, sale, contract to sell, sale
of any option or contract to purchase, purchase of any option or
contract to sell, grant of any option, right or warrant for the
sale of, or other disposition of or transfer of any shares of
Class A Stock or Common Stock, or any Common Stock
Equivalents, including, without limitation, any “short
sale” or similar arrangement, or (ii) swap or any other
agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of
shares of Class A Stock or Common Stock, whether any such swap
or transaction is to be settled by delivery of securities, in cash
or otherwise.
(q) “
Exchange Act ” shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the SEC
promulgated thereunder.
(r) “
Extraordinary Matter ” shall have the meaning set
forth in Section 5.2.
(s) “
Filing Date ” shall mean (i) with respect to any
Registration Statement to be filed on Form S-1 (or any applicable
successor form), ninety (90) days after receipt by the Company
of a Demand Request for such Registration Statement and
(ii) with respect to any Registration Statement to be filed on
Form S-3 (or any applicable successor form), forty-five
(45) days after receipt by the Company of a Demand Request for
such Registration Statement.
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(t) “
Governmental Authority ” shall mean any court, agency,
authority, department, regulatory body or other instrumentality of
any government or country or of any national, federal, state,
provincial, regional, county, city or other political subdivision
of any such government or country or any supranational organization
of which any such country is a member.
(u) “
Holders ” shall mean (but, in each case, only for so
long as such Person remains an Affiliate of sanofi-aventis) the
Investor, Aventis and any Permitted Transferee thereof, if any, in
accordance with Section 2.12.
(v) “
Initiating Holder ” shall have the meaning set forth
in Section 2.2.
(w) “
Interference ” shall have the meaning set forth in
Section 2.5.
(x) “
Investor ” shall have the meaning set forth in the
Preamble to this Agreement.
(y) “
Law ” or “ Laws ” shall mean all
laws, statutes, rules, regulations, orders, judgments, injunctions
and/or ordinances of any Governmental Authority.
(z) “
Lock-Up Term ” shall have the meaning set forth in
Section 4.1.
(aa) “
Modified Clause ” shall have the meaning set forth in
Section 7.7. (bb) “ Offeror ” shall have
the meaning set forth in Section 3.1(c).
(cc) “
Other Holders ” shall mean any Person having rights to
participate in a registration of the Company’s
securities.
(dd) “
Permitted Transferee ” shall mean a controlled
Affiliate of sanofi-aventis that is wholly owned, directly or
indirectly, by sanofi-aventis; it being understood that for
purposes of this definition “wholly owned” shall mean
an Affiliate in which sanofi-aventis owns, directly or indirectly,
at least ninety-nine percent (99%) of the outstanding capital stock
of such Affiliate.
(ee) “
Person ” shall mean any individual, partnership, firm,
corporation, association, trust, unincorporated organization,
government or any department or agency thereof or other entity, as
well as any syndicate or group that would be deemed to be a Person
under Section 13(d)(3) of the Exchange Act.
(ff) “
Prospectus ” shall mean the prospectus forming a part
of any Registration Statement, as supplemented by any and all
prospectus supplements and as amended by any and all amendments
(including post-effective amendments) and including all material
incorporated by reference or explicitly deemed to be incorporated
by reference in such prospectus.
(gg) “
Purchase Agreement ” shall have the meaning set forth
in the Preamble to this Agreement, and shall include all Exhibits
attached thereto.
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(hh)
“ Purchased Shares ” shall have the meaning set
forth in the Preamble to this Agreement, and shall be adjusted for
(i) any stock split, stock dividend, share exchange, merger,
consolidation or similar recapitalization and (ii) any Common
Stock issued as (or issuable upon the exercise of any warrant,
right or other security that is issued as) a dividend or other
distribution with respect to, or in exchange or in replacement of,
the Purchased Shares.
(ii)
“ Purchaser Parties ” shall have the meaning set
forth in the Preamble to this Agreement.
(jj)
“ registers ,” “ registered
,” and “ registration ” refer to a
registration effected by preparing and filing a Registration
Statement or similar document in compliance with the Securities
Act, and the declaration or ordering of effectiveness of such
Registration Statement or document by the SEC.
(kk)
“ Registrable Securities ” shall mean
(i) the Purchased Shares and any shares of Common Stock owned
of record by Aventis as of the date of this Agreement, together
with any shares of Common Stock issued in respect thereof as a
result of any stock split, stock dividend, share exchange, merger,
consolidation or similar recapitalization and (ii) any Common
Stock issued as (or issuable upon the exercise of any warrant,
right or other security that is issued as) a dividend or other
distribution with respect to, or in exchange or in replacement of,
the shares of Common Stock described in clause (i) of this
definition, excluding in all cases, however, (A) any
Registrable Securities if and after they have been transferred to a
Permitted Transferee in a transaction in connection with which
registration rights granted hereunder are not assigned,
(B) any Registrable Securities sold to or through a broker or
dealer or underwriter in a public distribution or a public
securities transaction or (C) Registrable Securities eligible
for resale pursuant to Rule 144(k) under the Securities Act.
(ll)
“ Registration Expenses ” shall mean all
expenses incurred by the Company in connection with any Required
Registration pursuant to Section 2.1 or the Company’s
compliance with Section 2.7 (excluding clauses (m),
(n) and (r) thereof), including, without limitation, all
registration and filing fees, fees and expenses of compliance with
securities or blue sky Laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications
of any Registrable Securities), expenses of printing
(i) certificates for any Registrable Securities in a form
eligible for deposit with the Depository Trust Company or
(ii) Prospectuses if the printing of Prospectuses is requested
by Holders, messenger and delivery expenses, fees and disbursements
of counsel for the Company and its independent certified public
accountants (including the expenses of any management review, cold
comfort letters or any special audits required by or incident to
such performance and compliance), Securities Act liability
insurance (if the Company elects to obtain such insurance), the
reasonable fees and expenses of any special experts retained by the
Company in connection with such registration, fees and expenses of
other Persons retained by the Company and the reasonable fees and
expenses of one (1) counsel for the Holders of Registrable
Securities in each Required Registration, selected by the Holders
of a majority of the Registrable Securities to be included in such
Required Registration. In addition, the Company will pay its
internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees
and expenses incurred in connection with the listing of the
Purchased Shares to be registered on each securities
exchange,
5
if any,
on which equity securities issued by the Company are then listed or
the quotation of such securities on any national securities
exchange on which equity securities issued by the Company are then
quoted.
(mm)
“ Registration Rights Term ” shall have the
meaning set forth in Section 2.1.
(nn)
“ Registration Statement ” shall mean any
registration statement of the Company under the Securities Act that
covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the related Prospectus, all amendments
and supplements to such registration statement (including
post-effective amendments), and all exhibits and all materials
incorporated by reference or explicitly deemed to be incorporated
by reference in such Registration Statement.
(oo)
“ Required Period ” with respect to a Required
Registration shall mean the earlier of (i) the date on which
all Registrable Securities covered by such Required Registration
are sold pursuant thereto and (ii) one-hundred twenty
(120) days following the first day of effectiveness of the
Registration Statement for such Required Registration, in each case
subject to extension as set forth herein; provided ,
however , that in no event will the Required Period expire
prior to the expiration of the applicable period referred to in
Section 4(3) of the Securities Act and Rule 174
promulgated thereunder.
(pp)
“ Required Registration ” shall have the meaning
set forth in Section 2.1.
(qq)
“ Sanofi License and Collaboration Agreement ”
shall mean that certain License and Collaboration Agreement between
the Company, the Investor and Aventis dated as of November 28,
2007, as the same may be amended from time to time.
(rr)
“ sanofi-aventis ” shall have the meaning set
forth in the Preamble to this Agreement.
(ss)
“ Sanofi US ” shall have the meaning set forth
in the Preamble to this Agreement.
(tt)
“ SEC ” shall mean the United States Securities
and Exchange Commission.
(uu)
“ Securities Act ” shall mean the Securities Act
of 1933, as amended, and the rules and regulations of the SEC
promulgated thereunder.
(vv)
“ Selling Expenses ” shall mean all underwriting
discounts and selling commissions applicable to the sale of
Registrable Securities pursuant to this Agreement.
(ww)
“ Shares of Then Outstanding Common Stock ”
shall mean, at any time, the issued and outstanding shares of
Class A Stock and Common Stock at such time, as well as all
capital stock issued and outstanding as a result of any stock
split, stock dividend, or reclassification of Class A Stock or
Common Stock distributable, on a pro rata basis, to all holders of
Class A Stock and Common Stock, as applicable.
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(xx)
“ Standstill Limit ” shall mean (i) from
the Closing Date until the fourth (4 th ) anniversary
of the Closing Date, the lesser of (A) twenty-one percent
(21%) of the Shares of Then Outstanding Common Stock, in the case
of this clause (A) only, calculated on a fully diluted basis
assuming the full conversion into, or exercise or exchange for,
shares of Common Stock of all Common Stock Equivalents outstanding
(as such Common Stock Equivalents outstanding are calculated from
the Company’s most recent Form 10-Q or Form 10-K, as
applicable, filed with the SEC), and (B) twenty-five percent
(25%) of the Shares of Then Outstanding Common Stock, and (ii) from
the fourth (4 th ) anniversary
of the Closing Date until the expiration of the Standstill Term,
thirty percent (30%) of the Shares of Then Outstanding Common
Stock.
(yy)
“ Standstill Parties ” shall have the meaning
set forth in Section 3.1. (zz) “ Standstill Term
” shall have the meaning set forth in Section 3.1.
(aaa)
“ Third Party ” shall mean any Person other than
the Purchaser Parties, the Company or any of their respective
Affiliates.
(bbb)
“ Underwritten Registration ” or “
Underwritten Offering ” shall mean a registration in
which Registrable Securities are sold to an underwriter for
reoffering to the public.
(ccc)
“ Violation ” shall have the meaning set forth
in Section 2.10(a).
2.
Registration Rights.
2.1 Required Registration.
If, at any time after the expiration of the Lock-Up Term but no
later than the tenth (10 th ) anniversary
of such expiration (the “ Registration Rights Term
”), the Company receives from any Holder or Holders a written
request or requests (each, a “ Demand Request ”)
that the Company file a Registration Statement under the Securities
Act to effect the registration (a “ Required
Registration ”) of Registrable Securities, the Company
shall use all reasonable efforts to file a Registration Statement
covering such Holders’ Registrable Securities as soon as
practicable (and by the applicable Filing Date) and shall use all
reasonable efforts to, as soon as practicable thereafter, effect
the registration of the Registrable Securities to permit or
facilitate the sale and distribution in an Underwritten Offering of
all or such portion of such Holder’s or Holders’
Registrable Securities as are specified in such Demand Request,
subject however, to the conditions and limitations set forth
herein; provided , however , that the Company shall
not be obligated to effect any registration of Registrable
Securities upon receipt of a Demand Request pursuant to this
Section 2.1 if:
(i) the
Company has already completed three (3) Required
Registrations;
(ii)
(A) in the event that the market value of all Registrable
Securities outstanding is equal to or greater than $50,000,000, the
market value of the Registrable Securities proposed to be included
in the registration, based on the average closing price during the
ten (10) consecutive trading days period prior to the making
of the Demand Request, is less than $50,000,000 or (B) in the
event that the market value of all Registrable Securities
outstanding is less than
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$50,000,000,
(i) less than all such Registrable Securities are proposed to
be included in the registration, or (ii) the market value of
all such Registrable Securities is less than $25,000,000;
(iii)
the Company shall furnish to the Holders a certificate signed by an
authorized officer of the Company stating that (A) within
ninety (90) days of receipt of the Demand Request under this
Section 2.1, the Company shall file a registration statement
for the public offering of securities for the account of the
Company (other than a registration of securities (x) issuable
pursuant to an employee stock option, stock purchase or similar
plan, (y) issuable pursuant to a merger, exchange offer or a
transaction of the type specified in Rule 145(a) under the
Securities Act or (z) in which the only securities being
registered are securities issuable upon conversion of debt
securities which are also being registered), or (B) the
Company is engaged in a material transaction or has an undisclosed
material corporate development, in either case, which would be
required to be disclosed in the Registration Statement, and in the
good faith judgment of the Company’s Board of Directors, such
disclosure would be seriously detrimental to the Company and its
stockholders at such time (in which case, the Company shall
disclose the matter as promptly as reasonably practicable and
thereafter file the Registration Statement, and each Holder agrees
not to disclose any information about such material transaction to
Third Parties until such disclosure has occurred or such
information has entered the public domain other than through breach
of this provision by such Holder), provided , however
, that the Company shall have the right to only defer the filing of
the Registration Statement pursuant to this subsection once in any
twelve (12) month period and, such deferral may not exceed a
period of more than one-hundred twenty (120) days after
receipt of a Demand Request;
(iv)
the Company has, within the twelve (12) month period preceding
the date of the Demand Request, already effected one
(1) Required Registration for any Holder pursuant to this
Section 2.1; or
(v) at
any time during the period between the Company’s receipt of
the Demand Request and the completion of the Required Registration,
any Holder is in breach of or has failed to cause its Affiliates to
comply with the obligations and restrictions of Sections 3, 4
or 5 of this Agreement, and such breach or failure is ongoing and
has not been remedied; it being understood that (A) a
one-time, inadvertent and de minimis breach of Section 4 shall
not be deemed to be a breach of the obligations and restrictions
under Section 4 for purposes of this Section 2.1(v) and
(B) a de minimis breach of Section 3.1(a) hereof, or an
inadvertent breach of Section 3.1(g) hereof arising from
informal discussions covering general corporate or other business
matters the purpose of which is not intended to effectuate or lead
to any of the actions referred to in paragraphs (a) through
(e) of Section 3.1, shall not be deemed to be a breach of
the obligations and restrictions under Section 3.1 for purposes of
this Section 2.1(v).
8
2.2 Underwritten Required
Registration Required; Priority in Underwritten Offering. The
underwriter for any Underwritten Offering requested pursuant to
Section 2.1 shall be selected by a majority in interest of the
Holders initiating the Required Registration hereunder (such
Holder(s) initiating the registration request, the “
Initiating Holders ”) and shall be acceptable to the
Company. The right of any Holder to include its Registrable
Securities in the Underwritten Offering shall be conditioned upon
such Holder’s participation in such Underwritten Offering and
the inclusion of such Holder’s Registrable Securities to the
extent provided herein. All Holders requesting the inclusion of
their Registrable Securities in such Underwritten Offering shall
(together with the Company as provided in Section 2.7(h))
enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such Underwritten
Offering. Notwithstanding any other provision of this
Section 2, if the managing underwriter for the Underwritten
Offering determines in good faith that marketing factors require a
limitation of the number of shares of Registrable Securities to be
included in such Underwritten Offering, then the Company shall so
advise all Holders which requested inclusion of their Registrable
Securities in such Underwritten Offering, and the number of shares
of Registrable Securities that may be included in such Underwritten
Offering shall be allocated among the Holders in proportion (as
nearly as practicable) to the amount of Registrable Securities of
the Company owned by each Holder; provided , however
, that the number of shares of Registrable Securities to be
included in such Underwritten Offering shall not be reduced unless
all other securities are first entirely excluded from such
Underwritten Offering. In the event the Company advises the Holders
of its intent to decrease the total number of Registrable
Securities that may be included by the Holders in such Required
Registration such that the number of Registrable Securities
included in such Required Registration would be less than
seventy-five percent (75%) of all Registrable Securities which the
Holders requested be included in such Required Registration, then
Holders representing a majority of the Registrable Securities
requested to be included in such Required Registration will have
the right to withdraw, on behalf of all Holders of all Registrable
Securities requested to be so included, such Required Registration,
in which case, such Required Registration will not count as a
Required Registration for the purposes of Section 2.1(i), and
the Company shall bear all Registration Expenses in connection
therewith; provided , that , the right to withdraw a
registration and have it not count as a Required Registration may
only be exercised once by the Holders (taken collectively).
2.3 Priority in Required
Registration. With respect to any Required Registration of
Registrable Securities requested pursuant to Section 2.1, the
Company may also (i) propose to sell shares of Common Stock on
its own behalf and (ii) provide written notice of such
Required Registration to Other Holders and permit all such Other
Holders who request to be included in the Required Registration to
include any or all Company securities held by such Other Holders in
such Required Registration on the same terms and conditions as the
Registrable Securities. Notwithstanding the foregoing, if the
managing underwriter or underwriters of the Underwritten Offering
to which any Required Registration relates advise the Company and
the Holders of Registrable Securities that, in its good faith
determination, the total amount of securities that such Holders,
Other Holders, and the Company intend to include in such Required
Registration is in an amount in the aggregate which would adversely
affect the success of such Underwritten Offering, then such
Required Registration shall include (i) first, all Registrable
Securities of the Holders allocated, if the amount is less than all
the Registrable Securities requested to be sold, pro rata on
the basis of the total number of Registrable Securities held by
such Holders; and (ii) second, as many other securities
proposed to be included in the Required Registration by the
9
Company
and any Other Holders, allocated pro rata among the Company
and such Other Holders, on the basis of the amount of securities
requested to be included therein by the Company and each such Other
Holder so that the total amount of securities to be included in
such Underwritten Offering is the full amount that, in the written
opinion of such managing underwriter, can be sold without
materially and adversely affecting the success of such Underwritten
Offering.
2.4 Revocation of Required
Registration. With respect to one (1) Required
Registration only, the Holders of at least a majority of the
Registrable Securities to be included in a Registration Statement
with respect to such Required Registration may, at any time prior
to the effective date of such Registration Statement, on behalf of
all Holders of all Registrable Securities requested to be included
therein, revoke the request to have Registrable Securities included
therein and revoke the request for such Required Registration by
providing a written notice to the Company, in which case such
Required Registration that has been revoked will be deemed not to
have been effected and will not count as a Required Registration
for purposes of Section 2.1(i) if, and only if, the Holders of
Registrable Securities which had requested inclusion of Registrable
Securities in such Required Registration promptly reimburse the
Company for all Registration Expenses incurred by the Company in
connection with such Required Registration. Notwithstanding the
foregoing sentence, the parties agree and acknowledge that the
Holders may revoke any Required Registration (without any
obligation to reimburse the Company for Registration Expenses
incurred in connection therewith) if such revocation is based on
(i) a material adverse change in circumstances with respect to
the Company and its subsidiaries, taken as a whole, caused by an
act or failure to act by the Company or any of its subsidiaries and
not known to any Holder at the time the Required Registration was
first made or (ii) the Company’s failure to comply in
any material respect with its obligations hereunder, and any such
revocation based on an event described in (i) or
(ii) above shall be exercisable at any time and shall not be
counted as the one (1) revocation of a Required Registration
permitted by the first sentence of this Section 2.4.
2.5 Effective Required
Registrations. A Required Registration will not be deemed to be
effected for purposes of Section 2.1(i) if the Registration
Statement for such Required Registration has not been declared
effective by the SEC or become effective in accordance with the
Securities Act and the rules and regulations thereunder and kept
effective for the Required Period. In addition, if after such
Registration Statement has been declared or becomes effective,
(i) the offering of Registrable Securities pursuant to such
Registration Statement is interfered with by any stop order,
injunction, or other order or requirement of the SEC or other
governmental agency or court such that the continued offer and sale
of Registrable Securities being offered pursuant to such
Registration Statement would violate applicable Law and such stop
order, injunction or other order or requirement of the SEC or other
governmental agency or court does not result from any act or
omission of any Holder whose Registrable Securities are registered
pursuant to such Registration Statement (an “
Interference ”) and (ii) any such Interference is
not cured within sixty (60) days thereof, such Required
Registration will be deemed not to have been effected and will not
count as a Required Registration. In the event such Interference
occurs and is cured, the Required Period relating to such
Registration Statement will be extended by the number of days of
such Interference, including the date such Interference is
cured.
10
2.6 Continuous Effectiveness of
Registration Statement. The Company will use all reasonable
efforts to cause each Registration Statement filed pursuant to this
Section 2 to be declared effective by the SEC or to become
effective under the Securities Act as promptly as practicable and
to keep each such Registration Statement that has been declared or
becomes effective continuously effective for the Required
Period.
2.7 Obligations of the
Company. Whenever required under Section 2.1 to effect the
registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) prepare
and file with the SEC a Registration Statement with respect to such
Registrable Securities sought to be included therein; provided that
at least five (5) Business Days prior to filing any R
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