INVESTOR RIGHTS AGREEMENT
This
REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
June
20, 2005, by and between Clinical Data,
Inc., a Delaware corporation (the
"Company"), and RAM Trading, Ltd., a Cayman
Islands exempted company (the
"Preferred Stockholder").
WHEREAS, the
Preferred Stockholder will be acquiring that number of shares
of Series A Preferred Stock, $0.01 par
value per share (the "Series A Preferred
Stock"), of the Company provided for in
Exhibit C to the Agreement and Plan of
Merger dated as of June 20, 2005, by and
among the Company, Safari Acquisition
Corp., and Genaissance Pharmaceuticals,
Inc., a Delaware corporation (the
"Merger Agreement");
WHEREAS, the
Company has agreed to enter into this Agreement to provide the
Preferred Stockholder with certain
registration rights, as well as certain other
rights and remedies set forth in this
Agreement with respect to the shares of
Series A Preferred Stock to be acquired by
the Preferred Stockholder in the
Merger Agreement; and
WHEREAS, the
closing and consummation of the transactions contemplated by
the Merger Agreement is conditioned upon
this Agreement being executed by the
parties hereto simultaneously with the
execution of the Merger Agreement, to
become effective upon the closing and
consummation of the transactions
contemplated by the Merger Agreement.
NOW, THEREFORE,
in consideration of the foregoing and the mutual covenants
and agreements contained herein, and for
other good and valuable consideration,
the receipt and sufficiency of which are
hereby acknowledged, the parties hereto
hereby agree as follows:
1.
DEFINITIONS.
1.1 Unless otherwise stated herein, capitalized terms used but
not
defined herein shall have the meanings set
forth in the Merger Agreement.
1.2 Unless otherwise provided in this Agreement, capitalized
terms
used herein shall have the following
meanings:
"Advice" has the
meaning specified in Section 3.
"Agreement" has
the meaning set forth in the first paragraph hereof.
"Closing Date"
shall mean the closing and consummation of the transactions
contemplated by the Merger Agreement.
"Common Stock"
means the Common Stock, par value $0.01 per share, of the
Company.
"Company" has
the meaning set forth in the first paragraph hereof.
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"Exchange Act"
shall mean the Securities Exchange Act of 1934, or any
successor federal statute, and the rules
and regulations of the SEC thereunder,
as the same may be amended from time to
time.
"Holder" means
the Preferred Stockholder and any transferee of the
Preferred Stockholder's Registrable
Securities with respect to the rights that
such transferee shall have acquired in
accordance with Section 8, at such times
as such Persons shall own Registrable
Securities.
"Losses" has the
meaning specified in Section 7.1.
"Merger
Agreement" has the meaning set forth in the first recital
above.
"Participating
Holders" means the Holders participating in a registration
hereunder.
"Preferred
Stockholder" has the meaning set forth in the first paragraph
hereof.
"Registrable
Securities" means (a) any Common Stock issued upon the
conversion of any Series A Preferred Shares
and (b) any Common Stock issued or
issuable with respect to the securities
referred to in clause (a) by way of a
stock dividend or stock split or in
connection with a combination of shares,
recapitalization, merger, consolidation or
other reorganization. As to any
particular Registrable Securities, such
securities shall cease to be Registrable
Securities when they have been (i)
distributed to the public pursuant to an
offering registered under the Securities
Act, (ii) distributed to the public
through a broker, dealer or market maker
pursuant to Rule 144 (or any similar
provision then in force) under the
Securities Act, (iii) become eligible for
sale (with respect to any Holder thereof)
pursuant to Rule 144 promulgated under
the Securities Act within a six-month
period in accordance with the limitations
set forth in Rule 144(e) promulgated under
the Securities Act, (iv) eligible for
sale (with respect to any Holder thereof)
under Rule 144(k) of the Securities
Act (or any similar or successor rule
become eligible for resale pursuant to the
provisions of Rule 144 of the Securities
Act), or (v) otherwise transferred and
new certificates for them not bearing a
restrictive legend as provided by the
Securities Act, and the rules and
regulations promulgated thereunder, have been
delivered by the Company. For purposes of
this Agreement, a Person shall be
deemed to be the holder of Registrable
Securities, and the Registrable
Securities shall be deemed to be
outstanding and in existence, whenever such
Person has the right to acquire Registrable
Securities, and such Person shall be
entitled to exercise the rights of a Holder
of such Registrable Securities
hereunder.
"SEC" means the
Securities and Exchange Commission, including any
governmental authority or agency succeeding
to the functions thereof.
"Securities Act"
means the Securities Act of 1933, or any successor federal
statute, and the rules and regulations of
the SEC thereunder, as the same may be
amended from time to time.
"Series A
Preferred Stock" has the meaning set forth in the first recital
above.
"Shelf
Registration Statement" means a registration statement on Form
S-3
(except if the Company is not then eligible
to register the Registrable
Securities on Form S-3, any other
appropriate form) filed under the Securities
Act providing for the registration of, and
the sale on a continuous or delayed
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basis by the Holders of, all Registrable
Securities, among other capital stock
issued or issuable by the Company, pursuant
to Rule 415 under the Securities Act
and/or any similar rule that may be adopted
by the SEC, filed by the Company
pursuant to the provisions of Section 2,
including any amendments (including
post-effective amendments) and supplements
to such registration statement.
"Suspension
Period has the meaning specified in Section 3.
"Transfer" means
and includes the act of selling, giving, transferring,
creating a trust (voting or otherwise),
assigning or otherwise disposing of
(other than pledging, hypothecating or
otherwise transferring as security) (and
correlative words shall have correlative
meanings); provided, however, that any
transfer or other disposition upon
foreclosure or other exercise of remedies of
a secured creditor after an event of
default under or with respect to a pledge,
hypothecation or other transfer as security
shall constitute a "Transfer".
"Violation" has
the meaning specified in Section 7.1.
2. SHELF
REGISTRATION.
2.1 The Company shall use its commercially reasonable efforts
to
prepare and file with the SEC, no later
than 45 days following the Closing Date,
a Shelf Registration Statement relating to
the offer and sale on a continuous
basis of the Registrable Securities, among
other capital stock issued by the
Company, and, thereafter, shall use its
commercially reasonable efforts to cause
such Shelf Registration Statement to be
declared effective under the Securities
Act no later than 120 days following the
Closing Date. The Shelf Registration
Statement shall contain a "Plan of
Distribution" section as is reasonably
requested by the Holders. If the Company
fails to meet the filing and/or
effectiveness deadlines set forth in this
Section 2.1, the Company shall
nonetheless be obligated to file the Shelf
Registration Statement with the SEC
and to use its commercially reasonable
efforts to cause such Shelf Registration
Statement to be declared effective by the
SEC as soon as practicable following
the applicable deadline provided in this
Section 2.1 for so long as the
Preferred Stockholder named in the first
paragraph of this Agreement or an
Affiliate of such Preferred Stockholder
holds any Series A Preferred Shares.
2.2 This Section shall not apply to a registration of shares of
Common
Stock on Form S-4 or Form S-8 or their then
equivalent forms relating to an
offering of shares of Common Stock to be
issued solely in connection with any
acquisition of any entity or business or
otherwise issuable in connection with
any stock option, stock purchase or other
employee benefit plan
2.3 The Company shall use its best efforts to keep the Shelf
Registration Statement continuously
effective under the Securities Act (subject
to Section 3) until the earlier of (i) the
date that all Registrable Securities
covered by the Shelf Registration Statement
have been publicly sold, or (ii) the
date on which all Registrable Securities
not otherwise sold pursuant to clause
(i) and covered by the Shelf Registration
Statement may be sold pursuant to Rule
144(k).
2.4
If the Holders requesting such registration intend to
distribute
the Registrable Securities covered by their
request by means of an underwriting,
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<PAGE>
they shall so advise the Company as a part
of their request made pursuant to
this Section and the Company shall include
such information in the written
notice to other holders referred to above.
The right of any Holder to
registration pursuant to this Section shall
be conditioned upon such Holder's
agreeing to participate in such
underwriting and to permit inclusion of such
holder's Registrable Securities in the
underwriting. If such method of
disposition is an underwritten public
offering, the Company may designate the
managing underwriter of such offering. A
Holder may elect to include in such
underwriting all or a part of the
Registrable Securities it holds.
3. TEMPORARY
SUSPENSIONS OF SHELF REGISTRATION STATEMENT. Notwithstanding
anything to the contrary contained herein,
the Company shall not be obligated to
prepare and file a registration statement
pursuant to the provisions of this
Agreement if the Company delivers to the
Holders of Registrable Securities who
have requested registration a certificate
signed by the President or the Chief
Executive Officer stating that a Material
Transaction exists at the time of such
request; provided, however, that (i) the
Company may not utilize such right more
than twice during any twelve-month period,
and (ii) such right, when exercised,
shall extend for a period not to exceed 90
days from the delivery date of such
certificate (a "Suspension Period"). For
purposes of this Section, "Material
Transaction" means any material transaction
in which the Company or any of its
subsidiaries proposes to engage or is
engaged in, including, without limitation,
a purchase or sale of assets or securities,
financing, merger, consolidation or
any other transaction that may require
disclosure pursuant to the Exchange Act
and with respect to which the Company's
Board of Directors has reasonably
determined in good faith that compliance
with this Agreement will either
materially interfere with Company's ability
to consummate such transaction or
require the Company to disclose material,
non-public information prior to such
time it would otherwise be required to be
disclosed. The Company shall provide
written notice to the Holders to require
the Holders to suspend the use of the
prospectus forming a part of the Shelf
Registration Statement for sales of
Registrable Securities. Immediately upon
receipt of such notice, the Holders of
Registrable Securities covered by the Shelf
Registration Statement shall suspend
the use of the prospectus forming a part of
the Shelf Registration Statement
until requisite changes to such prospectus
have been made as required herein or
until the Holders are advised in writing
(the "Advice") by the Company that the
use of the prospectus may be resumed. After
the expiration of any Suspension
Period and without any further request from
a Holder, the Company shall as
promptly as reasonably practicable prepare
a post-effective amendment or
supplement to the Shelf Registration
Statement or the prospectus forming a part
thereof, or any document incorporated
therein by reference, or file any other
required document so that, as thereafter
delivered to purchasers of Registrable
Securities included therein, such
prospectus will not include an untrue
statement of a material fact or omit to
state any material fact necessary to
make the statements therein, in light of
the circumstances under which they were
made, not misleading.
4. REGISTRATION
PROCEDURES; ADDITIONAL AGREEMENTS. With respect to the
Company's obligations under Section 2, the
Company shall:
4.1 Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and
use its commercially reasonable
efforts to cause such registration
statement to become effective; provided,
however, that before filing a registration
statement or prospectus or any
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<PAGE>
amendments or supplements thereto, the
Company shall furnish to one firm of
counsel selected by the Participating
Holders holding a majority of the
Registrable Securities covered by such
registration statement copies of all such
documents in the form substantially as
proposed to be filed with the SEC at
least three (3) Business Days (or with
respect to any prospectus or any
amendment or supplement, at least two (2)
Business Days) prior to filing for
review and comment by such counsel, which
opportunity to comment shall include
an absolute right to control or contest
disclosure if any Participating Holder
reasonably believes that it may be subject
to controlling person liability under
applicable securities laws with respect
thereto, and if such review lasts longer
than 48 hours, the filing and effectiveness
requirements set forth in Section 2
shall be suspended during the pendency of
such review.
4.2 Notify each Participating Holder of the effectiveness of
any
registration statement with respect to the
Registrable Securities and prepare
and file with the SEC such amendments and
supplements to such registration
statement and the prospectus used in
connection with such registration statement
as may be necessary to comply with the
provisions of the Securities Act and
rules thereunder with respect to the
disposition of all securities covered by
such registration statement. The Company
shall amend the registration statement
or supplement the prospectus included
therein so that it will remain current and
in compliance with the requirements of the
Securities Act for the period
specified in Section 2.2, and if during
such period any event or development
occurs as a result of which the
registration statement or prospectus contains a
misstatement of a material fact or omits to
state a material fact required to be
stated therein or necessary to make the
statements therein not misleading, the
Company shall promptly notify each
Participating Holder, amend the registration
statement or supplement the prospectus so
that each will thereafter comply with
the Securities Act and furnish to each
Participating Holder such amended or
supplemented prospectus, which each such
Holder shall thereafter use in the
Transfer of Registrable Securities covered
by such registration statement.
4.3 Furnish to each of the Participating Holders, without charge,
such
numbers of copies of such registration
statement, any pre-effective or
post-effective amendment thereto, the
prospectus included therein, including
each preliminary prospectus, and any
amendments or supplements thereto, in each
case in conformity with the requirements of
the Securities Act, and such other
related documents as any such Participating
Holders may reasonably request in
order to facilitate the disposition of the
Registrable Securities owned by such
Participating Holders.
4.4 Use its commercially reasonable efforts to register and
qualify
the securities covered by such registration
statement under such other
securities or blue sky laws of such states
or jurisdictions as shall be
reasonably requested by the Participating
Holders owning a majority of the
Registrable Securities to be included in
such registration statement; provided,
however, that the Company shall not be
required in connection therewith or as a
condition thereto to qualify to do business
as a foreign corporation, to consent
to general service of process or to subject
itself to taxation in any state or
jurisdiction.
4.5 Promptly notify each Participating Holder of any stop order
issued
by the SEC in connection therewith and take
all reasonable actions required to
prevent the entry of such stop order or to
remove it if entered.
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<PAGE>
4.6 Make available for inspection by any Participating Holder and
the
representatives of such Holders all
financial and other information as shall be
reasonably requested by them, and provide
such Holders the reasonable
opportunity to discuss the business affairs
of the Company with its principal
executives and with the independent public
accountants who have certified the
audited financial statements included in
such registration statement, in each
case all as necessary to enable them to
exercise their due diligence
responsibility under the Securities Act,
and in each case subject to the
execution of a confidentiality agreement in
a form acceptable to the Company.
4.7 Use all reasonable efforts to cause all Registrable Securities
to
be listed on the NASDAQ National Market or
the NASDAQ Small Cap Market.
4.8 Take such other actions as are reasonably required in order
to
expedite or facilit
