-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I5+XwNdlTU+b94ceH/654Mwy90XtEED4GJd+YOYaai6ouVTwqp0HYuPE6AHGaxLR UU8DcrRxpb/6bBhM/cBWnQ== 0000950157-06-000745.txt : 20060804 0000950157-06-000745.hdr.sgml : 20060804 20060804145529 ACCESSION NUMBER: 0000950157-06-000745 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20060804 DATE AS OF CHANGE: 20060804 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MOMENTA PHARMACEUTICALS INC CENTRAL INDEX KEY: 0001235010 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 043561634 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-79927 FILM NUMBER: 061005503 BUSINESS ADDRESS: STREET 1: 43 MOULTON STREET CITY: CAMBRIDGE STATE: MA ZIP: 02138 BUSINESS PHONE: 6174919700 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NOVARTIS AG CENTRAL INDEX KEY: 0001114448 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: LICHSTRASSE 35 CITY: BASEL SWITZERLAND STATE: V8 ZIP: CH 4056 MAIL ADDRESS: STREET 1: LICHSTRASSE 35 CITY: BASEL SWITZERLAND ZIP: CH 4056 SC 13D 1 sc13d.htm SCHEDULE 13D Schedule 13D


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
SCHEDULE 13D
Under the Securities Exchange Act of 1934
___________________________
 
Momenta Pharmaceuticals, Inc.
(Name of Issuer)
___________________________
 
COMMON STOCK, Par Value $.0001 Per Share
(Title of Class of Securities)
___________________________
60877T100
(CUSIP Number)
___________________________
Peter Rupprecht
Novartis Pharma AG
Lichstrasse 35
CH 4058 Basel, Switzerland
+416132445570
 
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
___________________________
Copy to:
Philip A. Gelston, Esq.
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
(212) 474-1000
___________________________
July 25, 2006
(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 that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ]
 
NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 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. 60877T100

1)
Name of Reporting Persons.
Novartis AG
I.R.S. Identification Nos. of Above Persons (entities only).
00-0000000
2)
Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
(b)
3)
SEC Use Only
 
4)
Source of Funds (See Instructions)
AF
5)
Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)
 
6)
Citizenship or Place of Organization
Switzerland
Number of
Shares Beneficially
Owned by
Each
Reporting
Person
With
7)
Sole Voting Power
 
8)
Shared Voting Power
4,708,679
9)
Sole Dispositive Power
 
10)
Shared Dispositive Power
4,708,679
11)
Aggregate Amount Beneficially Owned by Each Reporting Person
4,708,679
12)
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
 
13)
Percent of Class Represented by Amount in Row (11)
13.1%
14)
Type of Reporting Person (See Instructions)
CO
 
 

 
 
CUSIP No. 60877T100

1)
Name of Reporting Persons.
Novartis Pharma AG
I.R.S. Identification Nos. of Above Persons (entities only).
00-0000000
2)
Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
(b)
3)
SEC Use Only
 
4)
Source of Funds (See Instructions)
WC
5)
Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e)
 
6)
Citizenship or Place of Organization
Switzerland
Number of
Shares Beneficially
Owned by
Each
Reporting
Person
With
7)
Sole Voting Power
 
8)
Shared Voting Power
4,708,679
9)
Sole Dispositive Power
 
10)
Shared Dispositive Power
4,708,679
11)
Aggregate Amount Beneficially Owned by Each Reporting Person
4,708,679
12)
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
 
13)
Percent of Class Represented by Amount in Row (11)
13.1%
14)
Type of Reporting Person (See Instructions)
CO
 
 
 

 
 
Item 1.    Security and Issuer.
 
        This statement on Schedule 13D (the "Statement") relates to common stock, par value $.0001 per share (the “Common Stock”), of Momenta Pharmaceuticals, Inc., a Delaware corporation (the “Issuer”). The address of the principal executive offices of the Issuer is 675 West Kendall Street, Cambridge, Massachusetts 02142.
 
Item 2.    Identity and Background.
 
        (a) - (c); (f)    Novartis AG ("Novartis") is a Swiss corporation and is the publicly owned parent of a multinational group of companies specializing in the research, development, manufacture, sale and distribution of innovative healthcare products. Novartis is a holding company whose principal businesses, which are conducted by its various operating subsidiaries, are pharmaceuticals and consumer health, which includes generics, over-the-counter self-medication, animal health, medical nutrition, infant and baby foods and products and eye care products. Novartis's principal business address is located at Lichstrasse 35, 4056, Basel, Switzerland.
 
        Novartis Pharma AG (the "Investor") is Swiss corporation and is a wholly-owned subsidiary of Novartis. The Investor is principally engaged in the research and development, production and worldwide marketing of pharmaceuticals. The Investor's principal business address is located at Lichstrasse 35, CH 4058 Basel, Switzerland.
 
        Novartis and the Investor are collectively referred to herein as the "Reporting Persons".
 
        The name, function, business address, citizenship and present principal occupation of the executive officers and members of the Board of Directors of each of the Reporting Persons is set forth on Schedule I hereto and incorporated herein by reference.
 
        (d) - (e)    Neither of the Reporting Persons nor, to the best knowledge of the Reporting Persons, any of the persons listed on Schedule I hereto, during the last five years, has (i) been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors), or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was, or is subject to, a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
 
Item 3.    Source and Amount of Funds or Other Consideration.
 
        The aggregate amount of funds required by the Investor to purchase the Securities (as defined in Item 4) will be $75,000,000. The Investor expects the funds to be used to purchase the Securities will be obtained from working capital and no part of the purchase price for the Securities will consist of borrowed funds.
 

 


Item 4.    Purpose of Transaction.
 
        On July 25, 2006, in connection with the execution of a memorandum of understanding (the "MOU") among Sandoz AG (an affiliate of the Reporting Persons) and the Issuer relating to a collaboration to develop complex generics and follow-versions of biotechnology drugs, the Investor entered into a Stock Purchase Agreement (the "Purchase Agreement") with the Issuer. Pursuant to the terms of the Purchase Agreement and subject to the satisfaction or waiver of the conditions set forth therein, the Investor will acquire 4,708,679 newly-issued shares of Common Stock (the "Securities") from the Issuer for an aggregate purchase price of $75,000,000 in cash.
 
        The preceding description of the Purchase Agreement is qualified by reference to the full text of the Purchase Agreement, filed as Exhibit 1 hereto and incorporated herein by reference in its entirety.
 
        The Reporting Persons are acquiring the Securities for general investment purposes.
 
        Other than as described above, neither of the Reporting Persons have any present plans or proposals which relate to or that would result in any of the actions or transactions described in paragraphs (a) through (j) of Item 4 of the instructions to Schedule 13D. Subject to the terms of the Purchase Agreement and the Investor Rights Agreement entered into concurrently therewith (the “Investor Rights Agreement”), each Reporting Person may in the future acquire additional shares of Common Stock or other securities of the Issuer, in the open market, in privately-negotiated purchases or otherwise, and may also, depending on then current circumstances, dispose of all or a portion of the Common Stock beneficially owned by them in one or more transactions. Additionally, each Reporting Person reserves the right from time to time to formulate plans or proposals regarding the Issuer or any of its securities and to carry out any of the actions or transactions described in paragraphs (a) through (j) of Item 4 of the instructions to Schedule 13D, to the extent deemed advisable by such Reporting Person and subject to the terms of the Purchase Agreement and the Investor Rights Agreement.
 
Item 5.    Interest in Securities of the Issuer.
 
        (a) - (c)    As of the date hereof, the Investor has the right to acquire the shares of Common Stock from the Issuer pursuant to the Purchase Agreement and may be deemed to be the record and beneficial owner of the Securities. As a result of the Investor's right to acquire the shares of Common Stock from the Issuer pursuant to the Purchase Agreement, Novartis may be deemed to be the beneficial owner of the Securities. Following the issuance of 4,708,679 shares of Common Stock as contemplated by the Purchase Agreement with the Issuer, the Securities will, based on publicly available information, represent approximately 13.1% of the then outstanding Common Stock and the Reporting Persons will have shared power to vote or direct the vote and shared power to dispose or to direct the disposition of the Securities.
 

 

 

        Except as described in this Statement, neither of the Reporting Persons nor, to the best knowledge of the Reporting Persons, any of the persons identified in Schedule I hereto (i) beneficially owns any additional shares of Common Stock or (ii) has effected any transactions in the shares of Common Stock in the past sixty days.
 
      (d) - (e) Not applicable
 
Item 6.     Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
 
        Pursuant to the Investor Rights Agreement, the Issuer has agreed to register under the Securities Act of 1933 sales by the Investor and certain of its transferees (the "Holders") of the Securities. The Holders may make two demand registrations per year, subject to specified limitations, including limitations on the number of Securities to be registered and the timing of such registrations. The Holders may also piggyback on the demand registrations of other stockholders or on a registration of the Issuer, subject to similar limitations.
 
        Pursuant to the Investor Rights Agreement, the Investor has agreed not to take certain actions to acquire more than 13.5% of the total outstanding voting securities of the Issuer or influence control of the Issuer until the earliest of (i) the termination of the MOU (or, if later entered into, the collaboration and license agreement contemplated thereby), (ii) the Termination Date (as defined in the Investor Rights Agreement) and (iii) 24 months from the date of the closing of the purchase of the Securities.
 
        The preceding description of the Investor Rights Agreement is qualified by reference to the full text of the Investor Rights Agreement, a copy of which is filed as Exhibit 2 hereto and incorporated herein by reference in its entirety.
 
        Except for the transactions and agreements provided for or contemplated by the Purchase Agreement and the Investor Rights Agreement, neither of the Reporting Persons nor, to the best knowledge of the Reporting Persons, any of the persons listed on Schedule I hereto has any contract, arrangement, understanding or relationship (legal or otherwise) with any person with respect to any securities of the Issuer.
 
Item 7.    Material to Be Filed as Exhibits.
 
 
Exhibit 1
Stock Purchase Agreement, dated as of July 25, 2006, by and between Momenta Pharmaceuticals, Inc. and Novartis Pharma AG.
 
Exhibit 2
Investor Rights Agreement, dated as of July 25, 2006, by and between Momenta Pharmaceuticals, Inc. and Novartis Pharma AG.
 
 
 

 
 
SIGNATURE
 
        After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
 
        DATED: August 4, 2006
 
NOVARTIS AG
 
by
 /s/ Dr. Urs Baerlocher
 
Name: Dr. Urs Baerlocher
 
Title:   Head General Affairs


NOVARTIS PHARMA AG
 
by
 /s/ Dr. Urs Baerlocher
 
Name:  Dr. Urs Baerlocher
 
Title:    Head General Affairs


 

 
 
SCHEDULE I
Directors and Executive Officers of Novartis AG
 
The name, function, citizenship and present principal occupation of each of the directors and executive officers of Novartis are set forth below. Unless otherwise indicated below, each occupation set forth opposite an individual's name refers to employment with Novartis. The business address of each individual is Novartis AG, Lichstrasse 35, CH-4002 Basel, Switzerland.
 
Name and Function
 
Citizenship
 
Present Principal
Occupation
 
Daniel Vasella, M.D. Chairman of the Board of Directors,
Chief Executive Officer
 
Switzerland
 
Chairman of the Board of Directors, Chief Executive Officer
 
Helmut Sihler, J.D., Ph.D.
Vice Chairman of the Board
 
Austria
 
Retired
 
Hans-Joerg Rudloff
 
Germany
 
Chairman of Barclays Capital, the Investment Banking Division of Barclays Group, 5 The North Colonnade, Canary Wharf, London, E14 4BB, United Kingdom
 
Dr. h.c. Birgit Breuel
 
Germany
 
Retired
 
Peter Burckhardt, M.D.
 
Switzerland
 
Head of Medical Service at the University Hospital of Lausanne, CH - 1011, Lausanne, Switzerland
 
Srikant Datar, Ph.D
 
U.S.A.
 
Senior Associate Dean for Executive Education at the Graduate School of Business Administration of Harvard University, Harvard Business School, Executive Education Programs, Soldiers Field, Boston, MA, U.S.A. 02163
 
 


 
 
Name and Function
 
Citizenship
 
Present Principal
Occupation
 
William W. George
 
U.S.A.
 
Professor of Management Practice at Harvard Business School, Soldiers Field, Boston, MA, U.S.A. 02163
 
Alexandre F. Jetzer
 
Switzerland
 
Consultant
 
Pierre Landoldt
 
Switzerland
 
President of the Sandoz family foundation, 85, Avenue Général-Guisan, CH-1009 Pully, Switzerland
 
Ulrich Lehner, Ph.D.
 
Germany
 
President and CEO of Henkel KGaA, a manufacturer and vendor of consumer products, Henkelstrasse 67, 40191, Duesseldorf, Germany
 
Dr. Ing Wendelin Wiedeking
 
Germany
 
Chairman of the Executive Board of Dr. Ing. h.c. F. Porsche AG, automobile manufacturer, 70432 Stuttgart, Germany
 
Rolf M. Zinkernagel, M.D.
 
Switzerland
 
Professor and Director of the Institute of Experimental Immunology at the University of Zurich, Sternwartstrasse 2, 8091 Zurich, Switzerland
 
Urs Baerlocher, J.D.
 
Switzerland
 
Head General Affairs
 
Raymund Breu, Ph.D.
 
Switzerland
 
Chief Financial Officer
 
Juergen Brokatzky-Geiger, Ph.D.
 
Germany
 
Head of Human Resources
 
Paul Choffat, J.D.
 
Switzerland
 
Head of Consumer Health Division
 
Thomas Ebeling
 
Germany
 
Head of Pharmaceuticals Division
 


 

 
 
Name and Function
 
Citizenship
 
Present Principal
Occupation
 
Marc C. Fishman, M.D.
 
U.S.A.
 
President of the Novartis Institutes for BioMedical Research
 
Andreas Rummelt, Ph.D.
 
Germany
 
Head of Sandoz division
 
 
 
 

 
 
        Directors and Executive Officers of Novartis Pharma AG
 
        The name, function, citizenship and present principal occupation of each of the directors and executive officers of the Investor are set forth below. Unless otherwise indicated below, each occupation set forth opposite an individual's name refers to employment with the Investor. The business address of each individual is Novartis AG, Lichstrasse 35, CH-4002 Basel, Switzerland.
 
Name and Function
 
Citizenship
 
Present Principal
Occupation
 
Daniel Vasella
Chairman of the Board of Directors,
Chief Executive Officer
c/o Novartis AG
Lichtstrasse 35
CH-4002 Basel, Switzerland
 
Switzerland
 
Chairman of the Board of Directors, Chief Executive Officer
 
Dr. Raymund Breu
c/o Novartis AG
Lichtstrasse 35
CH-4002 Basel, Switzerland
 
Switzerland
 
Chief Financial Officer
 
Thomas Ebeling
c/o Novartis AG
Lichtstrasse 35
CH-4002 Basel, Switzerland
 
Germany
 
Head of Pharmaceuticals Division
 
 
 
 


Exhibit Index
 
 Exhibit
 
 Description
1
 
Stock Purchase Agreement, dated as of July 25, 2006, by and between Momenta Pharmaceuticals, Inc. and Novartis Pharma AG.
 
2
 
Investor Rights Agreement, dated as of July 25, 2006, by and between Momenta Pharmaceuticals, Inc. and Novartis Pharma AG.
 

 
EX-1 2 ex1.htm STOCK PURCHASE AGREEMENT Unassociated Document

Exhibit 1

 
 

 
 
Novartis Pharma AG
 
AND
 
Momenta Pharmaceuticals, Inc.
 
STOCK PURCHASE AGREEMENT
 
 
 
 
 
 
 
 

 

 

 
   
Page
 
1.
 
 
 
 
1
 
2.
 
 
 
 
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4.
 
 
 
 
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4.1
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4.5
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4.6
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14
 
5.
 
 
 
 
14
 
5.1
14
5.2
14
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14
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14
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14
5.6
14
 
6.
 
 
 
 
15
6.1
15
6.2
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15
6.4
15
 
7.
 
 
 
 
15
7.1
15 
7.2
15 
 
8.
 
 
 
 
16
8.1
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8.2
 16 
 
9.
 
 
 
 
16
9.1
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9.9
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9.10
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9.12
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9.13
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9.14
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9.15
20 
9.16
20 
     
 
Exhibit A - Form of Cross Receipt
 







STOCK PURCHASE AGREEMENT
 
THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of July 25, 2006, by and between Novartis Pharma AG (the “Investor”), a corporation organized under the laws of Switzerland, with its principal place of business at Lichtstraße 35, CH 4058 Basel BS, and Momenta Pharmaceuticals, Inc. (the “Company”), a Delaware corporation with its principal place of business at 675 West Kendall Street, Cambridge, Massachusetts 02142.
 
THE PARTIES HEREBY AGREE AS FOLLOWS:
 
 
Subject to the terms and conditions of this Agreement, at the Closing (as defined in Section 2.1 below), the Company shall issue and sell to the Investor and the Investor hereby irrevocably agrees to purchase from the Company 4,708,679 shares (the “Shares”) of common stock, par value $0.0001 per share of the Company (the “Common Stock”), for an aggregate purchase price (the “Aggregate Purchase Price”) equal to $75,000,000; provided, however, that in the event (a) of any stock dividend, stock split, combination of shares, reclassification, recapitalization, exchange of shares or other similar change in the capital structure of the Company after the date hereof and on or prior to the Closing which affects or relates to the Common Stock, the number of Shares shall be adjusted proportionately or (b) any “Distribution Date” or “Stock Acquisition Date” (as each such term is defined in the Shareholder Rights Plan) occurs under the Shareholders Rights Plan at any time during the period from the date of this Agreement to the Closing Date, the Company and the Investor shall make such adjustment to this Section 1 as the Company and the Investor shall mutually agree so as to ensure that the Investor receives, in addition to the Shares, the benefits received by any stockholder of the Company on the “Distribution Date” or the “Stock Acquisition Date” (or benefits of an equivalent economic value) under the Shareholder Rights Plan as a result of the consummation of the transactions contemplated hereby.
 
 
2.1  Closing Date. The closing of the purchase and sale of the Shares (the “Closing”) shall be held as soon as reasonably practicable (but in any event, no later than the second business day) after the day of satisfaction or valid waiver of the conditions to the Closing set forth in Sections 5, 6 and 7 hereof (other than those conditions that by their nature cannot be satisfied until the Closing Date, but subject to the satisfaction or valid waiver of such conditions) (provided, that if all the conditions set forth in Sections 5, 6 and 7 hereof shall not have been satisfied or validly waived on such day, then the Closing shall take place on the first business day on which all such conditions shall have been or can be satisfied or shall have been validly waived) or such other date as the Company and the Investor may agree upon at 10:00 a.m. at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, MA 02109. The date of the Closing is hereinafter referred to as the “Closing Date.”
 
 
 
 
2.2  Deliveries.
 
(a)  Deliveries by the Company. At the Closing, the Company shall deliver to the Investor the stock certificate(s), registered in the Investor’s name or of such broker-dealers as may be designated by the Investor as its nominee at least two business days prior to the Closing Date, representing the Shares being purchased by the Investor at the Closing. The Company will also make the following deliveries in connection with the Closing: (i) a certificate of the Secretary or Assistant Secretary of the Company, dated the Closing Date, certifying as to (A) the resolutions of the Company’s Board of Directors authorizing the execution and delivery of this Agreement, the Investor Rights Agreement, the MOU and the Collaboration and License Agreement, the issuance of the Shares to the Investor, the execution and delivery of such other documents and instruments as may be required by this Agreement, the Investor Rights Agreement, the MOU or the Collaboration and License Agreement and the consummation of the transactions contemplated hereby and thereby and certifying that such resolutions were duly adopted and have not been rescinded or amended or superceded as of such date, and (B) the name and the signature of the officers of the Company authorized to sign, as appropriate, this Agreement, the Investor Rights Agreement, the MOU, the Collaboration and License Agreement and the other documents and certificates to be delivered pursuant to this Agreement, the Investor Rights Agreement, the MOU or the Collaboration and License Agreement by either the Company or any of its officers; (ii) copies of (A) the Company’s Third Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate”), certified by the Secretary of State of Delaware as of a date not earlier than two (2) business days prior to the Closing Date and accompanied by a certificate of the Secretary or Assistant Secretary of the Company, dated as of the Closing Date, stating that no amendments have been made to the Amended and Restated Certificate since such date, and (B) the Company’s Second Amended and Restated By-laws (the “By-laws”), certified by the Secretary or Assistant Secretary of the Company; (iii) a good standing certificate dated as of a date not earlier than two (2) business days prior to the Closing Date issued with respect to the Company by the Secretary of State of Delaware (which good standing shall be confirmed orally by such Secretary of State as of the Closing); and (iv) a duly executed Cross Receipt setting forth the Shares being purchased at the Closing and the Aggregate Purchase Price, substantially in the form of Exhibit A attached hereto.
 
(b)  Deliveries by the Investor. At the Closing, the Investor shall deliver the Aggregate Purchase Price by wire transfer of same day funds per the Company’s wiring instructions (which shall have been delivered to the Investor not less than two business days before the Closing Date). The Investor will also deliver a duly executed Cross Receipt setting forth the Shares being purchased at the Closing and the Aggregate Purchase Price, substantially in the form of Exhibit A attached hereto.
 
2.3  Further Assurances. The Company and the Investor hereby covenant and agree without the necessity of any further consideration, to execute, acknowledge and deliver any and all such other documents, obtain waivers and consents and take any such other action and corporate and other proceedings as may be reasonably necessary to carry out the intent and purposes of this Agreement and to provide to the other party copies (executed or certified, as may be appropriate) of all documents which they or their counsel may reasonably have requested in connection with the transactions contemplated by this Agreement.
 
2.4  Effects of Closing. All the actions required to be performed at Closing shall be deemed to have occurred simultaneously, and none of such actions shall be considered performed, until and unless all such actions have been performed, or the requirement thereof has been validly waived by the relevant party. Closing shall not, in and of itself, constitute a waiver by either party of any of its rights in relation to any breach by the other party prior to Closing of any representation or warranty or any undertaking made by such other party in this Agreement.
 
 
 
 
 
The Company hereby represents and warrants to the Investor that the statements contained in this Section 3 are true and correct, except as expressly set forth herein or in the disclosure schedule delivered by the Company to the Investor dated as of the date of this Agreement (the “Disclosure Schedule”):
 
3.1  Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite corporate power and corporate authority to own and operate its properties and assets, to carry on its business as now conducted and as proposed to be conducted, to enter into this Agreement, the Investor Rights Agreement, the MOU and the Collaboration and License Agreement, to sell the Shares and to carry out the other transactions contemplated hereunder and thereunder. The Company is qualified to transact business and is in good standing in each jurisdiction in which the failure to qualify could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. For purposes of this Agreement, the term "Material Adverse Effect" means a material adverse effect on (i) the business, properties, tangible and intangible assets, condition (financial or otherwise) or results of operations of the Company and its Subsidiaries, taken as a whole or (ii) the Company's ability to consummate the transactions contemplated by this Agreement, the Investor Rights Agreement or the MOU (if later executed, the Collaboration and License Agreement); provided, however, that none of the following shall constitute, or shall be considered in determining whether there has occurred, a Material Adverse Effect: (a) changes that are the result of general economic or political factors affecting the national or world economy or acts of war or terrorism in each case, except to the extent the Company is, or could reasonably be expected to be, materially and disproportionately affected; (b) changes that are the result of factors generally affecting the industries or markets in which the Company operates except to the extent the Company is, or could reasonably be expected to be, materially and disproportionately affected; (c) any adverse change, effect of circumstance arising out of the announcement of the transactions contemplated by this Agreement; (d) any decline in the stock price or trading volume of the Common Stock (but not the underlying reason for such decline); (e) any action, proceeding, litigation or settlement that would, directly or indirectly, materially affect the Company's U.S. enoxaparin program, or the taking of any regulatory action by the United States Food and Drug Administration or any other Governmental Authority that would, directly or indirectly, materially affect the Company's U.S. enoxaparin program; and (f) any action taken at the request of the Investor. The Company has made available to the Investor true, correct and complete copies of the Amended and Restated Certificate and the By-laws.
 
 
(a)  As of July 21, 2006, the authorized capital of the Company consists of:
 
(i)  Preferred Stock. 5,000,000 shares of Preferred Stock, par value $0.01 per share (the “Preferred Stock”), of which 100,000 shares have been designated Series A Junior Participating Preferred Stock (the “Series A Preferred Stock”), none of which are issued and outstanding; and
 
 
 
 
(ii)  Common Stock. 100,000,000 shares of Common Stock, of which 31,171,140 shares are issued and outstanding (including 630,000 shares of Common Stock subject to vesting or other forfeiture restrictions or repurchase conditions) .
 
(b)  Except as set forth in Section 3.2(a) or Section 3.2(c), as of July 21, 2006, there are not issued, reserved for issuance or outstanding, and since such date there have been no issuances or deliveries by the Company or any of its Subsidiaries (other than the issuance of shares of Common Stock pursuant to the exercise of Company Stock Options outstanding as of July 21, 2006, in accordance with their terms as in effect on July 21, 2006) of, any (i) shares of capital stock or other voting securities or equity interests of the Company, (ii) options, warrants, rights (including conversion or preemptive rights, stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of Common Stock on a deferred basis or other rights that are linked to the value of Common Stock or the value of the Company or any of its Subsidiaries or any part thereof granted under the Company Stock Plans or otherwise), convertible or exchangeable securities, commitments, contracts, agreements or undertakings, in each case, pursuant to which the Company or any of its Subsidiaries is or may become obligated to (A) issue, deliver, sell or repurchase, or cause to be issued, delivered, sold or repurchased, any shares of its capital stock or other voting securities or equity interests of, or any security convertible or exercisable for or exchangeable into any capital stock or other voting securities or equity interests of, the Company or any of its Subsidiaries or (B) issue, grant, extend or enter into any such option, warrant, right, convertible or exchangeable security, commitment, contract, agreement or undertaking; or (iii) bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company may vote issued, reserved for issuance or outstanding. There are no restrictions on the transfer of capital stock of the Company imposed by the Amended and Restated Certificate, the By-laws, any agreement to which the Company is a party, or any order of any court or any Governmental Authorities to which the Company is subject. There are no obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock, other voting securities or equity interests of the Company or any of its Subsidiaries.
 
(c)  As of July 21, 2006, 4,566,268 shares of Common Stock were reserved and available for issuance pursuant to the Company’s Amended and Restated 2002 Stock Incentive Plan, 2004 Stock Incentive Plan, as amended, and 2004 Employee Stock Purchase Plan (the “ESPP”) (such plans, collectively, the “Company Stock Plans”), of which 2,523,927 shares of Common Stock were subject to outstanding options to purchase shares of Common Stock from the Company pursuant to the Company Stock Plans or otherwise (other than rights under the ESPP) (together with any other stock options granted after July 21, 2006, the “Company Stock Options”). Other than as set forth in the preceding sentence, there are no other shares of Common Stock reserved and available for issuance. There is no capital stock of the Company held by the Company or any of its Subsidiaries. All of the Series A Preferred Stock is reserved for issuance under the Shareholder Rights Plan and is the only Preferred Stock reserved or available for issuance.
 
(d)  Except as reflected in the Company's audited financial statements as set forth in the Company SEC Documents, the per share exercise price of each Company Stock Option was not less than the fair market value of a share of Common Stock on the applicable grant date.
 
 
 
 
(e)  Except as set forth in the Company’s Public Filings, the Company’s Schedule 14A filed by the Registrant on April 28, 2006 (as amended on May 5, 2006), and the Company’s Schedule 14A filed by the Registrant on April 20, 2005 (in each case including the exhibits thereto), the Company is not a party to or subject to any agreement or understanding relating to, and to the Company’s knowledge there is no agreement or understanding between any Persons which relates to, the voting of shares of capital stock of the Company or the giving of written consents by a stockholder or director of the Company.
 
3.3  Subsidiaries. Except as set forth in the Company’s Public Filings:
 
(a)  The Company does not presently own or control, directly or indirectly, any other corporation, partnership, joint venture, association or other business entity. Each Subsidiary is duly organized and existing under the laws of its jurisdiction or organization, is in good standing under such laws and is duly qualified to do business as a foreign corporation in each jurisdiction in which a failure to so qualify would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
 
(b)  All the outstanding shares of capital stock of each Subsidiary are validly issued, fully paid and nonassessable, and are owned by the Company free and clear of any Encumbrances, other than restrictions under securities laws.
 
(c)  There are no options, warrants, convertible securities, or other rights, agreement, arrangements or commitments of any character relating to the capital stock of any Subsidiary.
 
(d)  No Subsidiary is a member of (nor is any part of its business conducted through) any partnership, nor is it a participant in any joint venture or similar arrangement.
 
(e)  There are no voting trust, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any shares of capital stock of or any other interests in any Subsidiary.
 
3.4  Authorization. All corporate action on the part of the Company necessary for the authorization, execution and delivery of this Agreement, the Investor Rights Agreement, the MOU and the Collaboration and License Agreement, the performance of all obligations of the Company hereunder and thereunder and the authorization, issuance and delivery of the Shares to be sold hereunder, including the approval by the Company’s Board of Directors, has been taken or will be taken prior to the Closing. This Agreement, the Investor Rights Agreement and the MOU have been duly executed and delivered by the Company and constitute, and upon execution and delivery thereof, the Collaboration and License Agreement will constitute, valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws of general application relating to or affecting enforcement of creditors rights and subject to general equity principles.
 
 
 
 
3.5  No Conflict. The execution, delivery and performance of this Agreement, the Investor Rights Agreement, the MOU and the Collaboration and License Agreement and compliance with the provisions hereof and thereof by the Company, will not:
 
(a)  violate any provision of law, statute, ordinance, rule or regulation or any ruling, writ, injunction, order, judgment or decree of any court, administrative agency or other governmental body, the violation of which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
 
(b)  conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute (with due notice or lapse of time, or both) a default (or give rise to any right of termination, cancellation or acceleration) under (i) any agreement, document, instrument, contract, understanding, arrangement, note, indenture, mortgage or lease to which the Company or any if its Subsidiaries is a party or under which the Company, any of its Subsidiaries or any of its or their respective assets is bound or affected, except for any such conflicts, breaches, defaults, terminations, cancellations or accelerations that could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (ii) the Amended and Restated Certificate, (iii) the By-laws or (iv) the certificate of incorporation, by-laws or similar governing documents of any of the Company’s Subsidiaries; or
 
(c)  result in the creation of any Encumbrance upon any of the Shares, other than restrictions on resale pursuant to securities laws and the Investor Rights Agreement, or on any of the properties or assets of the Company or any Subsidiary.
 
3.6  Valid Issuance of Common Stock. When issued, sold and delivered in accordance with the terms hereof for the consideration set forth herein, the Shares will be duly authorized, validly issued, fully paid and nonassessable, and will not be subject to any antidilution rights, rights of first refusal or other similar rights or restrictions on transfer, other than under securities laws. No further approval or authority of the stockholders or the Board of Directors of the Company will be required for the consummation of the transactions contemplated by this Agreement (including the issuance and sale of the Shares as contemplated by this Agreement).
 
3.7  Governmental Consents. Assuming the accuracy of the Investor’s representations contained in Section 4 of this Agreement, no consent, approval, license, permit, order or authorization of, or registration, qualification, designation, declaration, notification or filing with, any federal, state, foreign or local Governmental Authority, any national stock exchange or national quotation system on which the securities issued by the Company or any of its Subsidiaries are listed or quoted (including the National Association of Securities Dealers or the NASDAQ Global Market), or any other person, on the part of the Company or any of its Subsidiaries, is required in connection with the execution, delivery and performance of this Agreement, the execution and delivery of the Investors Rights Agreement, the execution and delivery of the MOU, the offer, sale, or issuance of the Shares or the consummation of any other transactions contemplated hereby or thereby, except (i) the qualification (or the taking of such action as may be necessary to secure an exemption from qualification) of the offer and sale of the Shares under applicable Blue Sky laws, which filings and qualifications, if required, shall be accomplished prior to the Closing, (ii) as may be required pursuant to the Hart-Scott-Rodino Antitrust Improvements Act, as amended (“HSR Act”), if applicable, and (iii) a notice of (A) listing of additional shares with respect to the Shares and (B) a change in the number of outstanding shares of the Company, each to the NASDAQ Stock Market, Inc.
 
 
  
 
3.8  Litigation. Except as set forth in the Company’s Public Filings, there is no action, suit, proceeding or investigation pending or, to the Company’s knowledge, currently threatened against the Company or any Subsidiary which questions the validity of this Agreement, the Investor Rights Agreement or the MOU or the right of the Company to enter into such agreements, or to consummate the transactions contemplated hereby or thereby, or which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
 
3.9  Proprietary Rights. To the Company’s knowledge, the Company owns or possesses the licenses or rights to use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service names and trade names and all other intellectual property rights, whether registered or not, necessary to enable it to conduct its business as now operated (the “Intellectual Property”). Except as set forth in the Company’s Public Filings, to the Company’s knowledge, there are no material outstanding options, licenses or agreements relating to the Intellectual Property, nor is the Company bound by or a party to any material options, licenses or agreements relating to the Intellectual Property of any other person or entity. Except as disclosed in the Company’s Public Filings, there is no claim or action or proceeding pending or, to the Company’s knowledge, threatened that challenges the right of the Company with respect to any Intellectual Property. Except as set forth in the Company’s Public Filings, to the Company’s knowledge, the Company’s Intellectual Property does not infringe any Intellectual Property rights of any other person which, if the subject of an unfavorable decision, ruling or finding could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
 
To the Company’s knowledge, confidential information relating to the Company, the Subsidiaries and the underlying business of the Company and its Subsidiaries has been kept confidential and has not been disclosed to third parties except in the ordinary course of business and subject to written confidentiality obligations from the third party which, to the Company’s knowledge, have not been breached. To the Company’s knowledge, none of the operations of the Company and the Subsidiaries involve the unauthorized use of confidential information.
 
 
(a)  Except as set forth in the Company’s Public Filings, since December 31, 2005, the Company has not (i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock or other voting or equity securities of the Company, (ii) sold, exchanged or otherwise disposed of any of its material assets or rights, other than in the ordinary course of business, (iii) issued, sold, reclassified, combined or split, or directly or indirectly purchased, redeemed or otherwise acquired, any capital stock or other voting or equity securities of the Company (other than in accordance with the Company Stock Plans), (iv) changed or amended the Restated Certificate or the By-laws, (v) made any material change in the financial accounting methods, principles or practices of the Company and its Subsidiaries for financial accounting purposes, except as required by GAAP or applicable law, or (vii) committed or agreed to do any of the foregoing.
 
 
 
 
(b)  Since December 31, 2005, the Company has not admitted in writing its inability to pay its debts generally as they become due, filed or consented to the filing against it of a petition in bankruptcy or a petition to take advantage of any insolvency act, made an assignment for the benefit of creditors, consented to the appointment of a receiver for itself or for the whole or any substantial part of its property, or had a petition in bankruptcy filed against it, been adjudicated a bankrupt, or filed a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other laws of the United States or any other jurisdiction.
 
(c)  The Company and its Subsidiaries are in compliance with all obligations, agreements and conditions contained in any evidence of indebtedness or any loan agreement to which the Company or any of its Subsidiaries is a party or is subject (collectively, the “Obligations”), the lack of compliance with which would afford to any Person the right to (i) accelerate any material indebtedness or (ii) terminate any right or agreement of the Company or any of its Subsidiaries, the termination of which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. To the Company’s knowledge, all other parties to such Obligations are in compliance with the terms and conditions of such Obligations, except for any non-compliance that could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
 
3.11  Registration Rights. The Company has not granted or agreed to grant any registration rights with respect to shares of the Company’s capital stock or other voting or equity securities of the Company under the Securities Act of 1933, as amended (the “Securities Act”), including piggyback rights, to any Person.
 
3.12  Title to Property and Assets. Except as provided in the Company’s Public Filings, the Company or one of its Subsidiaries has good title to, a valid leasehold interest in, or a valid license to use, all of the material tangible property and assets reflected on the Company’s balance sheet as of December 31, 2005, free and clear of all material liens, claims, restrictions or Encumbrances, except those assets sold, consumed or otherwise disposed of since the date of such balance sheet in the ordinary course of business, none of which either alone or in the aggregate are material, either in nature or amount, to the business of the Company and its Subsidiaries taken as a whole.
 
 
(a)  The Company has made available to the Investor (i) the Company’s audited financial statements for the year ended December 31, 2005 contained in the Company’s annual report on Form 10-K (the “Audited Financial Statements”); and (ii) the Company’s unaudited financial statements for the quarter ended March 31, 2006 (collectively with the Audited Financial Statements, the “Financial Statements”). The Financial Statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods indicated (except as may be indicated in notes or as permitted by Form 10-Q) and fairly present in all material respects the financial condition and operating results of the Company as of the dates, and for the periods, indicated therein (subject, in the case of unaudited statements, to normal year-end audit adjustments). Since December 31, 2005, the Company has conducted its business in the ordinary course, and there has not been any event or events that have had or could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as disclosed in the Financial Statements, neither the Company nor any of its Subsidiaries is a guarantor or indemnitor of any indebtedness of any other person, firm or corporation, or has any liabilities or obligations (whether or not accrued, absolute, contingent, liquidated or unliquidated, due or to become due and whether or not required by GAAP to be set forth on the consolidated balance sheet of the Company) that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
 
 
 
 
(b)  Since June 25, 2004, the Company has timely filed all required reports, schedules, forms, statements and other documents required to be filed by it with the Securities and Exchange Commission (the “SEC”) pursuant to the reporting requirements of the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (including exhibits and all other information incorporated therein) (the “Company SEC Documents”). As of their respective dates, the Company SEC Documents complied as to form in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such Company SEC Documents and, as of their respective dates, did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in Company SEC Documents complied as to form, as of their respective dates of filing with the SEC, in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. No Subsidiary of the Company is subject to the periodic reporting requirements of the Exchange Act.
 
 
(a)  Section 3.14(a) of the Disclosure Schedule contains a true and complete list of each Employee Benefit Plan and Employee Benefit Agreement as of the date of this Agreement, provided that such lists shall not include any Employee Benefit Plans or Employee Benefit Agreements set forth in the Company’s Public Filings. The Company has delivered or made available to the Investor true, complete and correct copies of each Employee Benefit Plan and Employee Benefit Agreement or, in the case of any unwritten arrangement, a written summary thereof that is complete and correct in all material respects.
 
(b)  Except as provided in Section 3.14(b) of the Disclosure Schedule, (i) no Employee Benefit Plan or Employee Benefit Agreement (A) is subject to Title IV of ERISA or Section 412 of the Code, (B) provides for defined benefit pension benefits or nonqualified deferred compensation benefits, (C) provides any health or life insurance benefits following termination of service or employment (other than on a self-pay basis or as required under Section 4980B(f) of the Code), (D) entitles any Participant to a tax gross-up from the Company or any Subsidiary or (E) covers any Participant who resides or works outside the United States and (ii) no Participant (A) has received any loan from the Company or any Subsidiary that has an outstanding balance, or (B) is entitled to any payment, benefit or right (or any increased or accelerated payment, benefit or right), as a result of (1) such Participant’s termination of employment with, or services to, the Company or any Subsidiary or (2) the execution of this Agreement or the consummation of the transactions contemplated by this Agreement.
 
 
 
 
3.15  Tax Returns, Payments and Elections.
 
(a)  The Company has timely made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (all such returns being accurate and complete in all material respects) and has timely paid all taxes and other governmental assessments and charges required to be paid by the Company, except those being contested in good faith in appropriate proceedings, and has set aside on its books provisions adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. To the Company’s knowledge, there are no unpaid taxes claimed to be due by the taxing authority of any jurisdiction. The Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of the Company’s tax returns is presently being audited by any taxing authority. There are no liens for taxes on any assets of the Company or its Subsidiaries except for liens with respect to taxes not yet due and payable. Neither the Company nor any of its Subsidiaries is party to or is bound by any tax sharing, allocation or indemnification agreement or arrangement (other than such an agreement or arrangement between the Company and its Subsidiaries).
 
(b)  Neither the Company nor any it its Subsidiaries has been a party to a transaction that, as of the date of this Agreement, constitutes a "listed transaction" for purposes of Section 6011 of the Internal Revenue Code of 1986, as amended, and applicable Treasury Regulations thereunder (or a similar provision of state law). To the knowledge of the Company, it has disclosed to the Investor all "reportable transactions" within the meaning of Treasury Regulations Section 1.6011-4(b) (or similar provision of state law) to which it or any of its Subsidiaries has been a party.
 
3.16  Insurance. The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company is engaged.
 
3.17  Labor Agreements and Actions. Neither the Company nor any Subsidiary has any collective bargaining agreements covering any of their respective employees, nor is the Company or any Subsidiary bound by or subject to (and none of their respective assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and no labor union has requested or, to the Company’s knowledge, has sought to represent any of the employees, representatives or agents of the Company or any Subsidiary. There is no strike or other labor dispute involving the Company, any Subsidiary or any of their respective employees pending, or to the Company’s knowledge threatened, nor is the Company aware of any labor organization activity involving its employees. Each of the Company and its Subsidiaries is, and since January 1, 2003, has been, in compliance with all applicable laws relating to employment and employment practices, occupational safety and health standards, employee classification, terms and conditions of employment, wages and hours and immigration, and is not, and since January 1, 2003, has not, engaged in any unfair labor practice, in each case except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. As of the date of this Agreement, no Key Employee has formally announced an intention to terminate his or her relationship as an employee or director of the Company or any Subsidiary and, to the Company’s knowledge, no Key Employee intends to terminate his or her relationship as an employee or director of the Company or any Subsidiary, nor does the Company have a present intention to terminate the employment of any Key Employee. For purposes of this Agreement, the term “Key Employee” shall mean Ram Sasisekharan and Ganesh Venkataraman.
 
 
 
 
3.18  Offering. None of the Company, its Subsidiaries or their representatives has issued, sold or offered any security of the Company to any person under circumstances that would cause the sale of the Shares, as contemplated by this Agreement, to be subject to the registration requirements of the Securities Act. None of the Company, its Subsidiaries or their representatives will, from and including the date of this Agreement through and including the Closing Date, offer the Shares or any part thereof or any similar securities for issuance or sale to, or solicit any offer to acquire any of the same from, anyone so as to make the issuance and sale of the Shares subject to the registration requirements of the Securities Act. Subject to the accuracy of the Investor’s representations set forth in Section 4 of this Agreement, the offer, sale and issuance of the Shares to be issued in conformity with the terms of this Agreement constitute transactions which are exempt from the registration and prospectus delivery requirements of the Securities Act and from all applicable state registration or qualification requirements, other than those with which the Company has complied or will comply with prior to the Closing.
 
3.19  Environmental Matters. Except for any matters that could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (i) the Company and its Subsidiaries (a) are in compliance with all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (b) have received all permits, licenses or other approvals required under applicable Environmental Laws to conduct their respective businesses (c) are in compliance with all terms and conditions of any such permits, licenses or approvals, and (ii) to the Company’s knowledge, there are no facts, circumstances or conditions that would reasonably be expected to result in any claim or liability against the Company or any of its Subsidiaries under Environmental Law.
 
3.20  Licenses and Other Rights; Compliance with Laws. The Company has all franchises, permits, licenses and other rights and privileges from Governmental Authorities necessary to conduct its business as presently conducted and is in compliance in all material respects thereunder. The Company and each Subsidiary are in compliance with all laws and governmental rules and regulations applicable to its business, properties and assets, including, without limitation, all such rules, laws and regulations relating to fair employment practices, occupational safety and health and public safety, except for any non-compliance that could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
 
3.21  Broker or Finders. The Company has not incurred, nor will incur, directly or indirectly, as a result of any action taken by the Company, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with this Agreement, the Investor Rights Agreement, the MOU, the Collaboration and License Agreement or any transaction contemplated hereby or thereby.
 
 
 
3.22  Market Listing. The Common Stock is listed for trading on the NASDAQ Global Market and the Company is in compliance in all material respects with the rules, regulations and requirements of the NASDAQ Global Market relating to the continued listing of the Common Stock.
 
3.23  Related Party Transactions. Except as disclosed in the Company's SEC Documents, neither the Company nor any of its Subsidiaries has entered into any transaction that would be subject to disclosure pursuant to Item 404 of Regulation S-K of the Securities Act.
 
3.24  Takeover Statues; Shareholders Rights Plan. The approval of this Agreement by the Company’s Board of Directors referred to in Section 3.4 constitutes approval of the acquisition of the Shares by the Investor for purposes of Section 203 of the Delaware General Corporation Law. Assuming the accuracy of Section 4.7, the Shareholder Rights Plan is not be triggered by the offer, sale, issuance and purchase of the Shares.
 
3.25  Reliance. The Company understands that the foregoing representations and warranties and the certificates to be delivered pursuant to Sections 5.1 and 5.2 shall be deemed material and to have been relied upon by the Investor.
 
4.  
 
The Investor hereby represents and warrants to the Company that the statements contained in Section 4 are true and correct as of the date hereof and as of the Closing Date:
 
4.1  Authorization, Governmental Consents and Compliance with Other Instruments. All corporate action on the part of the Investor necessary for the authorization, execution and delivery of this Agreement and the Investors Rights Agreement and the performance of all obligations of the Investor hereunder and thereunder has been taken or will be taken prior to the Closing. This Agreement and the Investors Rights Agreement have been duly executed and delivered by the Investor and constitute valid and legally binding obligations of the Investor, enforceable against the Investor in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other laws of general application relating to or affecting enforcement of creditors rights and subject to general equity principles. No consent, approval, order or authorization of, or registration, qualification, designation, declaration, notification or filing with, any federal, state or local Governmental Authority on the part of the Investor is required in connection with the consummation of the transactions contemplated by this Agreement and the Investors Rights Agreement, except as may be required by the HSR Act. The execution, delivery and performance of this Agreement and the Investors Rights Agreement and compliance with the provisions hereof and thereof by the Investor, will not (a) violate any provision of law, statute, ordinance, rule or regulation or any ruling, writ, injunction, order, judgment or decree of any court, administrative agency or other governmental body or (b) conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute (with due notice or lapse of time, or both) a default (or give rise to any right of termination, cancellation or acceleration) under any agreement, document, instrument, contract, understanding, arrangement, note, indenture, mortgage or lease to which the Investor is a party or under which the Investor or any of its assets is bound or affected, except for any violations, conflicts, breaches or defaults which would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of the Investor to consummate the transactions contemplated by this Agreement.
 
 
 
4.2  Purchase Entirely for Own Account. The Investor is acquiring the Shares for investment for the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Investor has no present intention of selling, granting any participation, or otherwise distributing the Shares. The Investor does not own of record or beneficially own (as defined in Rule 13d-3 of the Exchange Act) any voting securities of the Company, or any securities convertible into or exercisable for any such voting securities.
 
4.3  Disclosure of Information. The Investor acknowledges that the Company has made available to the Investor copies of the Company SEC Documents filed prior to the date of this Agreement and that the Investor has had an opportunity to ask questions of, and receive answers from, the Company regarding the terms and conditions of the offering of the Shares. The foregoing, however, does not limit or modify the representations and warranties of the Company in Section 3 of this Agreement.
 
4.4  Investment Experience and Accredited Investor Status. The Investor either (i) is an accredited investor (as defined in Regulation D promulgated under the Securities Act) or (ii) is not a United States Person as that term is defined in Regulation S of the Securities Act and is not acquiring the Shares for the account or benefit of any United States Person. The Investor is an investor in securities of companies in development stage and acknowledges that it is able to fend for itself, and bear the economic risk of its investment and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Shares hereunder.
 
4.5  Restricted Securities. The Investor understands that the Shares, when issued, will be restricted securities under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances. In this connection, the Investor represents that it is familiar with Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
 
4.6  Legends. The Investor understands and agrees that each certificate or other document evidencing any of the Shares shall be endorsed with the legend in substantially the form set forth below, as well as any other legends required by applicable law. The Investor covenants that the Investor shall not transfer the Shares represented by any such certificate without complying with the restrictions on transfer described in the legends endorsed on such certificates. It is understood that the certificates evidencing the Shares will bear the following legend until such legend is removed in accordance with Section 8.2:
 
“These securities have not been registered under the Securities Act of 1933, as amended. They may not be sold, offered for sale, pledged, hypothecated or otherwise transferred in the absence of a registration statement in effect with respect to the securities under such Act or pursuant to an applicable exemption from the registration requirements of such Act.”
 
 
 
 
4.7  Acquiring Person. Investor, including its affiliates, after giving effect to the transactions contemplated hereby, will not, either individually or with a group (as defined in Section 13(d)(3) of the Exchange Act), be the beneficial owner of 16.5% or more of the Company’s outstanding Common Stock. For purposes of this Section 4.7, beneficial ownership shall be determined pursuant to a Rule 13d-3 under the Exchange Act.
 
5.  
 
The Investor’s obligation to purchase the Shares at the Closing is subject to the fulfillment as of such Closing of the following conditions (unless waived in writing by the Investor):
 
5.1  Representations and Warranties Correct. The representations and warranties made by the Company in Section 3 hereof shall be true and correct, without regard to any materiality or Material Adverse Effect qualifiers contained therein, as of the date of this Agreement and as of the Closing Date as though made on and as of such Closing Date (except (i) to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct, without regard to any materiality or Material Adverse Effect qualifiers contained therein, as of such date, and (ii) where the failure to be true and correct, individually or in the aggregate, has not had and could not reasonably be expected to have a Material Adverse Effect), and the Company shall have delivered to the Investor a certificate, dated as of the Closing Date, executed by the President and Chief Executive Officer of the Company, certifying to the foregoing.
 
5.2  Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the Closing Date shall have been performed or complied with in all material respects, and the Company shall have delivered to the Investor a certificate, dated as of the Closing Date, executed by the President and Chief Executive Officer of the Company, certifying to the foregoing.
 
5.3  No Material Adverse Effect. There shall not have occurred any event or events that have had or could, individually or in the aggregate, reasonably be expected to have, a Material Adverse Effect.
 
5.4  Collaboration and License Agreement. The MOU, or if later entered into the Collaboration and License Agreement, shall be in full force and effect.
 
5.5  Investor Rights Agreement. The Investor Rights Agreement shall be in full force and effect.
 
5.6  Market Listing. On the Closing Date, the Shares to be delivered at that Closing shall be approved for listing on the NASDAQ Global Market.
 
 
 
 
 
The Company’s obligation to sell the applicable Shares at the Closing is subject to the fulfillment as of such Closing of the following conditions (unless waived in writing by the Company):
 
6.1  Representations and Warranties Correct. The representations and warranties made by the Investor in Section 4 hereof shall be true and correct as of the date of this Agreement and as of the Closing Date as though made on and as of such Closing Date (except (i) to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date, and (ii) where the failure to be true and correct, individually or in the aggregate, has not had and could not reasonably be expected to have a material adverse effect on the ability of the Investor to consummate the transactions contemplated by this Agreement).
 
6.2  Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by the Investor on or prior to the Closing Date shall have been performed or complied with in all material respects.
 
6.3  Collaboration and License Agreement. The MOU, or if later entered into the Collaboration and License Agreement, shall be in full force and effect.
 
6.4  Investor Rights Agreement. The Investor Rights Agreement shall be in full force and effect.
 
 
The obligations of each of the Investor and the Company to consummate the Closing is subject to the fulfillment as of the Closing Date of the following conditions:
 
7.1  HSR Act and Other Qualifications. The filings required under the HSR Act shall have been made and the required waiting period shall have elapsed as of the Closing Date, and all other authorizations, consents, waivers, permits, approvals, qualifications and registrations to be obtained or effected with any Governmental Authority, including, without limitation, necessary Blue Sky law permits and qualifications required by any state, for the offer and sale to the Investor of the Shares shall have been duly obtained and effective as of the Closing Date.
 
7.2  Absence of Litigation. There shall be no law or injunction, action, suit, proceeding or investigation pending or currently threatened in writing against the Company or the Investor which questions the validity of this Agreement, the Investor Rights Agreement, the MOU (or, if later entered into, the Collaboration and License Agreement) or the right of the Company or the Investor to enter into this Agreement, the Investor Rights Agreement or the MOU (or, if entered into, the Collaboration and License Agreement) or to consummate the transactions contemplated hereby or thereby or which prohibits or restrains the consummation of the transactions contemplated hereby or thereby.
 
 
 
 
 
8.1  Market Listing. The Company shall use commercially reasonable efforts to maintain the listing and trading of the Common Stock on the NASDAQ Global Market. The Company shall use its best efforts to effect the listing of the Shares on the NASDAQ Global Market, including submitting a notice of listing of additional shares with respect to the Shares to the NASDAQ Stock Market, Inc. no later than 15 calendar days prior to the Closing Date.
 
8.2  Share Legend Removal. The legend set forth in Section 4.6 hereof shall be removed from the certificate(s) evidencing the Shares and the Company shall, or shall cause its transfer agent to, issue, no later than five business days from receipt of a request from the Investor pursuant to this Section 8.2, a certificate or certificates evidencing all or a portion of the Shares, as requested by the Investor, without such legend if (i) such securities have been resold under an effective registration statement under the Securities Act, (ii) such securities have been or will be transferred in compliance with Rule 144 under the Securities Act, (iii) such securities are eligible for resale pursuant to Rule 144(k) under the Securities Act or (iv) the Investor shall have provided the Company with an opinion of counsel, reasonably satisfactory to the Company, stating that such securities may lawfully be transferred without registration under the Securities Act.
 
9.  
 
9.1  Survival of Warranties. The representations and warranties of the Company contained in Sections 3.1, 3.2, 3.4, 3.5, 3.6 and 3.18 and of the Investor contained in this Agreement shall survive the Closing without limitation as to time and the other representations and warranties of the Company made herein and in the certificates delivered pursuant hereto shall survive for eighteen months following the Closing. The covenants and undertakings set forth in Sections 8.1 and 8.2 of this Agreement contemplating performance by any party following the Closing shall survive in accordance with their respective terms.
 
9.2  Remedies. The rights, powers and remedies of the parties under this Agreement are cumulative and not exclusive of any other right, power or remedy which such parties may have under any other agreement or law. No single or partial assertion or exercise of any right, power or remedy of a party hereunder shall preclude any other or further assertion or exercise thereof.
 
9.3  Successors and Assigns. Except as otherwise expressly provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties, including, without limitation, successors through merger, consolidation, reorganization, recapitalization, any similar transaction or otherwise. Neither this Agreement nor any rights or duties of a party hereto may be assigned by such party, in whole or in part, without the prior written consent of the other party hereto; provided that the Investor may assign, in its sole discretion, any of or all their rights, interests and obligations under this Agreement to any affiliate of the Investor that would not reasonably be expected to cause any delay in the satisfaction of the condition set forth in Section 7.1. Any attempted assignment in violation of this Section 9.3 shall be void.
 
 
 
 
9.4  Entire Agreement. This Agreement and the other writings referred to herein or delivered pursuant hereto which form a part hereof contain the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements or understandings, whether written or oral, with respect thereto. This Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto and such assigns, any legal rights or equitable rights hereunder.
 
9.5  Governing Law, Consent to Jurisdiction and Waiver of Trial by Jury.
 
(a)  This Agreement shall be governed by and construed under the laws of the State of New York (without regard to the conflict of law principles thereof). Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Federal and state courts of the State of New York in any action or proceeding arising out of or relating to this Agreement or the agreements delivered in connection herewith or the transactions contemplated hereby or thereby or for recognition or enforcement of any judgment relating thereto, and each of the parties hereby irrevocably and unconditionally (i) agrees not to commence any such action or proceeding except in such courts, (ii) agrees that any claim in respect of any such action or proceeding may be heard and determined in such courts, (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action or proceeding in such courts, and (iv) waives, to the fullest extent permitted by laws, the defense of an inconvenient forum to the maintenance of such action or proceeding in such courts. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by laws. Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.9. Nothing in this Agreement shall affect the right of any party to this Agreement to serve process in any other manner permitted by laws.
 
(b)  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT MAY INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (II) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (III) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.5.
 
9.6  Counterparts. This Agreement may be executed in any number of counterparts, each such counterpart shall be deemed to be an original instrument, and all such counterparts together shall constitute but one agreement. Any such counterpart may contain one or more signature pages. This Agreement may be executed by facsimile signature pages.
 
9.7  Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
 
 
 
 
 
9.8  Terms Generally. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice-versa. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, unless the context expressly provides otherwise. All references herein to Sections, paragraphs, subparagraphs, clauses, Exhibits or Schedules shall be deemed references to Sections, paragraphs, subparagraphs or clauses of, or Exhibits or Schedules to this Agreement, unless the context requires otherwise. Unless otherwise expressly defined, terms defined in this Agreement have the same meanings when used in any Exhibit or Schedule hereto, including the Disclosure Schedule. Unless otherwise specified, the words “herein”, “hereof”, “hereto” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement. The term “or” is not exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”. The phrase “date hereof” or “date of this Agreement” shall be deemed to refer to July 25, 2006. Any contract, instrument or law defined or referred to herein or in any contract or instrument that is referred to herein means such contract, instrument or law as from time to time amended, modified or supplemented, including (in the case of contracts or instruments) by waiver or consent and (in the case of laws) by succession of comparable successor laws and references to all attachments thereto and instruments incorporated therein. References to a person are also to its permitted successors and assigns.
 
9.9  Notices. Unless otherwise provided, all notices, requests, consents and other communications hereunder to any party shall be given in writing and shall be deemed effectively given upon personal delivery to the party to be notified or five business days after being duly sent by first class registered or certified mail, or other courier service, postage prepaid, or the following business day after being faxed with a confirmation copy by regular mail, and addressed or faxed to the party to be notified at the address or fax number indicated for such party, as the case may be, set forth below or such other address or fax number, as the case may be, as may hereafter be designated in writing by the addressees to the addressor listing all parties:
 
 
To the Company:
   
675 West Kendall Street
Cambridge, Massachusetts 02142
Attention:  Chief Executive Officer
Fax:  (617) 621-0431
     
 
With a copy (which shall not constitute notice) to:
     
   
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attention:   Steven D. Singer, Esq.
Fax:  (617) 526-5000
     
 
 
 
 
 
To the Investor:
     
   
Novartis Pharma AG
Lichtstraße 35
CH 4058 Basel BS
Attention Peter Rupprecht
Fax:   +41 61 3245372
     
 
With a copy (which shall not constitute notice) to:
     
   
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Attention:  Philip A. Gelston, Esq.
Fax:  (212) 474- 3700

9.10  Finder’s Fee. The Investor agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s fee (and the reasonable costs and expenses of defending against such liability or asserted liability) for which the Investor or any of its officers, partners, employees, or representatives is responsible. The Company agrees to indemnify and hold harmless the Investor from any liability for any commission or compensation in the nature of a finder’s fee (and the reasonable costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.
 
9.11  Expenses. Except as otherwise contemplated herein, each party shall pay its own fees and expenses with respect to this Agreement.
 
9.12  Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor (other than the waiver of any condition set forth in Section 5, which may be waived in the sole discretion of the Investor, and other than the waiver of any condition set forth in Section 6, which may be waived in the sole discretion of the Company).
 
9.13  Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, in any jurisdiction, such provision shall be ineffective, as to such jurisdiction, and the balance of the Agreement shall be interpreted as if such provision were so excluded, without invalidating the remaining provisions of this Agreement and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
 
 
 
9.14  Confidentiality and Publicity. The Company and the Investor will mutually agree upon the form and substance of any press release relating to the terms of this Agreement, the MOU, the Collaboration and License Agreement, the Investor Rights Agreement or the transactions contemplated hereby or thereby prior to issuing any such press release, including any press release to be issued promptly after the execution hereof. Either party may only disclose the terms of the MOU or the Collaboration and License Agreement if such party reasonably determines, based on advice from its counsel, that it is required to make such disclosure by applicable law, regulation or legal process (whether in connection with its ongoing disclosure obligations, in connection with a corporate activity or otherwise), including without limitation by the rules or regulations of the SEC or similar regulatory agency in a country other than the United States or of any stock exchange or NASDAQ, in which event such party shall provide prior notice of such intended disclosure to the other party sufficiently in advance to enable the other party to seek confidential treatment or other protection for such information unless the disclosing party is prevented by law or regulation from providing such advance notice and shall disclose only such terms of the MOU or the Collaboration and License Agreement as such disclosing party reasonably determines, based on advice from its counsel, are required by applicable law, regulation or legal process to be disclosed (whether in connection with its ongoing disclosure obligations, in connection with a corporate activity or otherwise). In the event that either party determines that it must publicly file the MOU or the Collaboration and License Agreement with the SEC such party shall (i) initially file a redacted copy of the MOU or the Collaboration and License Agreement, as applicable, (ii) request, and use commercially reasonable efforts to obtain, confidential treatment of all terms redacted from such redacted MOU or Collaboration and License Agreement, provided that the redaction of such terms is permitted by the applicable rules and regulations of the SEC, (iii) permit the other party to review and approve such initial request for confidential treatment and any subsequent correspondence with respect thereto at least five (5) business days prior to its submission to the SEC and (iv) promptly deliver to the other party any written correspondence received by it or its representatives from the SEC with respect to such confidential treatment request and promptly advise the other party of any other material communications between it or its representatives with SEC with respect to such confidential treatment request.
 
9.15  Disclosure Schedule. The Disclosure Schedule shall be arranged in Subsections corresponding to the numbered Subsections contained in Section 3, and the disclosure in any Subsection of the Disclosure Schedule shall qualify the corresponding Subsection in Section 3. The inclusion of any information in the Disclosure Schedule shall not be deemed to be an admission or acknowledgment, in and of itself, that such information is required by the terms hereof to be disclosed, is material, has resulted in or would result in a Material Adverse Effect, or is outside the ordinary course of business.
 
9.16  Definitions. As used in this Agreement, the following terms shall have the following meanings:
 
Agreement” shall have the meaning set forth in the Preamble.
 
Aggregate Purchase Price” shall have the meaning set forth in Section 1.
 
Amended and Restated Certificate” shall have the meaning set forth in Section 2.2(a).
 
Audited Financial Statements” shall have the meaning set forth in Section 3.13(a).
 
business day” means any day other than the days on which banks in New York, New York or Basel, Switzerland are required or authorized to close.
 
 
 
 
 
By-laws” shall have the meaning set forth in Section 2.2(a).
 
Code” shall mean the Internal Revenue Code of 1986, as amended.
 
Closing” shall have the meaning set forth in Section 2.1.
 
Closing Date” shall have the meaning set forth in Section 2.1.
 
Collaboration and License Agreement” shall mean that certain Collaboration and License Agreement to be entered into between the Company and the Investor contemplated by the MOU.
 
Common Stock” shall have the meaning set forth in Section 1.
 
Company” shall have the meaning set forth in the Preamble.
 
Company’s Public Filings” shall mean the Company's Annual Report on Form 10-K for the year ended December 31, 2005 and the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2006.
 
Company SEC Documents” shall have the meaning set forth in Section 3.13(b).
 
"Company Stock Options" shall have the meaning set forth in Section 3.2(c).
 
"Company Stock Plans" shall have the meaning set forth in Section 3.2(c).
 
Cross Receipt” shall mean an executed document signed by each of the Company and the Investor setting forth the Shares being purchased at the Closing and the Aggregate Purchase Price.
 
Disclosure Schedule” shall have the meaning set forth in Section 3.
 
Employee Benefit Agreement” shall mean (a) each employment, deferred compensation, severance, termination, change in control, employee benefit, loan, indemnification, retention, stock repurchase, stock option or similar agreement, commitment or obligation between the Company or any Subsidiary, on the one hand, and any Participant, on the other hand, (b) each agreement between the Company or any Subsidiary, on the one hand, and any Participant, on the other hand, the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of a transaction involving the Company of the nature contemplated by this Agreement and (c) any trust or insurance contract or other agreement to fund or otherwise secure payment of any compensation or benefit to be provided to any Participant.
 
Employee Benefit Plan” shall mean each “employee benefit plan”, as defined in ERISA, and each other plan, arrangement or policy (written or oral and whether or not terminable at will) relating to equity-based compensation, incentive compensation, deferred compensation, severance, fringe benefits, perquisites or other employee benefits, in each case maintained or contributed to, or required to be maintained or contributed to, by the Company, any Subsidiary or Common Controlled Entity, for the benefit of any Participant.
 
 
 
 
Encumbrance(s)” shall mean any security interest, pledge, mortgage, lien (including, without limitation, environmental and tax liens), charge, encumbrance, adverse claim, or restriction of any kind, including, without limitation, any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership.
 
Environmental Laws” shall have the meaning set forth in Section 3.19.
 
ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
 
"ESPP" shall have the meaning set forth in Section 3.2(c).
 
Exchange Act” shall have the meaning set forth in Section 3.13(b).
 
Financial Statements” shall have the meaning set forth in Section 3.13(a).
 
GAAP” shall have the meaning set forth in Section 3.13(a).
 
Governmental Authority” shall mean any nation or government, any federal, state, foreign, municipal, local, provincial, regional or other political subdivision thereof, and any Person exercising executive, legislative, judicial regulatory or administrative functions of or pertaining to government.
 
HSR Act” shall have the meaning set forth in Section 3.7.

Intellectual Property” shall have the meaning set forth in Section 3.9.
 
Investor” shall have the meaning set forth in the Preamble.
 
Investor Rights Agreement” shall mean that certain Investor Rights Agreement between the Company and the Investor dated as of the date hereof.
 
Key Employee” shall have the meaning set forth in Section 3.17.
 
Material Adverse Effect” shall have the meaning set forth in Section 3.1.
 
"MOU" shall mean the memorandum of understanding among the Company and the Investor (or an affiliate of the Investor) dated the date hereof.
 
Obligations” shall have the meaning set forth in Section 3.10(c).
 
Participant” shall mean any present officers, employees or directors of the Company or any Subsidiary.
 
Person” means 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 Securities Exchange Act.
 
 
 
 
Preferred Stock” shall have the meaning set forth in Section 3.2(a)(i).
 
SEC” shall have the meaning set forth in Section 3.13(b).
 
Securities Act” shall have the meaning set forth in Section 3.11.
 
Series A Preferred Stock” shall have the meaning set forth in Section 3.2(a)(i).
 
Shares” shall have the meaning set forth in Section 1.
 
Shareholder Rights Plan” shall mean the rights agreement between the Company and American Stock Transfer & Trust Company, as rights agent, dated as of November 7, 2005.
 
Subsidiary” shall mean any and all corporations, partnerships, joint ventures, associations and other entities controlled by the Company directly or indirectly through one or more intermediaries, including, without limitation, Momenta Pharmaceuticals Securities Corporation.
 
(Signature Page Follows)
 

 

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.
 
NOVARTIS PHARMA AG,
 
By
 /s/ Peter Rupprecht
 
Title:  Authorized Signatory
 
By
 /s/ Dr. Thomas Werlen
 
Name: Dr.Thomas Werlen
Title:  Authorized Signatory



MOMENTA PHARMACEUTICALS, INC.
 
By
 /s/ Alan Crane
 
Name: Alan Crane
Title:  President and CEO



 
[Signature Page to Stock Purchase Agreement]
 

 

 
 
[                  , 2006]

CROSS RECEIPT


Reference is made to the Stock Purchase Agreement, dated as of July 25, 2006 (the "Agreement"), by and between Novartis Pharma AG, a company organized under the laws of Switzerland (the "Investor"), and Momenta Pharmaceuticals, Inc., a company incorporated under the laws of Delaware (the "Company").

The Investor hereby acknowledges its receipt from the Company of 4,708,679 shares (the "Shares") of common stock of the Company, par value $0.0001 per share (the "Common Stock"), pursuant to Section 2.2(a) of the Agreement.

The Company hereby acknowledges the receipt from the Investor of $75,000,000 by wire transfer to the account specified by the Company pursuant to Section 2.2(b) of the Agreement.

This cross receipt may be executed in one or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same cross receipt.

[Signatures on the Following Page]



 
 
 
IN WITNESS WHEREOF, the Investor and the Company have each caused this cross-receipt to be signed on the date written above.


NOVARTIS PHARMA AG,
 
By
 
 
Name:Peter Rupprecht
Title: Authorized Signatory


MOMENTA PHARMACEUTICALS, INC.
 
By
 
 
Name:
Title:

EX-2 3 ex2.htm INVESTOR RIGHTS AGREEMENT Unassociated Document
 
 
Exhibit 2

 
Novartis Pharma AG
 
AND
 
Momenta Pharmaceuticals, Inc.
 

INVESTOR RIGHTS AGREEMENT
 


 




 
   
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INVESTOR RIGHTS AGREEMENT
 
THIS INVESTOR RIGHTS AGREEMENT (this “Agreement”) is made as of July 25, 2006, by and between Novartis Pharma AG (the “Investor”), a corporation organized under the laws of Switzerland, with its principal place of business at Lichtstraße 35, CH 4058 Basel BS, and Momenta Pharmaceuticals, Inc. (the “Company”), a Delaware corporation with its principal place of business at 675 West Kendall Street, Cambridge, Massachusetts 02142.
 
WHEREAS, the Company proposes to issue and sell to the Investor shares of its Common Stock, par value $0.0001 per share (the “Common Stock”), pursuant to the Stock Purchase Agreement dated as of July 25, 2006 (the “Purchase Agreement”); and
 
WHEREAS, as a condition to consummating the transactions contemplated by the Purchase Agreement, the Investor and the Company have agreed upon registration rights and certain other rights and restrictions as set forth herein.
 
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.    DefinitionsAs used in this Agreement, the following terms shall have the following meanings:
 
(a) The term “Affiliate” means, with respect to any Person, any other Person that directly or indirectly, controls, is controlled by or is under common control with such Person. For the purposes of this definition, “control” (including with correlative meanings, the terms “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.
 
(b) The term “Agreement” shall have the meaning set forth in the Preamble to this Agreement.
 
(c) The term “Collaboration and License Agreementmeans that certain Collaboration and License Agreement to be entered into between the Company and the Investor contemplated by the memorandum of understanding among the Company and the Investor (or an affiliate of the Investor) dated the date hereof.
 
(d) The term “Common Stock” shall have the meaning set forth in the recitals to this Agreement.
 
(e) The term “Demand Registration Request” has the meaning set forth in Section 7.
 
(f) The term “Effectiveness Period” has the meaning set forth in Section 3(a).
 
 

 
 
 
(g) The term “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(h) The term “Existing Registration Rights Agreement” means the Second Amended and Restated Investors’ Rights Agreement, dated as of February 27, 2004, by and among the Purchasers listed therein, the Founders listed therein and the Company, as amended by Amendment No. 1 to such Agreement dated June 10, 2004.
 
(i) The term “Holder” means the Investor for so long as it owns Registrable Shares and any Person to whom the Investor transfers Registrable Shares in accordance with the terms and conditions of this Agreement. If Registrable Shares are held by a nominee for the beneficial owner thereof, the beneficial owner thereof may, at its option, be treated as the Holder of such Registrable Shares for purposes of any request or other action by any Holder or Holders of Registrable Shares pursuant to this Agreement (or any determination of any number or percentage of shares constituting Registrable Shares held by any Holder or Holders of Registrable Shares contemplated by this Agreement), provided that the Company shall have received assurances reasonably satisfactory to it of such beneficial ownership.
 
(j) The term “Notices” has the meaning set forth in Section 21.
 
(k) The term “Investor” shall have the meaning set forth in the Preamble to this Agreement.
 
(l) The term “Person” means any individual, corporation, association, partnership, joint venture, entity, trust, estate, limited liability company, limited partnership, joint stock company, unincorporated organization or government or any agency or political subdivision.
 
(m) The term “Purchase Agreement” shall have the meaning set forth in the recitals to this Agreement.
 
(n) The terms “register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and the declaration or ordering of effectiveness of such registration statement.
 
(o) The term “Registrable Shares” means (i) the Common Stock purchased by the Investor pursuant to the Purchase Agreement and (ii) any Common Stock of the Company issued as a dividend or other distribution with respect to, or in exchange or in replacement of, such Common Stock after the date hereof; provided, however, that shares of Common Stock which are Registrable Shares shall cease to be Registrable Shares (A) upon any sale pursuant to a registration statement under the Securities Act or (B) upon any sale or transfer in any manner to a Person or entity which is not entitled, pursuant to Section 11, to the rights under this Agreement.
 
(p) The term “Rule 144” means Rule 144 promulgated under the Securities Act.
 
(q) The term “SEC” means the Securities and Exchange Commission.
 
(r) The term “Securities Act” means the Securities Act of 1933, as amended.
 
 

 
 

(s) The term Similarly Situated Person” means any third party that (i) has entered into a collaboration agreement with the Company or one of its subsidiaries that is required to be filed by the Company in accordance with Item 601 of Regulation S-K of the Securities Act and (ii) in connection with such collaboration, acquires equity securities of the Company equal to ten percent (10%) or more of the then outstanding equity securities of the Company.
 
(t) The term “Subsequent Registration” has the meaning set forth in Section 7(c).
 
(u) The term “Termination Date” means the earliest of (a) the date on which the Company (i) enters into a definitive agreement with an unaffiliated third party or parties to merge, consolidate or otherwise combine, with such third party or parties in a transaction where the holders of the Company’s outstanding shares immediately prior to such merger or consolidation would hold, in the aggregate, securities possessing less than fifty percent (50%) of the total combined voting power of the combined or surviving entity immediately after such merger or consolidation, or to sell all or substantially all of the Company’s business or assets or securities representing a majority of the then outstanding voting power of the Company’s securities, (ii) makes a public announcement that it is negotiating a transaction with an unaffiliated third party or parties covered by the foregoing clause (a)(i), or (iii) consummates a transaction with an unaffiliated third party or parties covered by the foregoing clause (a)(i); or (b) the date a third party or group (as defined above) (i) acquires beneficial ownership of voting securities (including those convertible or exchangeable into such voting securities) of the Company representing twenty percent (20%) or more of the then outstanding voting securities of the Company; or (ii) announces or commences a tender or exchange offer to acquire voting securities of the Company which, if successful, would result in such Person or group owning, when combined with any other voting securities of the Company owned by such Person or group, twenty percent (20%) or more of the then outstanding voting securities of the Company.
 
(v) The term “Valid Business Reason” has the meaning set forth in Section 7.
 
2.    Company Registration.  If (but without any obligation to do so) the Company proposes to register any of its stock or other securities under the Securities Act in connection with the public offering of such securities solely for cash, other than (a) a registration relating solely to the sale of securities to participants in a stock plan, or (b) a registration on Form S-4 (or any successor form) relating solely to a transaction pursuant to the SEC’s Rule 145, the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request of each Holder given within fifteen (15) days after receipt by such Holder of such notice by the Company in accordance with Section 21, the Company shall, subject to the provisions of Section 5, cause to be registered under the Securities Act all of the Registrable Shares that each such Holder has requested to be registered; provided, that the Company shall have the right to postpone or withdraw any registration statement relating to an offering in which the Holders are eligible to participate under this Section 2 without any liability or obligation to the Holders under this Section 2. Any Holder shall have the right to withdraw its request for inclusion of its Registrable Shares in any registration statement pursuant to this Section 2 by giving written notice to the Company of its request to withdraw; provided, however, that (i) such request must be made in writing prior to the earlier of the execution of the underwriting agreement or the execution of the custody agreement with respect to such registration and (ii) such withdrawal shall be irrevocable and, after making such withdrawal, a Holder shall no longer have any right to include Registrable Shares in the registration as to which such withdrawal was made. 
 


 
3.    Obligations of the Company. Whenever required under Section 2 or Section 7 to use its reasonable best efforts to effect the registration of any Registrable Shares, the Company shall, as expeditiously as reasonably possible:
 
(a) Prepare and file with the SEC a registration statement with respect to such Registrable Shares and use its reasonable best efforts to cause such registration statement to become and remain effective for twelve (12) months from the effective date or such lesser period until the distribution thereof has been completed (the “Effectiveness Period”).
 
(b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement.
 
(c) Furnish, without charge, to the selling Holders at least one photocopy of a signed copy, of the registration statement and any post-effective amendments thereto, including financial statements and schedules, all documents incorporated therein by reference, all exhibits (including those incorporated by reference) and any free writing prospectus utilized in connection therewith and such reasonable numbers of copies of the registration statement, each amendment and supplement thereto, each prospectus, related there to including a preliminary prospectus, related thereto in conformity with the requirements of the Securities Act, each free writing prospectus utilized in connection therewith, and such other documents as they may reasonably request in order to facilitate the disposition of such Registrable Shares owned by them.
 
(d) Use its reasonable best efforts to register and qualify the Registrable Shares covered by such registration statement under such other securities or “blue sky” laws of such states as shall be reasonably appropriate for the distribution of the securities covered by the registration statement and do any and all other acts and things which may be reasonably necessary or advisable to enable the selling Holders or underwriter, if any, to consummate the disposition of the Registrable Shares in such jurisdictions, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business, to amend its certificate of incorporation or by-laws in a manner that the Board of Directors of the Company determines is inadvisable or to file a general consent to service of process in any such states or jurisdictions, and further provided that (anything in this Agreement to the contrary notwithstanding with respect to the bearing of expenses) if any jurisdiction in which the securities shall be qualified shall require that expenses incurred in connection with the qualification of the securities in that jurisdiction be borne by selling stockholders, then such expenses shall be payable by selling stockholders on a pro rata basis, to the extent required by such jurisdiction.
 
(e) Provide a transfer agent and registrar for the Common Stock no later than the effective date of the first registration of any Registrable Shares.
 
 
 
(f) Otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC.
 
(g) Use its reasonable best efforts to cause all such Registrable Shares to be listed on a national securities exchange (if such securities are not already so listed) and on each additional national securities exchange on which similar securities issued by the Company are then listed, if the listing of such securities is then permitted under the rules of such exchange.
 
(h) Enter into such customary agreements (including an underwriting agreement in customary form) and take such other actions as the selling Holders of Registrable Shares shall reasonably request in order to expedite or facilitate the disposition of such Registrable Shares.
 
(i) (x) Make generally available to its security holders, as soon as reasonably practicable after the effective date of the registration statement (and in any event within 90 days after the end of such twelve month period described hereafter), an earnings statement (which need not be audited) covering the period of at least twelve consecutive months beginning with the first day of the Company’s first calendar quarter after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder and (y) make available for inspection by any selling Holder of Registrable Shares, by any managing underwriter participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by any such selling Holder or any such underwriter, all pertinent financial and other records and pertinent corporate documents and properties of the Company, and cause all of the Company’s officers, directors and employees to supply all information reasonably requested by any such selling Holder, underwriter, attorney, accountant or agent in connection with such registration statement.
 
(j) Use reasonable best efforts to prevent the issuance of any stop order suspending the effectiveness of such registration statement or of any order preventing or suspending the use of any preliminary prospectus and, if any such order is issued, to obtain the lifting thereof at the earliest reasonable time.
 
(k) In the case of an underwritten offering, use its reasonable best efforts to obtain an opinion from the Company’s counsel and a “cold comfort” letter from the Company’s independent public accountants in customary form and covering such matters as are customarily covered by such opinions and “cold comfort” letters delivered to underwriters in underwritten public offerings, which opinion and letter shall be reasonably satisfactory to the underwriter, if any, and furnish to each Holder participating in the offering to the extent possible and to each underwriter, if any, a copy of such opinion and letter addressed to such Holder or underwriter;
 
(l) Deliver promptly to each Holder participating in the offering and each underwriter, if any, copies of all correspondence between the SEC and the Company, its counsel or auditors and all memoranda relating to discussions with the SEC or its staff with respect to the registration statement, other than those portions of any such memoranda which contain information subject to attorney-client privilege with respect to the Company.
 
 
 
(m) Cooperate with the sellers of Registrable Shares and the managing underwriter, if any, to facilitate the timely preparation and delivery of certificates not bearing any restrictive legends representing the Registrable Shares to be sold, and cause such Registrable Shares to be issued in such denominations and registered in such names in accordance with the underwriting agreement prior to any sale of Registrable Shares to the underwriters or, if not an underwritten offering, in accordance with the instructions of the sellers of Registrable Shares at least three business days prior to any sale of Registrable Shares and instruct any transfer agent and registrar of Registrable Shares to release any stop transfer orders in respect thereof.
 
(n) Take all such other commercially reasonable actions as are necessary or advisable in order to expedite or facilitate the disposition of such Registrable Shares.
 
(o) (A) Include in such registration statement and prospectus any information or disclosure related to a Holder as a selling stockholder thereunder reasonably requested by such Holder as may be necessary in the opinion of counsel to such Holder to ensure compliance with applicable securities laws and (B) consider in good faith whether or not to include in such registration statement and prospectus any information or disclosure not related to a Holder as a selling stockholder thereunder reasonably requested by such Holder as may be necessary in the opinion of counsel to such Holder to ensure compliance with applicable securities laws.
 
(p) Take all reasonable action to ensure that any free writing prospectus prepared, authorized or approved by the Company and utilized in connection with any registration complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, and is retained in accordance with the Securities Act to the extent required thereby.
 
If the Company has delivered a prospectus to the selling Holders of Registrable Shares and after having done so such prospectus is amended to comply with the requirements of the Securities Act, the Company shall promptly notify the selling Holders of Registrable Shares and, if requested, the selling Holders of Registrable Shares shall immediately cease making offers of Registrable Shares and return all prospectuses to the Company. The Company shall promptly provide the selling Holders of Registrable Shares with revised prospectuses and, following receipt of the revised prospectuses, the selling Holders of Registrable Shares shall be free to resume making offers of the Registrable Shares.
 
No Holder shall have any right to take any action to restrain, enjoin, or otherwise delay any registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Agreement.
 
4.    Furnish Information
 
(a)  It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement with respect to the registration of any Holder’s Registrable Shares that such Holder shall take such actions and furnish to the Company such information regarding itself, the Registrable Shares held by it, and the intended method of disposition of such securities, as may then be customarily provided by selling stockholders as the Company shall reasonably request and as shall be required in connection with any registration, qualification or compliance referred to in this Agreement, including, without limitation (i) in connection with an underwritten offering, enter into an appropriate underwriting agreement containing terms and provisions then customary in agreements of that nature (it being understood that the Holders of the Registrable Shares which are to be distributed by any underwriters may, at their option, require that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement shall be conditions precedent to the obligations of such Holder), (ii) enter into such custody agreements, powers of attorney and related documents at such time and on such terms and conditions as may then be customarily required in connection with such offering and (iii) distribute the Registrable Shares only in accordance with and in the manner of the distribution contemplated by the applicable registration statement and prospectus. In addition, the Holders shall promptly notify the Company of any request by the SEC or any state securities commission or agency for additional information or for such registration statement or prospectus to be amended or supplemented.
 
 
 
(b) If any such registration statement or comparable statement under “blue sky” laws refers to any Holder by name or otherwise as the Holder of any securities of the Company, then such Holder shall have the right to require (i) the insertion therein of language, in form and substance reasonably satisfactory to such Holder and the Company, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the Company’s securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Company, or (ii) in the event that such reference to such Holder by name or otherwise is not in the judgment of the Company, as advised by counsel, required by the Securities Act or any similar federal statute or any state “blue sky” or securities law then in force, the deletion of the reference to such Holder.
 
(c) The Company covenants that (i)  so long as it remains subject to the reporting provisions of the Exchange Act, it will timely file the reports required to be filed by it under the Securities Act or the Exchange Act (including, but not limited to, the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 under the Securities Act), and (ii) will take such further action as any Holder of Registrable Shares may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Shares without registration under the Securities Act within the limitation of the exemptions provided by (A) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (B) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any Holder of Registrable Shares, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements.
 
 
(a)  In connection with any offering under Section 2 involving an underwriting of shares being issued by the Company, the Company shall not be required to include any Holder’s Registrable Shares in such underwriting unless such Holder accepts the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (and enters into an underwriting agreement with the underwriters on customary terms) (it being understood that the Holders of the Registrable Shares which are to be distributed by any underwriters may, at their option, require that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement shall be conditions precedent to the obligations of such Holder), and then only in such quantity as will not, in the reasonable opinion of the underwriters, jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Shares, requested by stockholders to be included in such offering exceeds
 
 
 
 
the amount of securities to be sold (other than by the Company) that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Shares, which the underwriters determine in their sole discretion will not jeopardize the success of the offering; provided, however, there shall first be excluded from such registration statement all shares of Common Stock sought to be included therein by (i) any director, consultant, officer, or employee of the Company or any subsidiary of the Company other than Ram Sasisekharan, Robert S. Langer, Jr., Ganesh Venkataraman and Alan L. Crane, (ii) stockholders exercising any contractual or incidental registration rights subordinate and junior to the rights of the Preferred Holders of Registrable Securities (each as defined in the Existing Registration Rights Agreement) and the Holders and (iii) stockholders who do not have contractual registration rights. If after such shares are excluded and any Registrable Shares remain to be included in the offering, the underwriters shall determine in their sole discretion that the number of securities which remain to be included in the offering exceeds the amount of securities to be sold that the underwriters determine is compatible with the success of the offering, then (a) in the context of a Section 2 offering, prior to excluding any shares for the account of one or more securityholders party to the Existing Registration Rights Agreement, the Company shall first exclude, on a pro rata basis, that number of Registrable Shares and securities to be registered for the account of holders of registration rights granted after the date hereof which the underwriters determine in their sole discretion will jeopardize the success of the offering and (b) in the context of a Section 7 offering, prior to excluding any shares for the account of any Holder, all securities to be registered for the account of holders of registration rights granted after the date hereof shall be excluded from such registration statement. Any Registrable Shares to be included in the offering shall be apportioned pro rata among the Holders providing notice of their desire to participate in the offering according to the total amount of securities entitled to be included therein owned by each selling Holder or in such other proportions as shall mutually be agreed to by such Holders. For purposes of the preceding two sentences and the last sentence of the following paragraph concerning apportionment, for any selling Holder or other stockholder which is a partnership, limited liability company or corporation, the partners, members, retired members, retired partners, and stockholders of such Holder or stockholder, or the estates and family members of any such partners, members, retired members and retired partners and any trusts for the benefit of any of the foregoing Persons shall be deemed to be a single “selling Holder” or “selling stockholder” and any pro rata reduction with respect to such “selling Holder” or “selling stockholder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “selling Holder” or “selling stockholder,” as defined in this sentence.
 
(b) If the total amount of securities requested by stockholders to be included in an offering for the account of one or more securityholders party to the Existing Registration Rights Agreement, including Registrable Shares so requested to be included in such offering, exceeds the amount of securities to be sold that the underwriters determine in their sole discretion is compatible with the success of the offering, then all Registrable Shares shall be excluded from such registration statement. Any Registrable Shares to be included in the offering shall be apportioned pro rata among the Holders providing notice of their desire to participate in the offering according to the total amount of securities entitled to be included therein owned by each selling Holder or in such other proportions as shall mutually be agreed to by such Holders.
 
 
 
(c) If, as a result of the proration provisions of this Section, any Holder shall not be entitled to include all Registrable Shares in a registration that such Holder has requested be included, such Holder may elect to withdraw its request to include Registrable Shares in such registration or may reduce the number requested to be included; provided, however, that (x) such request must be made in writing prior to the earlier of the execution of the underwriting agreement or the execution of the custody agreement with respect to such registration and (y) such withdrawal shall be irrevocable and, after making such withdrawal, such Holder shall no longer have any right to include Registrable Shares in the registration as to which such withdrawal was made.
 
(d) In connection with any underwritings of shares to be registered under Section 2, the Company shall have the right to designate the managing underwriter or underwriters.
 
6.    Company Registration Expenses.  All expenses incurred in connection with any registration pursuant to Section 2, including, without limitation, any additional registration and qualification fees and any additional fees and disbursements of counsel to the Company that result from the inclusion of securities held by the selling Holders in such registration, shall be borne by the Company. Notwithstanding the foregoing, expenses to be borne by the Company in connection with any registration pursuant to Section 2 shall exclude underwriters’ discounts and commissions and the fees and disbursements of attorneys (other than the reasonable fees and disbursements of one special counsel for the selling Holders collectively in an amount not to exceed $25,000), accountants and other agents of the Holders and those expenses set forth in Section 3(d) incurred in connection with the qualification of securities in certain jurisdictions that are required to be borne by selling stockholders.
 
 
(a) If (i) the Company shall receive a written request (specifying that it is being made pursuant to this Section 7) from one or more Holders that the Company file a registration statement on Form S-3 (or any successor form to Form S-3 regardless of its designation) (or, if the Company is not then a registrant entitled at such time to use Form S-3 (or any form to Form S-3 regardless of its designation) to register such shares, a Form S-1 (or any successor form to Form S-1 regardless of designation) for a public offering of Registrable Shares (whether by underwriting or otherwise) the reasonable anticipated aggregate price to the public of which would equal or exceed $3,000,000 (a “Demand Registration Request”), then the Company shall promptly notify all other Holders of such request and shall use its reasonable best efforts to cause all Registrable Shares that Holders, within fifteen (15) days after receipt of any such written notice, have requested be registered to be registered as soon as reasonably practicable thereafter.
 
 
 
 
(b) Notwithstanding the foregoing, (i) the Company shall not be obligated to effect a registration pursuant to Section 7(a) during the period starting with the date ninety (90) days prior to the Company’s estimated date of filing of, and ending on a date ninety (90) days following the effective date of, a registration statement pertaining to an underwritten public offering of securities for the account of the Company, provided, that the Company is actively employing in good faith its commercially reasonable efforts to cause such registration statement to become effective and that the Company’s estimate of the date of filing such registration statement is made in good faith; provided, however, that the Company shall file a registration statement upon the request of one or more Holders pursuant to Section 7(a) after ninety (90) days have elapsed after the estimated date of filing of such registration statement pertaining to an underwritten public offering of securities for the account of the Company; and provided, further, that the Company shall only be permitted to delay pursuant to this Section 7(b)(i) the filing of a registration statement requested to be filed by one or more Holders pursuant to Section 7(a) once in any 12-month period; (ii) the Company shall not be obligated to effect (x) more than three registrations pursuant to Section 7(a) on Form S-1 (or any successor form) and (y) more than two registrations pursuant to Section 7(a) in any twelve month period, and (iii) if the Company shall furnish to the Holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors it would be seriously detrimental to the Company or its stockholders for a registration statement to be filed (a “Valid Business Reason”) in the near future, then the Company’s obligation to use its reasonable best efforts to file a registration statement shall be deferred until such Valid Business Reason no longer exists; provided that Company may exercise its right to delay filing a registration statement pursuant to this Section 7(b)(iii) or to suspend the use of a prospectus included in an effective registration statement pursuant to Section 13(f) for an aggregate period not to exceed ninety (90) days in any 12-month period. The Company shall give notice of its determination to delay or suspend a registration statement and of the fact that the Valid Business Reason for such delay or suspension no longer exists, in each case, promptly after the occurrence thereof.
 
(c) If any registration statement pursuant to this Section 7 or any Subsequent Registration (as defined below) ceases to be effective for any reason at any time during the Effectiveness Period, the Company shall use reasonable best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within forty-five (45) days of such cessation of effectiveness amend such registration statement in a manner to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional registration statement, covering all of the Registrable Shares covered by such prior registration statement (a “Subsequent Registration”). If a Subsequent Registration is filed, the Company shall use reasonable best efforts to cause the Subsequent Registration to be declared effective under the Securities Act as soon as practicable after such filing and to keep such Subsequent Registration continuously effective for the remainder of the Effectiveness Period plus the number of days during which the registration statement replaced by the Subsequent Registration ceased to be effective. Notwithstanding anything to the contrary contained herein the filing by the Company of a Subsequent Registration shall not be counted for purposes of limitations on the number of registration statements the Company is required to effect pursuant to this Section 7.
 
(d) If the Company files any shelf registration statement for the benefit of the holders of any of its securities other than the Holders, the Company agrees that it shall include in such registration statement such disclosures as may be required by Rule 430B (referring to the unnamed selling security holders in a generic manner by identifying the initial offering of the securities to the Holders) in order to ensure that the Holders may be added to such shelf registration statement, if the Company so elects, at a later time through the filing of a prospectus supplement rather than a post-effective amendment.
 
(e) The Holders’ rights to registration under this Section 7 are in addition to, and not in lieu of, their rights to registration under Section 2 of this Agreement.
 
 
 
 
(a) If the Holders intend to distribute the Registrable Shares covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Section 7(a), and the Company shall include such information in its written notice referred to in Section 7(a). In such event, (i) the right of any other Holder to include its Registrable Shares in such registration pursuant to Section 2 or 7(a), as the case may be, shall be conditioned upon such other Holder’s participation in such underwriting on the terms set forth herein, and (ii) all Holders including Registrable Shares in such registration shall enter into an underwriting agreement upon customary terms with the underwriter or underwriters managing the offering on the terms set forth herein. In connection with any offering under Section 7(a) involving an underwritten registration, if the managing underwriter determines that the total amount of Registrable Shares requested by the Holders, together with other securities requested by stockholders to be included in such offering, exceeds the amount of securities that the managing underwriter determines in its reasonable judgment is compatible with the success of the offering, then the number of Registrable Shares to be included in such offering shall be allocated in accordance with the provisions of Section 5.
 
(b) In connection with any underwritings of shares to be registered under Section 7(a), a majority in interest of the Holders participating in such registration shall have the right to designate the managing underwriter or underwriters (such managing underwriter or underwriters to be reasonably acceptable to the Company).
 
9.    Expenses of Demand Registration.  All expenses incurred in connection with any registration pursuant to Section 7, including, without limitation, all registration and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company, shall be borne by the Company. Notwithstanding the foregoing, expenses to be borne by the Company in connection with any registration pursuant to Section 7 shall exclude underwriters’ discounts and commissions and the fees and disbursements of attorneys (other than the reasonable fees and disbursements of one special counsel for the selling Holders collectively in an amount not to exceed $25,000), accountants and other agents of the Holders.
 
10.    Indemnification.   In the event any Registrable Shares are included in a registration statement under this Agreement:
 
(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder owning Registrable Shares included in a registration statement pursuant to this Agreement, any underwriter (as defined in the Securities Act) for a Holder, and each Person, if any, who controls any such Holder or underwriter within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, and expenses (including reasonable fees of counsel and any amounts paid in any settlement effected with the Company’s consent) to which they may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based on (i) any untrue or alleged untrue statement of any material fact contained in any registration statement, including, without limitation, any preliminary prospectus, “issuer free writing prospectus” (as defined in the Securities Act) or final prospectus contained therein or any amendments or supplements thereto, together with the documents incorporated by reference therein, (ii) the omission or alleged omission to state therein a material fact required to be stated
 
 
therein, or necessary to make the statements therein not misleading, or (iii) any violation by the Company of the Securities Act, the Exchange Act, any state securities laws or any rule or regulation promulgated under any thereof relating to action or inaction by the Company in connection with any such registration; and will promptly reimburse each such Holder, underwriter, or controlling Person or other Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action as such expenses are incurred, provided, however, that the indemnity agreement contained in this Section 10(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement does not include a release of the Company from all liability in respect of such claim and is effected without the consent of the Company (which consent shall not be unreasonably withheld or delayed) nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it (i) arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in connection with such registration statement, preliminary prospectus, issuer free writing prospectus, final prospectus, or amendments or supplements thereto, in reliance upon and in conformity with written information furnished to the Company expressly for use in connection with such registration by or on behalf of any such Holder, underwriter or controlling Person, (ii) is caused by the failure of a Holder to deliver, at or prior to written confirmation of the sale of such securities to such Person, a copy of the preliminary prospectus, as then amended or supplemented, relating to such Registrable Shares, in connection with a purchase, if the Company had previously furnished copies thereof to such Holder or (iii) is caused by such Holder’s disposition of Registrable Shares during any period during which such Holder is obligated to discontinue any disposition of Registrable Shares under Section 13. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified party and shall survive the transfer of such securities by such Holder.
 
(b) To the extent permitted by law, each Holder owning Registrable Shares included in a registration statement pursuant to this Agreement will, severally and not jointly, indemnify and hold harmless the Company, each of its directors and officers, each underwriter (within the meaning of the Securities Act), if any, for the Company, and each Person, if any, who controls the Company or any underwriter within the meaning of the Securities Act, against any losses, claims, damages or liabilities to which the Company or any such director, officer, controlling Person or underwriter may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based on (i) any untrue statement or alleged untrue statement of any material fact contained in such registration statement, including any preliminary prospectus, issuer free writing prospectus or final prospectus contained therein or any amendments or supplements thereto or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information relating to and furnished to the Company by such Holder expressly for use in connection with such registration; and will promptly reimburse the Company or any such director, officer, controlling Person or underwriter for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 10(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement does not include a release of such Holder from all liability in respect of such claim and is effected without the consent of such Holder (which consent shall not be unreasonably withheld or delayed) and, provided, further, that no Holder shall have any liability under this Section 10(b) in excess of the net proceeds actually received by such Holder in the relevant public offering. Such indemnity and reimbursement of expenses shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified party and shall survive the transfer of such securities by such Holder.
 
 
 
 
 
(c) Promptly after receipt by an indemnified party under this Section 10 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 10, notify the indemnifying party in writing of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the indemnified parties (which consent shall not be unreasonably withheld), provided, that if in the reasonable opinion of outside counsel to any indemnified party a conflict of interest between any indemnified and indemnifying parties may exist in respect of such claim, the indemnified party shall have the right to continue its own defense of such claim and retain one firm of counsel in connection therewith and the indemnifying party shall be liable for any expenses therefor. The failure to notify an indemnifying party promptly of the commencement of any such action, if materially prejudicial to such party’s ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 10 to the extent of such material prejudice, but the omission so to notify the indemnifying party will not relieve an indemnifying party of any liability that such party may have to any indemnified party otherwise than under this Section 10.
 
(d) If the indemnification provided for in this Section 10 is required by its terms but is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party under Section 10(a) or Section 10(b) in respect of any losses, claims, damages, liabilities or expenses referred to herein, then each applicable indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of any losses, claims, damages, liabilities or expenses referred to herein (i) in such proportion as is appropriate to reflect the relative faults of the Company and the selling Holders in connection with the statements or omissions described in such Section 10(a) or Section 10(b) which resulted in such losses, claims, damages, liabilities or expenses, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative faults referred to in clause (i) above but also the relative benefits received by the Company and the selling Holders from the offering of securities as well as any other relevant equitable considerations. The respective relative benefits received by the Company and the selling Holders shall be deemed to be in the same proportion as the total price paid to the Company and the selling Holders, respectively, for the securities sold by them in the offering. The relative fault of the Company and the selling Holders shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the selling Holders and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in this Section 10, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The provisions set forth in Section 10(c) with respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 10(d); provided, however, that no additional notice shall be required with respect to any action for which notice has been given under Section 10(c) for purposes of indemnification. The Company and the selling Holders agree that it would not be just and equitable if contribution pursuant to this Section 10 were determined solely by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this Section. Notwithstanding the provisions of this Section 10(d), no Holder shall be required to contribute an amount in excess of the net proceeds actually received by such Holder in the relevant public offering, less the amount of any indemnification payment made by such indemnifying party pursuant to Section 10. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
 
 
 
(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification contained in the underwriting agreements entered into among the Holders, the Company and the underwriters in connection with an underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall be controlling as to the Registrable Shares included in the public offering.
 
(f) The indemnity and contribution agreements contained herein shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract and shall remain operative and in full force and effect regardless of any investigation made or omitted by or on behalf of any indemnified party and shall survive the transfer of the Registrable Shares by any such party.
 
(g) The indemnification and contribution required by this Section 10 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred.
 
11.    Transfer of Registration Rights.  The registration rights and obligations of the Investor under this Agreement with respect to any Registrable Shares may be transferred only to one or more Affiliates of the Investor; provided, however, that (a) the Company shall be given written notice by the Investor at the time of any permitted transfer stating the name and address of the transferee and identifying the securities with respect to which the rights and obligations under this Agreement are being assigned and (b) the transferee shall execute an agreement to be bound by the terms of this Agreement. For the avoidance of doubt, this Section 11 shall not restrict the Holders ability to sell or otherwise transfer any Registrable Shares.
 
12.    Mergers, Etc.  The Company shall not, directly or indirectly, enter into any merger, consolidation or reorganization in which the Company shall not be the surviving corporation unless the proposed surviving corporation shall, prior to such merger, consolidation or reorganization, agree in writing to assume the obligations of the Company under this Agreement to register Registrable Shares (but not any other obligations hereunder), and for that purpose references hereunder to “Registrable Shares” shall be deemed to be references to the securities which the Holders would be entitled to receive in exchange for Registrable Shares under any such merger, consolidation or reorganization; provided, however, that the provisions of this Agreement shall not apply in the event of any merger, consolidation or reorganization in which the Company is not the surviving corporation if the holders of Registrable Shares are entitled to receive in exchange therefor (i) cash or (ii) securities of the acquiring corporation which may be immediately sold to the public without registration under the Securities Act.
 
 
 
13.    Future Events.  The Company will notify each Holder participating in a registration of the occurrence of any of the following events of which the Company is actually aware, and (in the case of clauses (c) through (f) below) when so notified, each Holder will immediately discontinue any disposition of Registrable Shares until notified by the Company that such event is no longer applicable:
 
(a) when the registration statement, any pre-effective amendment, the prospectus or any prospectus supplement related thereto, any post-effective amendment to the registration statement or any free writing prospectus has been filed and, with respect to the registration statement or any post-effective amendment, when the same has become effective;
 
(b) of any request by the SEC or state securities authority for amendments or supplements to the registration statement or the prospectus related thereto or for additional information;
 
(c) if at any time the representations and warranties contemplated by any underwriting agreement, securities sale agreement or other similar agreement relating to the offering shall cease to be true and correct in all material respects;
 
(d) the issuance by the SEC or any state securities commission or agency of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings for that purpose (in which case the Company will use its reasonable best efforts to obtain the withdrawal of any such order or the cessation of any such proceedings);
 
(e) the existence of any fact which makes untrue any material statement made in the registration statement or prospectus or any document incorporated therein by reference or any free writing prospectus or the information conveyed to any purchaser at the time of sale to such purchaser or which requires the making of any changes in the registration statement or prospectus or any document incorporated therein by reference or any free writing prospectus or the information conveyed to any purchaser at the time of sale to such purchaser in order to make the statements therein not misleading (in which case the Company will use its reasonable best efforts to amend the applicable document to correct the deficiency); or
 
(f) in the event that, in the judgment of the Company, it is advisable to suspend use of a prospectus included in a registration statement due to pending material developments or other events that have not yet been publicly disclosed and as to which the Company believes public disclosure would be detrimental to the Company; provided, however, that Company may exercise its right to suspend the use of a prospectus included in an effective registration statement pursuant to this Section 13(f) or to delay filing a registration statement pursuant to Section 7(b)(iii) for an aggregate period not to exceed ninety (90) days in any 12-month period.
 
 
 
14.    Termination.  Sections 2 through 13 and Sections 15 through 17 of this Agreement shall terminate on the date on which no Holder holds any Registrable Shares. All other provisions of this Agreement shall terminate in accordance with their respective terms.
 
15.    Stand-Off Agreement.  Each Holder agrees that in the event the Company proposes to file a registration statement for an underwritten public offering of its securities, upon the request of the underwriters managing such public offering, such Holder will execute a customary lock-up agreement, whereby such Holder shall agree not to sell or otherwise dispose the Registrable Shares or other securities of the Company held by such Holder (other than as part of such registration) without the prior written consent of the underwriters for a period not to exceed ninety (90) days from the effective date of the registration; provided, however, that all officers and directors of the Company and stockholders holding in excess of 5% of the Common Stock enter into similar agreements. Any Holder receiving any written notice from the Company regarding the Company’s plans to file a registration statement shall treat such notice confidentially and shall not disclose such information to any Person.
 
16.    Other Registration Rights Agreements.  The Company agrees that if any other registration rights agreement entered into after the date of this Agreement with respect to any of its securities contains terms which are more favorable to, or less restrictive on, the other party thereto than the terms and conditions contained in Sections 2 through 10, Section 12, Section 13 and Section 15 of this Agreement are to the Holders, then the Company shall provide the Holders the option to replace the terms and conditions contained in Sections 2 through 10, Section 12, Section 13 and Section 15 of this Agreement in their entirety with the terms and conditions of such other registration right agreement relating to registration.
 
17.    Inspection.  The Company shall, upon reasonable prior notice to the Company, permit authorized representatives of the Holders (x) to visit and inspect any of the properties of the Company including its books of accounts (and to make copies thereof and take extracts therefrom), and to discuss the affairs, finances and accounts of the Company with its officers, administrative employees and independent accountants and (y) at least twice per year, to meet with the Chairman of the Company’s Board of Directors and other Directors of the Company all at the expense of the Holders and at such reasonable times and as often as may be reasonably. Investor’s right to receive the information described herein shall not apply to, and the Company have the right to omit certain information, if the Company’s Board of Directors determines that such exclusion or omission is necessary: (i) in order to preserve the Company’s attorney-client privilege; (ii) in order to fulfill the Company’s obligations with respect to confidential or proprietary information of third parties (provided that the Company shall use its commercially reasonable efforts to obtain waivers or implement requisite procedures to enable reasonable access to such information without violating such confidentiality); or (iii) because such information relates to any particular matter in which the Investor or its Affiliates have an interest that conflicts with the business of the Company. Investor agrees not to (A) use such information for any purpose other than monitoring its investment in the Company, or (B) reveal to any Person outside of Investor and its advisors any confidential information learned as a result of the rights granted by this Section 17.
 
 
 
18.    Standstill.  Except as permitted by the terms of this Agreement, the Purchase Agreement or the Collaboration and License Agreement or any other collaboration agreement between the Company or any of its subsidiaries and the Investor or any of its Affiliates, for a period commencing with the date of this Agreement and ending on the earliest of (a) the termination of the MOU (or, if later entered into, the Collaboration and License Agreement), (b) the Termination Date and (c) 24 months from the date of the Closing (as defined the Purchase Agreement), Investor shall not, without the prior written consent of the Company or the Company’s Board of Directors: (i) acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, voting securities or direct or indirect rights to acquire any voting securities of the Company (A) during such time that Investor beneficially owns (for purposes of Section 13(d) of the Exchange Act) 13.5% or more of the voting power of the Company, or (B) which when added to the Common Stock then owned by Investor and its Affiliates, would result in Investor and its Affiliates beneficially owning (for purposes of Section 13(d) of the Exchange Act) more than 13.5% of the voting power of the Company (it being understood, for the avoidance of doubt, that for purposes of this clause (i) that the Investor shall not be deemed to have acquired any such securities of the Company as the result of an acquisition of voting securities by the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by the Investor or its Affiliates to 13.5% or more of the shares of the voting securities of the Company then outstanding); (ii) make, or in any way participate, directly or indirectly, in any “solicitation” of “proxies” to vote (as such terms are used in the Exchange Act), or seek to advise or influence any Person or entity with respect to the voting of any voting securities of the Company; (iii) make any public announcement with respect to, or make any public proposal for, or public offer of (with or without conditions) any merger, business combination, recapitalization, restructuring or other extraordinary transaction involving the Company or any of its securities or material assets (it being understood that the Company’s Board of Directors may reject in its sole discretion any non public proposal or offer); (iv) form, join or in any way participate in a “group” as defined in Section 13(d)(3) of the Exchange Act in connection with any of the foregoing; (v) otherwise act or seek to control or influence the management, Board of Directors or policies of the Company (other than as contemplated by the Collaboration and License Agreement or any other collaboration agreement or undertaking, whether or not in writing, among the Company or any o its subsidiaries and the Investor or any of its Affiliates); (vi) take any action that could reasonably be expected to require the Company to make a public announcement regarding the possibility of any of the events described in clauses (i) through (v) above; or (vii) request the Company, directly or indirectly, to amend or waive any provision of this Section; provided, that the restrictions imposed by this Section 18 shall not apply to passive investments by the Investor or any of its Affiliates, or by an affiliated pension or employee benefit plan or trust, in publicly traded securities of the Company or its subsidiaries, or to interest in such securities comprising part of a broad based, publicly traded market basket or index of stock approved for any such a plan or trust in which such plan or trust invests, so long as such investments or interests (together with any securities of the Company or its subsidiaries into which such investments or interests are convertible or exchangeable) do not, in the aggregate, exceed 2% of then outstanding publicly traded securities of the Company and its subsidiaries. The Company agrees that upon publicly disclosing or filing (a) any “standstill” restrictions in respect of the Company entered into after the date of this Agreement binding upon any Similarly Situated Person or (b) any amendment to any “standstill” restrictions in respect of the Company binding upon any Similarly Situated Person, in each case, that contains terms which are more favorable to, or less restrictive on, the Similarly Situated Person than the terms and conditions contained in this Section are to the Investor, then the Company will promptly (but in any event within 4 business days) provide to the Investor an amendment to this Section 18 reflecting any such more favorable or less restrictive terms or conditions, which upon the written concurrence of the Investor shall be deemed to constitute an amendment hereof.
 
 


19.    No Required Sale.  Nothing in this Agreement shall be deemed to create an independent obligation on the part of any Holder to sell any Registrable Shares pursuant to any effective registration statement.
 
20.    Legends.  Investor agrees and consents to (a) the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of, and/or (b) the placement of legends on certificates representing Investor’s Securities held by the Investor, if necessary, with respect to the restrictions set forth in Section 11.
 
21.    NoticesUnless otherwise provided, all notices, requests, consents and other communications hereunder (“Notices”) to any party shall be given in writing and shall be deemed effectively given upon personal delivery to the party to be notified or five business days after being duly sent by first class registered or certified mail, or other courier service, postage prepaid, or the following business day after being faxed with a confirmation copy by regular mail, and addressed or faxed to the party to be notified at the address or fax number indicated for such party, as the case may be, set forth below or such other address or fax number, as the case may be, as may hereafter be designated in writing by the addressees to the addressor listing all parties:
 
To the Company:
 
Momenta Pharmaceuticals, Inc.
675 West Kendall Street
Cambridge, Massachusetts 02142
Attention:  Chief Executive Officer
Fax:  (617) 621-0431
 
With a copy (which shall not constitute notice) to:
 
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attention:   Steven D. Singer, Esq.
Fax:  (617) 526-5000

To the Investor:
 
Novartis Pharma AG
Lichtstraße 35
CH 4058 Basel BS
Attention Peter Rupprecht
Fax:  +41 61 3245372
 

 


With a copy (which shall not constitute notice) to:
 
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eight Avenue
New York, New York, 10019
Attention:  Philip A. Gelston, Esq.
Fax:  (212) 474-3700
 
22.    Miscellaneous.
 
(a)  This Agreement and the other writings referred to herein or delivered pursuant hereto which form a part hereof contain the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements or understandings, whether written or oral, with respect thereto.
 
(b)  The rights, powers and remedies of the parties under this Agreement are cumulative and not exclusive of any other right, power or remedy which such parties may have under any other agreement or law. No single or partial assertion or exercise of any right, power or remedy of a party hereunder shall preclude any other or further assertion or exercise thereof.
 
(c)  This Agreement may be amended, and compliance with any provision of this Agreement may be omitted or waived, only by the written agreement of the Company and the holders of a majority of the Registrable Shares, provided that Sections  11, 17 and 18 may be amended, and compliance thereof may be omitted or waived, only by the written agreement of the Company and the Investor.
 
(d)  This Agreement shall be governed by and construed under the laws of the State of New York (without regard to the conflict of law principles thereof). Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Federal and state courts of the State of New York in any action or proceeding arising out of or relating to this Agreement or the agreements delivered in connection herewith or the transactions contemplated hereby or thereby or for recognition or enforcement of any judgment relating thereto, and each of the parties hereby irrevocably and unconditionally (i) agrees not to commence any such action or proceeding except in such courts, (ii) agrees that any claim in respect of any such action or proceeding may be heard and determined in such courts, (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action or proceeding in such courts, and (iv) waives, to the fullest extent permitted by laws, the defense of an inconvenient forum to the maintenance of such action or proceeding in such courts. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by laws. Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 21. Nothing in this Agreement shall affect the right of any party to this Agreement to serve process in any other manner permitted by laws.
 
 
 
(e)  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT MAY INVOLVE  COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (II) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (III) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 22.
 
(f) This Agreement may be executed in any number of counterparts, each such counterpart shall be deemed to be an original instrument, and all such counterparts together shall constitute but one agreement. Any such counterpart may contain one or more signature pages. This Agreement may be executed by facsimile signature pages.
 
(g)  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
 
(h) Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice-versa. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, unless the context expressly provides otherwise. All references herein to Sections, paragraphs, subparagraphs, clauses, Exhibits or Schedules shall be deemed references to Sections, paragraphs, subparagraphs or clauses of, or Exhibits or Schedules to this Agreement, unless the context requires otherwise. Unless otherwise specified, the words “herein”, “hereof”, “hereto” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement. The term “or” is not exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”. The phrase “date hereof” or “date of this Agreement” shall be deemed to refer to July 25, 2006. Any contract, instrument or law defined or referred to herein or in any contract or instrument that is referred to herein means such contract, instrument or law as from time to time amended, modified or supplemented, including (in the case of contracts or instruments) by waiver or consent and (in the case of laws) by succession of comparable successor laws and references to all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns.
 
(i)  If one or more provisions of this Agreement are held to be unenforceable under applicable law, in any jurisdiction, such provision shall be ineffective, as to such jurisdiction, and the balance of the Agreement shall be interpreted as if such provision were so excluded, without invalidating the remaining provisions of this Agreement and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
 
 
 
(j)  Neither this Agreement nor any of the rights, interests or obligations under this Agreement (except as specifically provided in Section 11 of this Agreement) may be assigned or delegated, in whole or in part, by operation of law or otherwise by the Investor or any Holder without the prior written consent of the Company, and any such assignment without such prior written consent shall be null and void. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns.
 
(k)  The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or was otherwise breached. In addition to any and all other remedies that may be available at law in the event of any breach of this Agreement, the parties shall be entitled to specific performance of the agreements and obligations hereunder and to such other injunctive or other equitable relief as may be granted by a court of competent jurisdiction. Each party further agrees that, in the event of any action for an injunction or other equitable remedy in respect of such breach or enforcement of specific performance, it will not assert the defense that a remedy at law would be adequate.
 
(l)  The Company hereby represents that the rights granted to the Holders of Registrable Shares hereunder do not in any way conflict with and are not inconsistent with any other agreements to which the Company is a party or by which it is bound relating to the subject matter hereof.
 
(Signature Page Follows)
 




IN WITNESS WHEREOF, the parties have executed and delivered this Investor Rights Agreement as of the date first above written.
 
NOVARTIS PHARMA AG,
 
 
By
 /s/ Peter Rupprecht
 
Title:  Authorized Signatory
 
By
 /s/ Dr. Thomas Werlen
 
Name: Dr.Thomas Werlen
Title:  Authorized Signatory



MOMENTA PHARMACEUTICALS,
INC.
 
By
 /s/ Alan Crane
 
Name:  Alan Crane
Title:  President and CEO
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Signature Page Investor Rights Agreement
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