Exhibit 10.2
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 15, 2004
BY AND BETWEEN
CANCERVAX CORPORATION
AND
SERONO B.V.
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of December
15, 2004, is made by and between CancerVax Corporation, a Delaware corporation
("CancerVax"), and Serono B.V., a Netherlands corporation ("Serono"). CancerVax
and Serono may each be referred to as a "Party" or together, the "Parties".
RECITALS
WHEREAS, concurrently with the execution of this Agreement, CancerVax,
Serono and certain other parties are entering into a Third Amended and Restated
Investors' Rights Agreement (the "Registration Rights Agreement"), and CancerVax
and an Affiliate of Serono are entering into a Collaboration and License
Agreement (the "Collaboration Agreement" and together with this Agreement, the
"Transaction Agreements"); and
WHEREAS, it is contemplated by the Collaboration Agreement that
CancerVax issue and sell to Serono, and Serono purchase, shares of Common Stock
(as defined below) of CancerVax pursuant to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, covenants and agreements contained herein, CancerVax and
Serono, intending to be legally bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, in addition to the other terms defined
elsewhere in this Agreement (as set forth in the chart below), the following
initially capitalized terms, whether used in the singular or plural, shall have
the following meanings:
1.1 "Affiliate" means any Person directly or indirectly controlled
by, controlling, or under common control with, a Person, but only for so long as
such control shall continue. For purposes of this definition, "control"
(including, with correlative meanings, "controlled by", "controlling," and
"under common control with") means, with respect to a Person, possession,
directly or indirectly, of (a) the power to direct or cause direction of the
management and policies of such Person (whether through ownership of securities
or partnership or other ownership interests, by contract or otherwise) or (b) at
least fifty percent (50%) of the voting securities (whether directly or pursuant
to any option, warrant or other similar arrangement) or other comparable equity
interests of such Person. For the avoidance of doubt, neither of the Parties
shall be deemed to be an Affiliate of the other.
1.2 "Business Day" means any day that is not a Saturday, Sunday,
or a day on which banking institutions in Carlsbad, California or The
Netherlands are authorized or required by Law to be closed for business.
1.3 "Change in Control" shall be mean the occurrence of any of the
following events: (a) if a Party sells, conveys or otherwise disposes of all or
substantially all of its assets, (b) if a Party merges or consolidates with, or
is acquired by, any other corporation or business entity or
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effects any other transaction or series of transactions the result of which is
that shareholders of such Party immediately prior to such transaction or the
first of such series of transactions do not own at least fifty percent (50%) of
the outstanding voting power of the surviving corporation immediately after the
completion of such transaction or the last of such series of transactions, (c) a
Person, together with its Affiliates, becoming the direct or beneficial owner of
fifty percent (50%) or more of the combined voting power of the outstanding
securities or outstanding shares of common stock of such Party, or (d) if a
Party effects any other transaction or series of transactions in which the
members of the Board of Directors of such Party prior to the transaction or the
first of such series of transactions constituting the putative Change in Control
event (the "Continuing Directors"), together with any members of the Board of
Directors appointed by the Continuing Directors, do not constitute a majority of
the members of the Board of Directors of the enterprise following completion of
the transaction or the last of such series of transactions constituting the
putative Change in Control event.
1.4 "Environmental Permits" shall mean all permits, licenses,
approvals, authorizations, consents or registrations required under applicable
environmental Laws.
1.5 "Governmental Authority" means any applicable United States
government authority, court, tribunal, arbitrator, agency, legislative body,
commission, or any state, province, county, city or other political subdivision
thereof.
1.6 "Knowledge" means, with respect to a matter that is the
subject of a given representation or warranty, the knowledge, information or
belief that the executive officers of CancerVax, have (or should reasonably
have) after making reasonable inquiry into the relevant subject matter.
1.7 "Laws" or "Law" means all applicable laws, statutes, rules,
regulations, ordinances and other pronouncements having the binding effect of
law of any Governmental Authority.
1.8 "Material Adverse Effect" means any state of facts, event,
change, development, effect, condition, occurrence, non-occurrence, or
circumstance that, individually or in the aggregate (taking into account all
other such states of fact, events, conditions, non-occurrences or circumstances)
(a) give rise to or could reasonably be expected to give rise to a material
adverse effect on the business, condition (financial or otherwise), results of
operations, properties or assets of CancerVax or its subsidiaries, or (b)
prevents or materially impedes the consummation of the transactions contemplated
by the Transaction Agreements.
1.9 "Person" means any natural person, corporation, general
partnership, limited partnership, joint venture, proprietorship, or other
business organization.
1.10 "SEC" means the U.S. Securities and Exchange Commission.
1.11 Other Terms.
"Act" shall have the meaning set forth in Section 3.19.1.
"Agreement" shall have the meaning set forth in the first paragraph of this
Agreement.
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"Action" shall have the meaning set forth in Section 3.7.
"CancerVax" shall have the meaning set forth in the first paragraph of this
Agreement.
"CancerVax Financial Statements" shall have the meaning set forth in Section
3.19.2.
"CancerVax SEC Documents" shall have the meaning set forth in Section 3.19.1.
"CancerVax Indemnified Parties" shall have the meaning set forth in Section
6.1.2.
"Closing" shall have the meaning set forth in Section 2.3.
"Closing Date" shall have the meaning set forth in Section 2.3.
"Collaboration Agreement" shall have the meaning set forth in the Recitals.
"Common Stock" shall have the meaning set forth in Section 3.2.
"Exchange Act" shall have the meaning set forth in Section 3.19.
"Lock-up Period" shall have the meaning set forth in Section 5.2.
"Parties" and "Party" shall have the meaning set forth in the first paragraph of
this Agreement.
"Purchase Price" shall have the meaning set forth in Section 2.1.
"Registration Rights Agreement" shall have the meaning set forth in the
Recitals.
"Rights" shall have the meaning set forth in Section 3.8.
"Rule 144" shall have the meaning set forth in Section 5.1.
"Purchased Stock" shall have the meaning set forth in Section 2.1.
"Serono" shall have the meaning set forth in the first paragraph of this
Agreement.
"Serono Indemnified Parties" shall have the meaning set forth in Section 6.1.1.
"Third Quarter 10-Q" shall have the meaning set forth in Section 3.8.
"Transaction Agreements" shall have the meaning set forth in the Recitals.
"2003 Annual Report" shall have the meaning set forth in Section 3.8.
ARTICLE 2
PURCHASE AND SALE OF COMMON STOCK
2.1 Issuance of Common Stock. Subject to the terms and conditions
of this Agreement, on the Closing Date, CancerVax shall issue and sell to
Serono, and Serono shall purchase, 1,000,000 shares of Common Stock (the
"Purchased Stock") at a purchase price per share of Twelve United States dollars
(U.S. $12.00), for an aggregate purchase price of Seventeen Million and Four
United States dollars (U.S. $12,000,000) (the "Purchase Price").
2.2 Conditions to Closing. The obligations of each Party to
consummate and effect this Agreement and the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions, unless otherwise waived in writing: (a) contemporaneously
with the Closing hereof the other Party (or in the case of Serono, Serono and
Serono's Affiliate) shall deliver each of the other Transaction Agreements, duly
executed by it, (b) CancerVax, Serono and holders of 60% in interest of
Registrable Securities (as such term is defined in the Registration Rights
Agreement) shall have executed the Registration Rights Agreement, and (c) Serono
shall have received an opinion of Xxxxxx & Xxxxxxx LLP, counsel to CancerVax,
dated the Closing Date, in the form attached hereto as Exhibit A.
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2.3 Closing. The purchase and sale of the Purchased Stock (the
"Closing") shall occur at CancerVax's offices at 0000 Xxxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxx, 00000, XXX, on the date hereof unless the conditions to closing set
forth in Section 2.2 shall not have been satisfied or waived, and in such event
the Closing shall occur two (2) Business Days after the date on which such
conditions are satisfied or waived (unless otherwise agreed to by the Parties).
The date on which the Closing occurs is referred to herein as the "Closing
Date".
2.4 Delivery.
2.4.1 Purchase Price. At the Closing, Serono shall deliver
to CancerVax the Purchase Price by wire transfer of same day funds to the bank
account designated by CancerVax to Serono.
2.4.2 Stock Certificate. At promptly as practicable
following the Closing, CancerVax shall deliver to Serono a stock certificate,
registered in Serono's name, representing the Purchased Stock and bearing the
legends required by Section 5.3.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF CANCERVAX
As a material inducement to Serono to enter into this Agreement,
CancerVax hereby represents and warrants to Serono as of the date hereof and
makes such representation and warranty as of the Closing Date as follows:
3.1 Organization. CancerVax is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware.
Except as set forth on Exhibit 21 to the 2003 Annual Report and except for the
CancerVax Research Foundation, CancerVax has no subsidiaries and does not own or
control, directly of indirectly, any shares of capital stock of any other
corporation or any interest in any partnership, limited liability company,
association, joint venture or other non-corporate business enterprise. CancerVax
owns (directly or indirectly) all of the capital stock of each of its
subsidiaries free and clear of any lien, charge, security interest, encumbrance,
right of first refusal or other restriction and all the issued and outstanding
shares of capital stock of each subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights. CancerVax has
all requisite corporate power and authority to own and operate its properties
and assets, to carry on its business as now conducted and as proposed to be
conducted in the CancerVax SEC Documents, to enter into this Agreement, to issue
and sell the Purchased Stock and to carry out the other transactions
contemplated by this Agreement. CancerVax is qualified to transact business and
is in good standing in each jurisdiction in which the character of the
properties and assets owned, leased or operated by CancerVax or the nature of
the business conducted by CancerVax makes such qualification necessary, except
as would not reasonably be expected to have a Material Adverse Effect. CancerVax
has furnished to Serono complete and accurate copies of its certificate of
incorporation and bylaws, each as amended to date and presently in effect.
3.2 Capitalization. The authorized capital of CancerVax as of
December 13, 2004 consists of 75,000,000 shares of common stock, par value
$0.00004 per share (the "Common Stock"), of which 26,797,112 shares are issued
and outstanding, and 10,000,000 shares of preferred stock (of which 75,000
shares are designated as Series A Junior Participating Preferred
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Stock), none of which are issued and outstanding. Except as disclosed in filings
CancerVax has made under the Exchange Act or the Act or as provided in the
Transaction Agreements, there are not, nor upon the consummation of the
transactions contemplated hereby shall there be (a) any outstanding options,
calls, warrants, rights (including conversion or preemptive rights and rights of
first refusal) or agreements pursuant to which CancerVax is or may become
obligated to issue, sell or repurchase, or offer to issue, sell or repurchase,
any shares of its capital stock or any other securities of CancerVax or (b) any
restrictions on the transfer of capital stock of CancerVax other than pursuant
to state and federal securities Laws. Except as set forth in the CancerVax SEC
Documents, CancerVax is not a party to any agreement or understanding relating
to the voting of shares of capital stock of CancerVax or, to the Knowledge of
CancerVax, is there any agreement or understanding relating to the giving of
written consents by a stockholder or director of CancerVax. To the Knowledge of
CancerVax, Schedule A to the Registration Rights Agreement sets forth the number
of "Registrable Securities" (as such term is defined in the Registration Rights
Agreement) as of the date hereof.
3.3 Authorization. Except for the approval of the holders of
Registrable Securities required by Section 4.7 of CancerVax's Second Amended and
Restated Investors' Rights Agreement (which CancerVax represents and warrants,
as of the Closing Date, have been obtained), all corporate action on the part of
CancerVax, its directors and stockholders necessary for the authorization,
execution and delivery of this Agreement and the Registration Rights Agreement
and the performance of all obligations of CancerVax hereunder and thereunder,
including the authorization, issuance and delivery of the Purchased Stock, has
been taken. Each of this Agreement and the Registration Rights Agreement have
been duly executed and delivered by CancerVax and constitutes a legal, valid and
binding obligation of CancerVax, enforceable against CancerVax in accordance
with its terms, except as such enforceability may be limited (a) by applicable
insolvency and other Laws affecting creditors' rights generally, (b) by general
principles of equity that restrict the availability of equitable remedies, or
(c) to the extent that the unenforceability of indemnification provisions may be
limited by applicable Laws or public policy.
3.4 No Conflicts. The execution, delivery and performance of this
Agreement and compliance with the provisions thereof by CancerVax do not and
shall not (a) violate any provision of Law, or any ruling, writ, injunction,
order, permit, judgment or decree of any Governmental Authority binding upon
CancerVax, except where such violation would not reasonably be expected to have
a Material Adverse Effect, (b) constitute a breach of or default under (or an
event that, with notice or lapse of time or both, would become a default) or
conflict with, or give rise to any right of termination, cancellation or
acceleration of, any agreement, arrangement or instrument, by which CancerVax or
any of its subsidiaries or any of their respective properties and assets are
bound, except where such breach, default or conflict would not reasonably be
expected to have a Material Adverse Effect, (c) result in the creation or
imposition of any lien, security interest, charge or encumbrance of any kind
upon any of the material properties or assets of CancerVax or (d) violate or
conflict with any of the provisions of CancerVax's or its subsidiaries'
certificate of incorporation, bylaws or other organizational documents as in
effect on the date hereof.
3.5 No Governmental Authority or Third Party Consents. Except for
the approval of the holders of Registrable Securities required by Section 4.7 of
CancerVax's Second Amended
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and Restated Investors' Rights Agreement, no consent, approval, authorization or
other order of any Governmental Authority or other third party is required to be
obtained by CancerVax or its subsidiaries in connection with the authorization,
execution, delivery and performance of this Agreement or the Registration Rights
Agreement or with the authorization, issue and sale of the Purchased Stock, and
consummation by CancerVax of any of the transactions contemplated hereby other
than such filings as may be required to be made with the SEC and with any state
blue sky or securities regulatory authority.
3.6 Valid Issuance of Purchased Stock. When issued, sold and
delivered in accordance with the terms hereof for the consideration expressed
herein, and assuming the accuracy of Serono's representations set forth in
Section 4, the Purchased Stock shall be duly authorized, validly issued, fully
paid and nonassessable and free and clear of all liens, encumbrances, charges,
claims, security interests of any nature whatsoever, or restrictions on
transfer, including preemptive rights, rights of first refusal or other similar
rights, other than restrictions on transfer under the Transaction Agreements and
under federal, state and foreign securities Laws.
3.7 Litigation. There is no action, suit, proceeding or
investigation pending or, to the Knowledge of CancerVax, threatened against
CancerVax, its subsidiaries or their respective properties or that CancerVax or
its subsidiaries intend to initiate before any Governmental Authority
(collectively, an "Action") that (a) questions the legality, validity or
enforceability of this Agreement, the legality or validity of the Purchased
Stock or the right of CancerVax to enter into this Agreement, or to consummate
the transactions contemplated hereby, and (b) except for such Actions that are
not set forth in the CancerVax SEC Documents, if determined adversely will, or
would reasonably be expected to have, a Material Adverse Effect. CancerVax and
its subsidiaries are not and have not been the subject of any Action involving a
claim of violation of, or liability under, federal or state securities Laws nor
has there been and there is not pending, or to the Knowledge of CancerVax,
threatened, any investigation by the SEC involving CancerVax or its
subsidiaries. To the Knowledge of CancerVax, and except as would not reasonably
be expected to have a Material Adverse Effect, no current or former director or
officer of CancerVax is or has been the subject of any Action involving a claim
of violation of, or liability under, federal or state securities Laws or a claim
of a breach of fiduciary duty, nor has there been and there is not pending or
threatened, any investigation by the SEC involving any current or former
director or officer of CancerVax. The SEC has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by
CancerVax or its subsidiaries under the Exchange Act or the Act.
3.8 Intellectual Property. To its Knowledge, CancerVax has all
licenses, patents, copyrights, trademarks, trade names, trade secrets and other
proprietary rights (collectively "Rights") necessary to permit it to own and
operate its properties and assets and to conduct its business as described in
CancerVax's annual report on Form 10-K for the twelve (12) month period ended
December 31, 2003 (the "2003 Annual Report") and CancerVax's quarterly report on
Form 10-Q for the quarterly period ended September 30, 0000 (xxx "Xxxxx Xxxxxxx
00-X") or as presently conducted, except where such failure to have such Rights
would not reasonably be expected to have a Material Adverse Effect. Except as
disclosed in the 2003 Annual Report and the Third Quarter 10-Q, or as would not
reasonably be expected to have a Material Adverse Effect, (a) all of the Rights
held by CancerVax are in full force and effect, and CancerVax has
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taken all reasonable action to maintain and protect such Rights, (b) there are
no outstanding violations, notices of noncompliance, judgments, consent decrees,
orders or judicial or administrative actions, or, to CancerVax's Knowledge,
investigations or proceedings, adversely affecting any of such Rights, (c) the
Rights are not subject to any pending, or to CancerVax's Knowledge, threatened,
adverse claims against or disputes with respect to any of such Rights, (d) to
CancerVax's Knowledge, the conduct of CancerVax's business as described in the
2003 Annual Report and the Third Quarter 10-Q, or as presently conducted, does
not involve infringement, violation or misappropriation of any patent,
trademark, trade name, copyright, trade secret, license, ownership or similar
right of any third party, and (e) to CancerVax's Knowledge, no condition exists
and no event has occurred which (whether with or without notice, lapse of time
or the occurrence of any other event) would permit the suspension or revocation
of any such Rights other than by expiration of the term set forth therein.
3.9 Permits. CancerVax has all franchises, permits, licenses, and
any similar authority necessary for the conduct of its business as now being
conducted by it, except where the failure to have such franchises, permits,
licenses, or similar authority would not reasonably be expected to have a
Material Adverse Effect.
3.10 Compliance with other instruments. CancerVax is not in
violation of or default under (a) any bond, debenture, note or other evidence of
indebtedness, or any lease, indenture, mortgage, deed of trust, loan agreement,
joint venture or other agreement or instruments to which CancerVax is a party or
by which it or its properties are bound, nor is any such agreement or instrument
subject to termination, cancellation, modification or acceleration of any
obligation thereunder (with or without notice or the passage of time or
otherwise), except where such violation, default, termination, cancellation,
modification or acceleration would not reasonably be expected to have a Material
Adverse Effect, and (b) its certificate of incorporation or bylaws. All such
bonds, debentures, notes or other evidence of indebtedness, or any lease,
indenture, mortgage, deed of trust, loan agreement, joint venture or other
agreement or instruments are in full force and effect and are valid, binding and
enforceable in accordance with their terms, except where such failure to be in
full force and effect or failure to be valid, binding and enforceable agreements
or instruments would not reasonably be expected to have a Material Adverse
Effect.
3.11 Title to Property and Assets. CancerVax and its subsidiaries
have good and sufficient title to all real properties and assets reflected in
the CancerVax Financial Statements or acquired by CancerVax after the date of
such CancerVax Financial Statements (except as sold or otherwise disposed of in
the ordinary course of business), in each case free and clear of all mortgages,
liens, loans and encumbrances, except such encumbrances and liens that arise in
the ordinary course of business and do not impair CancerVax and it subsidiaries'
respective ownership or use of such property or assets, except where the failure
to have such good and sufficient title would not reasonably be expected to have
a Material Adverse Effect, or except as set forth in the CancerVax SEC filings.
With respect to the property and assets it leases, CancerVax is in compliance
with such leases and holds a valid leasehold interest free of any liens, claims
or encumbrances, except where the failure to be in compliance or hold a valid
leasehold interest would not reasonably be expected to have a Material Adverse
Effect.
3.12 Laws and Environmental Laws. CancerVax is and has been in
compliance with all Laws applicable to its business, properties and assets,
except where the failure to be in compliance would not reasonably be expected to
have a Material Adverse Effect. CancerVax is
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and has been in compliance with all Environmental Laws and has obtained all
necessary Environmental Permits, all of which are in full force and effect, and
no event or condition has occurred that may interfere in any respect with the
compliance by CancerVax with any Environmental Law or that may give rise to any
liability under any Environmental Law, except as would not reasonably be
expected to have a Material Adverse Effect. CancerVax has not received any oral
or written notice, claim, demand, suit or request for information from any
Governmental Authority with respect to any liability or alleged liability under
any Environmental Law, except as would not reasonably be expected to have a
Material Adverse Effect.
3.13 Tax Returns, Payments and Elections. CancerVax and its
subsidiaries have filed all material tax returns and reports (including
information returns and reports) as required by law, and such returns and
reports are true and correct in all material respects. CancerVax has paid all
taxes due and any assessments received by it, except any such tax, the validity
or amount of which is being contested in good faith by appropriate proceedings
and as to which CancerVax has set aside on its books adequate reserves with
respect thereto in accordance with generally accepted accounting principles.
CancerVax has not executed any waiver of any statute of limitations on the
assessment or collection of any tax or governmental charge that is currently in
effect. CancerVax has made adequate provisions on its books of account for all
taxes, assessments and governmental charges with respect to its business,
properties and operations. CancerVax has not received any notice of audit,
proposed adjustment or deficiency from any taxing authority, except as would not
reasonably be expected to have a Material Adverse Effect.
3.14 Employment and Labor Matters. CancerVax is in compliance with
applicable Laws regarding employment, wages, hours, equal opportunity,
collective bargaining and payment of social security and other taxes, except
where the failure to be in compliance would not reasonably be expected to have a
Material Adverse Effect. CancerVax is in compliance with all applicable Laws and
regulations regarding occupational safety and health standards, and has received
no complaints from any Governmental Authority alleging violations of any such
Laws and regulations, except in such cases that would not reasonably be expected
to have a Material Adverse Effect.
3.15 Payments; Political Contributions. Neither CancerVax nor, to
the Knowledge of CancerVax, any of the officers, directors, employees, agents or
other representatives of CancerVax or any other business entity or enterprise
with which CancerVax is or has been affiliated or associated has, directly or
indirectly on behalf of CancerVax, made or authorized any payment, contribution
or gift of money, property, or services (a) as a kickback or bribe to any person
or (b) except as permitted by Law, to any political organization, or the holder
of or any aspirant to any elective or appointive public office.
3.16 Insurance. CancerVax, its subsidiaries and its properties are
insured in such amounts, against such losses and with such insurers as CancerVax
and its Board of Directors reasonably believe are appropriate in light of the
nature of the properties and businesses of CancerVax. No notice of any
termination or threatened termination of any of insurance policies of CancerVax
in effect on the date hereof has been received and such policies are in full
force and effect.
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3.17 Full Disclosure. The representations and warranties of
CancerVax in this Agreement and the schedules, certificates and exhibits
furnished to Serono by or on behalf of CancerVax in connection herewith did not
and do not contain any untrue statement of a material fact and did not and do
not omit to state any material fact necessary to make the statements herein or
therein not misleading. CancerVax hereby acknowledges that Serono is relying on
CancerVax's representations, warranties and covenants contained herein in making
an investment decision with respect to the Purchased Stock and will be relying
thereon in connection with any transfer of the Purchased Stock to its
Affiliates.
3.18 Independent Accountants. To the Knowledge of CancerVax, Ernst
& Young LLP, who has certified certain financial statements of CancerVax, is an
independent public accountant as required by the Act.
3.19 CancerVax SEC Documents; Financial Statements; Listing.
3.19.1 SEC Filings. CancerVax has filed with the SEC all
required reports, schedules, forms, statements and other documents (including
exhibits and all other information incorporated therein) required by the
Exchange Act ("CancerVax SEC Documents"). As of their respective filing dates,
each of the CancerVax SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933, as amended (the "Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules
and regulations of the SEC promulgated thereunder, in each case to the extent
applicable to such CancerVax SEC Documents.
3.19.2 CancerVax Financial Statements. The financial
statements of CancerVax for the year ended December 31, 2003, including the
footnotes thereto, included in the 2003 Annual Report, and the financial
statements, including the footnotes thereto, included in the Third Quarter 10-K
(collectively, the "CancerVax Financial Statements") have been prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis during the period(s) involved (except as may be indicated
in the notes thereto; and subject, in the case of financial statements included
in the Third Quarter 10-Q, to the absence of footnote disclosure and normal
year-end adjustments) and fairly and accurately present the financial position
of CancerVax as of the dates thereof and the results of its operations and cash
flows for the periods specified therein. Except as set forth in the CancerVax
SEC Documents, CancerVax has no liabilities, whether absolute or accrued,
contingent or otherwise, other than liabilities incurred in the ordinary course
of business subsequent to the date of the most recent balance sheet contained in
the CancerVax SEC Documents.
3.19.3 Listing. CancerVax's Common Stock is listed on the
Nasdaq National Market and CancerVax has taken no action designed to, or that is
likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act or delisting the Common Stock from the Nasdaq National
Market. CancerVax has not received any notification that, and has no Knowledge
that, the National Association of Securities Dealers Inc. is contemplating
terminating such listing. The issuance and sale of the Purchased Stock pursuant
to this Agreement does not require stockholder approval under, or otherwise
contravene, the rules and regulations of the Nasdaq National Market.
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3.20 Absence of Changes. Since December 31, 2003, and except as set
forth in the CancerVax SEC documents, (a) there has been no event, occurrence or
development that, individually or in the aggregate, has had or would reasonably
be expected to have a Material Adverse Effect, (b) CancerVax has not incurred
any liabilities (contingent or otherwise) other than (i) trade payables and
accrued expenses incurred in the ordinary course of business consistent with
past practice and (ii) liabilities not required to be reflected in the
CancerVax's financial statements pursuant to United States generally accepted
accounting principles or required to be disclosed in filings made with the SEC,
(c) CancerVax has not altered its method of accounting or the identity of its
auditors, (d) CancerVax has not declared or made any dividend or distribution of
cash or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock, and (e)
CancerVax has not issued any equity securities to any officer, director or
Affiliate, except pursuant to CancerVax's existing employee benefits plans.
3.21 Offering. Subject to the accuracy of Serono's representations
set forth in Section 4, the offer, sale and issuance of the Purchased Stock will
be exempt from the registration requirements of the Act and will have been
registered or qualified from all applicable state registration or qualification
requirements.
3.22 Brokers' or Finders' Fees. No broker, finder, investment
banker or other Person retained or engaged by CancerVax is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SERONO
Serono hereby represents and warrants as of the date hereof as follows:
4.1 Organization. Serono is a corporation duly organized, validly
existing and in good standing under the Laws of The Netherlands. Serono has all
requisite corporate power and corporate authority to enter into this Agreement,
to purchase the Purchased Stock and to carry out the other transactions
contemplated under this Agreement.
4.2 Authorization. All corporate action on the part of Serono, its
directors and stockholders necessary for the authorization, execution and
delivery of this Agreement, the performance of all obligations of Serono
hereunder, including the subscription and purchase of the Purchased Stock, has
been taken. This Agreement has been duly executed and delivered by Serono and
constitutes a legal, valid and binding obligation of Serono, enforceable against
Serono in accordance with its terms, except as such enforceability may be
limited (a) by applicable insolvency and other laws affecting creditors' rights
generally, (b) by general principles of equity that restrict the availability of
equitable remedies, or (c) to the extent the unenforceability of indemnification
provisions may be limited by applicable laws or public policy.
4.3 Purchase Entirely for Own Account. The Purchased Stock is
being acquired for investment for Serono's own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and Serono has no present intention of selling, granting any participation in or
otherwise distributing the Purchased Stock. Serono does not have any
10
contract, undertaking, agreement or arrangement with any Person to sell,
transfer or grant participation in any of the Purchased Stock. Serono was not
organized for the purpose of acquiring or holding the Purchased Stock.
4.4 Investment Experience and Accredited Investor Status. Serono
is an "accredited investor" (as defined in Regulation D under the Act). Serono
has received or has had full access to all the information, and has had the
opportunity to ask the questions and has received the answers, as Serono
considers necessary or appropriate to make an informed investment decision with
respect to the Purchased Stock. Serono understands that the purchase of the
Purchased Stock involves substantial risk. Serono has sufficient knowledge and
experience in financial or business matters such that it is capable of
evaluating the merits and risks of its investment in the Purchased Stock, and is
capable of bearing the economic risks of such investment.
4.5 Brokers' or Finders' Fees. No broker, finder, investment
banker or other Person retained or engaged by Serono is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement.
ARTICLE 5
SECURITIES LAW MATTERS AND OTHER AGREEMENT OF THE PARTIES
5.1 Restricted Securities. Serono understands that the Purchased
Stock, when issued, shall be "restricted securities" under the federal
securities Laws inasmuch they are being acquired from CancerVax 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 Act
only in certain limited circumstances. In this connection, Serono represents
that it is familiar with Rule 144 of the Act, as presently in effect ("Rule
144"), and understands the resale limitations imposed thereby and by the Act.
5.2 Limitations on Dispositions. For a period of eighteen (18)
months from the Closing Date (the "Lock-up Period"), Serono shall not make any
disposition of all or any portion of the Purchased Stock (including, for
purposes of this Section 5.2, any shares of Common Stock issued or issuable in
respect of the Purchased Stock), except upon CancerVax's prior written consent,
such consent to be given or withheld in CancerVax's sole discretion; provided,
however, that this Section 5.2 shall not apply to transfers or dispositions by
Serono to any Affiliate; provided, that any such Affiliate agrees in writing to
be bound by the same restrictions on disposition as set forth in this Section
5.2. Following the expiration of the Lock-up Period, Serono may divest itself of
all or a portion of the Purchased Stock; provided, that Serono, for so long as
it beneficially owns more than two percent (2%) of the outstanding Common Stock
of CancerVax, will not sell a number of shares of Purchased Stock in any one
week period that is greater than fifty percent (50%) of the average weekly
trading volume of the Common Stock (during the immediately preceding four (4)
week period) on the public securities market on which such shares are then
traded. This Section 5.2 will terminate and be of no force and effect: (a) upon
the termination of any of the Transaction Agreements (except if terminated by
CancerVax in accordance with any such Transaction Agreement) or (b) immediately
prior to a Change in Control of CancerVax (including pursuant to a tender or
exchange offer). After the termination of the Lock-up Period, Serono agrees to
make any disposition of the Purchased Stock in accordance with applicable Law.
11
5.3 Legends. The certificates representing the Purchased Stock
shall bear the following legend and any legend required by applicable state
securities Laws or equivalent foreign laws until such time as such legends shall
no longer apply:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO
CANCERVAX THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
ACT."
The foregoing legend shall be removed from the certificates representing the
Purchased Stock at the request of the holder thereof, at such time as they
become eligible for resale under the Act.
5.4 Form D. CancerVax agrees to timely file a Form D with respect
to the Purchased Stock as required under Regulation D after the Closing.
5.5 Information. Serono shall promptly provide to CancerVax any
information in respect of Serono or the Purchased Stock as CancerVax may
reasonably request in order to comply with CancerVax's obligations under
applicable federal and state securities Laws.
5.6 Securities Laws Disclosure; Publicity. Except as otherwise
required by Law or provided in the Collaboration Agreement, neither CancerVax
nor Serono shall issue any press releases with respect to the transactions
contemplated hereby without the prior written consent of the other party, which
consent shall not be unreasonably withheld or delayed. CancerVax shall not
publicly disclose the name of Serono or its Affiliates, or include the name of
Serono or its Affiliates in any filing with the SEC or any regulatory agency or
trading market, without the prior written consent of Serono, except to the
extent such disclosure is required by Law or trading market regulations, in
which case CancerVax shall provide Serono with prior notice of such disclosure.
5.7 Continued Listing. CancerVax agrees to use commercially
reasonable efforts, during the seven (7) year period following the date of this
Agreement (and thereafter, unless the Board of Directors of CancerVax determines
in good faith that it is not in the best interests of CancerVax to maintain such
listing), to maintain the listing of its Common Stock on the Nasdaq National
Market, the Nasdaq SmallCap Market, the New York Stock Exchange or the American
Stock Exchange, as CancerVax determines in its sole discretion; provided,
however, that CancerVax need not comply with this provision in the event that
CancerVax consummates a "going-private" transaction or a Change in Control after
which CancerVax is not required to comply with the reporting requirements set
forth in Section 13(a) or Section 15(d) of the Exchange Act.
12
ARTICLE 6
INDEMNIFICATION
6.1 Indemnification.
6.1.1 CancerVax shall defend, indemnify and hold harmless
Serono and its Affiliates and their respective officers, directors, employees,
agents, successors and assigns (the "Serono Indemnified Parties") from and
against any judgments, costs, awards, expenses (including reasonable attorneys'
fees) or other liabilities ("Liabilities"), which may be sustained, suffered or
incurred by the Serono Indemnified Parties arising out of, relating to or
resulting from: (a) any breach or inaccuracy in any representation or warranty
by CancerVax contained in this Agreement; or (b) any failure by CancerVax to
perform or observe any term, provision, covenant, or agreement on the part of
CancerVax to be performed or observed under this Agreement.
6.1.2 Serono shall defend, indemnify and hold harmless
CancerVax and its Affiliates and their respective officers, directors,
employees, agents, successors and assigns (the "CancerVax Indemnified Parties")
from and against any Liabilities which may be sustained, suffered or incurred by
the CancerVax Indemnified Parties arising out of, relating to or resulting from:
(a) any breach or inaccuracy in any representation or warranty by Serono
contained in this Agreement; or (b) any failure by Serono or any of its
Affiliates to perform or observe any term, provision, covenant, or agreement on
the part of Serono or any of its Affiliates to be performed or observed under
this Agreement.
6.1.3 Promptly after receipt by the Serono Indemnified
Parties or the CancerVax Indemnified Parties, as applicable (either, an
"Indemnified Party"), of any notice of any third-party claim or action, such
Indemnified Party will, if a claim in respect thereof is to be made against
CancerVax or Serono, as applicable (either, an "Indemnifying Party"), under this
Section 6.1, deliver to the Indemnifying Party a written notice of the
commencement thereof.
6.1.4 The Indemnifying Party shall have the right to
participate in, and to the extent it so desires, assume the defense of the
relevant third-party claim or action, including any decisions regarding the
settlement or disposition thereof; provided, however, that: (a) the Indemnifying
Party shall not settle any third-party claim or action in a way that prejudices
or adversely impacts an Indemnified Party without the prior approval of the
Indemnified Party, which approval shall not be unreasonably withheld or delayed;
(b) if the defendants in any third-party claim or action include both the
Indemnifying Party and the Indemnified Party, and either of them concludes that
there may be legal defenses available to it that are different from, additional
to or inconsistent with those available to the other party, the party so
concluding shall: (i) have the right to select separate counsel to participate
in the defense of the claim or action on its behalf; and (ii) bear the cost and
expense of such separate defense, unless, and to the extent, the parties
otherwise agree or it is determined by a court of competent jurisdiction that
such cost and expense are or were required to be indemnified by the Indemnifying
Party hereunder and are or were required to be incurred separately due to such
different, additional or inconsistent defenses.
6.1.5 If the Indemnifying Party determines not to defend
the third-party claim or action, or otherwise fails to do so with reasonable
diligence, the Indemnified Party shall have the
13
right to maintain the defense of such claim or action and the Indemnifying Party
shall provide reasonable assistance to it in the defense of such claim or action
and shall bear the reasonable costs and expenses of such defense (including
reasonable attorneys' fees of one counsel to the Indemnified Party), provided,
however, in no event shall the Indemnified Party settle or compromise any claim
hereunder without the prior approval of the Indemnifying Party, which approval
shall not be unreasonably withheld or delayed.
6.1.6 Either Serono or CancerVax, as applicable, shall
provide, and shall cause the Indemnified Party to provide, reasonable assistance
to the Indemnifying Party in the defense, settlement or other disposition of a
third-party claim or action, including by making available all pertinent
information and personnel under its control to the Indemnifying Party.
ARTICLE 7
MISCELLANEOUS
7.1 Further Assurances. At the reasonable request of a Party, the
other Party shall do, execute, acknowledge, deliver and file (or cause the same)
all such further acts, deeds, transfers, conveyances, assignments or assurances
as may be reasonably required to effect any provision of this Agreement.
7.2 Registration and Filing of this Agreement. To the extent, if
any, that either Party concludes in good faith that it or the other Party is
required to file or register this Agreement or a notification thereof with any
Governmental Authority, including the SEC, the Competition Directorate of the
Commission of the European Union or the U.S. Federal Trade Commission, in
accordance with Law, such Party shall inform the other Party thereof and in such
event the Parties shall cooperate, each at its own expense, in such filing,
registration or notification and shall execute all documents reasonably required
in connection therewith. The Parties shall promptly inform each other as to the
activities or inquiries of any such Governmental Authority relating to this
Agreement, and shall reasonably cooperate to respond to any request for further
information therefrom on a timely basis.
7.3 Relationship of the Parties. Neither Party shall have any
responsibility for the hiring, termination or compensation of the other Party's
employees or for any employee benefits of such employee. No employee or
representative of a Party shall have any authority to bind or obligate the other
Party to this Agreement for any sum or in any manner whatsoever, or to create or
impose any contractual or other liability on the other Party without said
Party's approval. For all purposes, and notwithstanding any other provision of
this Agreement to the contrary, Serono's legal relationship under this Agreement
to CancerVax shall be that of independent contractor. This Agreement is not a
partnership agreement and nothing in this Agreement shall be construed to
establish a relationship of co-partners or joint venturers between the Parties.
7.4 Expenses. Each Party shall bear its own costs incurred in the
performance of its obligations hereunder without charge or expense to the other
except as expressly provided in this Agreement.
7.5 No Third Party Beneficiaries. None of the provisions of this
Agreement shall be for the benefit of or enforceable by any Third Party,
including any creditor of either Party hereto. No such Third Party shall obtain
any right under any provision of this Agreement or shall by
14
reasons of any such provision make any Claim in respect of any debt, liability
or obligation (or otherwise) against either Party.
7.6 Notices. All demands, notices, consents, approvals, reports,
requests and other communications hereunder must be in writing and will be
deemed to have been duly given only if delivered personally, or by mail (first
class, postage prepaid), or by overnight delivery using a globally-recognized
carrier, to the Parties at the following addresses:
(a) if to CancerVax, to:
CancerVax Corporation
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000 XXX
Attn: President & CEO
With a copy to: General Counsel
Facsimile No.: (000) 000-0000
(b) with a copy to:
Xxxxxx & Xxxxxxx LLP
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000 XXX
Attn: Xxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
(c) if to Serono, to:
Serono B.V.
x/x Xxxxxx Xxxxxxxxxxxxx XX
00 xxx, Xxxxxx des Mines
Xxxx Xxxxxxx 00
XX-0000, Xxxxxx 00
Xxxxxxxxxxx
Attn: General Counsel
Facsimile No.: 00-00-000-0000
or to such other address as the addressee shall have last furnished in writing
in accord with this provision to the addressor. All notices shall be deemed
effective upon receipt by the addressee.
7.7 Assignment. This Agreement may not be assigned or otherwise
transferred, nor may any right or obligation hereunder be assigned or
transferred, by either Party without the prior written consent of the other
Party; provided, that Serono may assign or transfer this Agreement (a) to an
Affiliate or (b) in the event of a Change of Control (not including an
assignment or transfer by Serono to an Affiliate), to its successor-in-interest
resulting from such Change of Control. Any attempted assignment not in
accordance with this Section 7.7 shall be void. Any permitted assignee shall
assume all assigned obligations of its assignor under this Agreement. This
Agreement shall be binding upon and inure to the benefit of the
successors-in-interest and permitted assigns of the respective Parties.
15
7.8 Severability. In the event of the invalidity of any provisions
of this Agreement, the Parties agree that such invalidity shall not affect the
validity of the remaining provisions of this Agreement. The Parties will replace
an invalid provision with valid provisions which most closely approximate the
purpose and economic effect of the invalid provision. In the event that the
terms and conditions of this Agreement are materially altered as a result of the
preceding sentences, the Parties shall renegotiate the terms and conditions of
this Agreement in order to resolve any inequities. Nothing in this Agreement
shall be interpreted so as to require either Party to violate any Laws.
7.9 Headings; Construction; Certain Conventions. The headings used
in this Agreement have been inserted for convenience of reference only and do
not define or limit the provisions hereof. Unless otherwise expressly provided
herein or the context of this Agreement otherwise requires, (a) words of any
gender include each other gender, (b) words such as "herein", "hereof", and
"hereunder" refer to this Agreement as a whole and not merely to the particular
provision in which such words appear, (c) words using the singular shall include
the plural, and vice versa, (d) the words "include," "includes" and "including"
shall be deemed to be followed by the phrase "but not limited to", "without
limitation", "inter alia" or words of similar import and (e) the word "or" shall
be deemed to include the word "and" (e.g., "and/or").
7.10 Entire Agreement. This Agreement constitutes the entire
agreement between the Parties with respect to the subject matter hereof and
supersedes all previous agreements and understandings between the Parties,
whether written or oral, with respect to the subject matter hereof. This
Agreement may be altered, amended or changed only by a writing making specific
reference to this Agreement and signed by duly authorized representatives of
CancerVax and Serono.
7.11 Waiver. Any term or condition of this Agreement may be waived
at any time by the Party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the Party waiving such term or condition. No waiver by any
Party of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion.
7.12 Remedies Cumulative. Except as expressly set forth in this
Agreement, all rights and remedies available to a Party, whether under this
Agreement or afforded by Law, equity or otherwise, will be cumulative and not in
the alternative to any other rights or remedies that may be available to such
Party.
7.13 Governing Law. This Agreement shall be construed, and the
respective rights of the Parties determined, according to the substantive Laws
of the State of California notwithstanding the provisions governing conflict of
Laws thereunder to the contrary.
7.14 Counterparts; Fax Signatures. This Agreement may be executed
in any two (2) counterparts, including by facsimile, each of which, when
executed, shall be deemed to be an original and both of which together shall
constitute one and the same document.
[SIGNATURE PAGE FOLLOWS]
16
IN WITNESS WHEREOF, CancerVax and Serono, by their duly authorized
officers, have executed this Agreement as of the date hereof.
CANCERVAX CORPORATION SERONO B.V.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxx Xxxxxxx
------------------------------ -----------------------------------
Name: Xxxxx X. Xxxx Name: Xxxx Xxxxxxx
Title: President and Chief Title: Authorized Representative
Executive Officer
SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT
Exhibit A
Form of Legal Opinion of Xxxxxx & Xxxxxxx LLP
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Tel: (000) 000-0000 Fax: (000) 000-0000
xxx.xx.xxx
[XXXXXX & XXXXXXX LLP LOGO]
FIRM / AFFILIATE OFFICES
Boston New Jersey
Brussels New York
Chicago Northern Virginia
Frankfurt Orange County
December 21, 2004 Hamburg Paris
Hong Kong San Diego
London San Francisco
Los Angeles Silicon Valley
Milan Singapore
Moscow Tokyo
Washington, D.C.
To Serono B.V.
c/o Serono International SA File No.: 031862-0015
00 xxx, Xxxxxx xxx Xxxxx
Xxxx Xxxxxxx 00
XX-0000, Xxxxxx 00
Xxxxxxxxxxx
Re: CancerVax Corporation
Stock Purchase Agreement and Third Amended and Restated Investors'
Rights Agreement
Ladies and Gentlemen:
We have acted as special counsel to CancerVax Corporation, a
Delaware corporation ("CANCERVAX"), in connection with the issuance of 1,000,000
shares (the "PURCHASED STOCK") of CancerVax's common stock, par value $0.00004
per share (the "COMMON STOCK"), pursuant to that certain Stock Purchase
Agreement, dated as of December 15, 2004 (the "AGREEMENT"), by and between
CancerVax and Serono B.V., a Netherlands corporation ("SERONO"). This letter is
furnished pursuant to Section 2.2 of the Agreement.
As such counsel, we have examined such matters of fact and
questions of law as we have considered appropriate for purposes of this letter,
except where a specified fact confirmation procedure is stated to have been
performed (in which case we have with your consent performed the stated
procedure). We have examined, among other things, the following:
(a) the Agreement;
(b) the Third Amended and Restated Investors' Rights
Agreement, dated as of the date hereof, by and among CancerVax, Serono
and certain of the entities and persons listed on Schedule A thereto
(the "REGISTRATION RIGHTS AGREEMENT"); and
(c) the Amended and Restated Certificate of Incorporation
of CancerVax and the Certificate of Designations of Series A Junior
Participating Preferred Stock of CancerVax (collectively, the
"CERTIFICATE") and the Amended and Restated Bylaws of CancerVax (and
with the Certificate, the "GOVERNING DOCUMENTS").
The documents described in subsections (a) and (b) above are
referred to herein collectively as the "TRANSACTION AGREEMENTS."
TO SERONO B.V.
DECEMBER 21, 2004
PAGE 2
[XXXXXX & XXXXXXX LLP LOGO]
In our examination, we assumed the genuineness of all
signatures, the legal capacity of all natural persons executing documents, the
authenticity of all documents submitted to us as originals, and the conformity
to authentic original documents of all documents submitted to us as copies. In
addition, we have assumed that the requisite holders of Registrable Securities
(as such term is defined in the Registration Rights Agreement) required to
execute and deliver the Registration Rights Agreement, in order to amend and
modify the Prior Agreement (as such term is defined in the Registration Rights
Agreement) and to make Serono a party to the Registration Rights Agreement have
executed and delivered the Registration Rights Agreement, and that the
Registration Rights Agreement is a legally valid and binding obligation of such
parties.
With your consent we have relied upon the foregoing, including
the representations and warranties of CancerVax in the Agreement, and upon
certificates of officers of CancerVax and others, with respect to certain
factual matters. We have not independently verified such factual matters.
We are opining herein as to the effect on the subject
transaction only of the federal laws of the United States, the internal laws of
the State of California, and in paragraphs 1, 2, 4 and 5 of this letter, the
General Corporation Law of Delaware, and we express no opinion with respect to
the applicability thereto, or the effect thereon, of the laws of any other
jurisdiction, or, in the case of Delaware, any other laws, or as to any matters
of municipal law or the laws of any local agencies within any state. Our
opinions herein are based upon our consideration of only those statutes, rules
and regulations which, in our experience, are normally applicable to private
equity financing transactions; provided, that no opinion is expressed as to
securities laws except to the extent stated in paragraph 6 of this letter. We
express no opinion as to any state or federal laws or regulations applicable to
the subject transactions because of the legal or regulatory status or nature or
extent of the business of any parties to the Transaction Agreements.
Subject to the foregoing and the other matters set forth
herein, and except as set forth in the Agreement, it is our opinion that, as of
the date hereof:
1. CancerVax is a corporation under the general
corporation law of the State of Delaware with corporate power and authority to
enter into the Transaction Agreements and perform its obligations thereunder.
Based solely on certificates from public officials, we confirm that CancerVax is
validly existing and in good standing under the laws of the State of Delaware.
2. The execution, delivery and performance of the
Transaction Agreements have been duly authorized by all necessary corporate
action of CancerVax, and the Transaction Agreements have been duly executed and
delivered by CancerVax.
3. Each of the Transaction Agreements constitutes a
legally valid and binding obligation of CancerVax, enforceable against CancerVax
in accordance with its terms.
4. The execution and delivery of the Transaction
Agreements by CancerVax do not:
(a) violate the provisions of the Governing
Documents; or
TO SERONO B.V.
DECEMBER 21, 2004
PAGE 3
[XXXXXX & XXXXXXX LLP LOGO]
(b) violate the General Corporation Law of
Delaware or any federal or California statute, rule or regulation applicable to
CancerVax.
No opinion is expressed in this paragraph 4 as to federal or state securities
laws, tax laws, antitrust or trade regulation laws, insolvency or fraudulent
transfer laws, antifraud laws, compliance with fiduciary duty requirements or
other laws excluded by customary practice.
5. The Purchased Stock has been duly and validly
authorized by all necessary corporate action of CancerVax, and, when issued and
paid for by you in accordance with the terms of the Agreement, will be validly
issued, fully paid and nonassessable.
6. Assuming the truthfulness of the representations of
Serono set forth in the Agreement and of CancerVax's officers set forth in
certificate(s) of officers, the Purchased Stock, upon issuance, delivery and
payment therefor in the manner described in the Agreement, will be issued in a
transaction exempt from the registration requirements of the Securities Act of
1933, as amended.
The opinions expressed above are further subject to the
following limitations, qualifications and exceptions:
(a) the effect of bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws relating
to or affecting the rights or remedies of creditors;
(b) the effects of general principles of equity,
whether considered in a proceeding in equity or at law (including the possible
unavailability of specific performance or injunctive relief), concepts of
materiality, reasonableness, good faith and fair dealing, and the discretion of
the court before which a proceeding is brought;
(c) the unenforceability under certain
circumstances under law or court decisions of provisions for the indemnification
of or contribution to a party with respect to a liability where such
indemnification or contribution is contrary to public policy;
(d) certain rights, remedies and waivers
contained in the Transaction Agreements may be limited or rendered ineffective
by applicable California laws or judicial decisions governing such provisions,
but such laws or judicial decisions do not render the Transaction Agreements
invalid or unenforceable as a whole;
(e) we express no opinion as to the validity or
enforceability of any provisions for liquidated damages, default interest, late
charges, monetary penalties, prepayment or make-whole premiums or other economic
remedies and call to your attention the provisions of Sections 1717 and 1717.5
of the California Civil Code, which limit and create obligations for the payment
of attorney's fees;
(f) our opinions as to the Transaction
Agreements do not extend to any agreement, document, exhibit, attachment or form
referred to in, or incorporated by reference in, the Transaction Agreements; and
(g) we express no opinion in paragraph 3 as to
the enforceability of Section 6 of the Agreement or Section 1.10 of the
Registration Rights Agreement.
TO SERONO B.V.
DECEMBER 21, 2004
PAGE 4
[XXXXXX & XXXXXXX LLP LOGO]
With your consent, we have assumed that all parties to the
Transaction Agreements other than CancerVax are duly organized, validly existing
and in good standing under the laws of their respective jurisdictions of
organization; all parties to the Transaction Agreements other than CancerVax
have the requisite power and authority to execute and deliver the Transaction
Agreements and to perform their respective obligations under the Transaction
Agreements to which they are a party; all wire transfers by parties to the
Agreement will be honored; and the Transaction Agreements to which such parties
other than CancerVax are a party have been duly authorized, executed and
delivered by such parties and constitute their legally valid and binding
obligations, enforceable against them in accordance with their terms, and that
the status of the Transaction Agreements as legally valid and binding
obligations of the parties is not affected by any (i) breaches of, or defaults
under, agreements or instruments, (ii) violations of statutes, rules,
regulations or court or governmental orders, or (iii) failures to obtain
required consents, approvals or authorizations from, or make required
registrations, declarations or filings with, governmental authorities, provided
that we make no such assumption to the extent we have specifically opined as to
such matters with respect to CancerVax herein.
We bring your attention to the fact that certain of the
attorneys in this firm who have rendered, and will continue to render, legal
services to CancerVax hold securities of CancerVax.
This letter is furnished only to you and is solely for your
benefit in connection with the transactions covered hereby. This letter may not
be relied upon by you for any other purpose, or furnished to, assigned to,
quoted to or relied upon by any other person, firm or other entity for any
purpose, without our prior written consent, which may be granted or withheld in
our discretion.
Very truly yours,
/s/ Xxxxxx & Xxxxxxx LLP
