MEDAREX, INC.
RIGHTS EXCHANGE
AGREEMENT
JUNE 10, 1998
TABLE OF CONTENTS
SECTION 1. THE PURCHASER'S OFFER . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.1 MAKING THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.2 COMPANY ACTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
1.3 ACCURACY OF INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 2. AUTHORIZATION AND ISSUANCE OF THE SECURITIES. . . . . . . . . . . . . . .4
SECTION 3. AGREEMENT TO EXCHANGE THE SECURITIES. . . . . . . . . . . . . . . . . . .5
3.1 ISSUANCE OF SHARES AND WARRANTS. . . . . . . . . . . . . . . . . . . . . . . . .5
3.2 FRACTIONAL SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
SECTION 4. CLOSING AND DELIVERY. . . . . . . . . . . . . . . . . . . . . . . . . . .5
4.1 CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
4.2 DELIVERY OF THE WARRANT AGREEMENT AND THE SHARES . . . . . . . . . . . . . . . .6
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . .6
5.1 ORGANIZATION AND STANDING. . . . . . . . . . . . . . . . . . . . . . . . . . . .6
5.2 CORPORATE POWER; AUTHORIZATION . . . . . . . . . . . . . . . . . . . . . . . . .6
5.3 ISSUANCE AND DELIVERY OF THE SHARES; GRANT OF THE WARRANTS . . . . . . . . . . .7
5.4 SEC DOCUMENTS; FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . .7
5.5 CONSUMMATION OF MERGER; ISSUANCE OF RIGHTS . . . . . . . . . . . . . . . . . . .8
5.6 INTELLECTUAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
5.7 PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
5.8 CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.9 LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.10 NO DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.11 MATERIAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.12 GOVERNMENTAL CONSENTS; COMPLIANCE WITH LAW. . . . . . . . . . . . . . . . . . 11
5.13 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.14 INVESTMENT COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.15 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.16 LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.17 BROKER'S FEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.. . . . . . . . . . . . 12
6.1 ORGANIZATION AND STANDING. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.2 INVESTMENT PURPOSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.3 NO ADVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.4 RESTRICTION ON TRANSFER. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.5 BROKER'S FEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 7. COVENANTS OF THE PARTIES. . . . . . . . . . . . . . . . . . . . . . . . 14
7.1 FULL COOPERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.2 ACCESS TO INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.3 MAINTENANCE OF LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.4 PURCHASER REPRESENTATIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.5 FILINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.6 SHELF REGISTRATION OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8. NO-SHOP CLAUSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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8.1 IN GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.2 THIRD-PARTY OFFER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 9. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS . . . . . . . . 17
SECTION 10. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING . . . . . . . . . . 17
10.1 CLOSING UNDER THE PURCHASER'S OFFER . . . . . . . . . . . . . . . . . . . . . 17
10.2 SURRENDER OF THE RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.3 CONSENTS AND APPROVALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.4 REPRESENTATIONS AND WARRANTIES CORRECT. . . . . . . . . . . . . . . . . . . . 17
SECTION 11. CONDITIONS TO THE PURCHASER'S OBLIGATIONS AT THE CLOSING . . . . . . . 17
11.1 CLOSING UNDER PURCHASER'S OFFER . . . . . . . . . . . . . . . . . . . . . . . 18
11.2 APPOINTMENT OF DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.3 NO OTHER ISSUANCE BY THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . 18
11.4 STATEMENT OF POSITION OF THE COMPANY... . . . . . . . . . . . . . . . . . . . 18
11.5 DELIVERY OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.6 WARRANT AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.7 CONSENTS AND APPROVALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.8 REPRESENTATIONS AND WARRANTIES CORRECT. . . . . . . . . . . . . . . . . . . . 18
11.9 LEGAL OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 12. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT . . . . 19
12.1 REGISTRATION PROCEDURES AND EXPENSES. . . . . . . . . . . . . . . . . . . . . 19
12.2 TRANSFER OF SECURITIES AFTER SHELF REGISTRATION . . . . . . . . . . . . . . . 20
12.3 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
12.4 TERMINATION OF CONDITIONS AND OBLIGATIONS . . . . . . . . . . . . . . . . . . 22
12.5 INFORMATION AVAILABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
12.6 CHANGES IN PURCHASER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 13. INDEMNIFICATION FOR INCOMPLETE OR INACCURATE INFORMATION . . . . . . . 23
13.1 BY THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
13.2 BY THE PURCHASER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
13.3 PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 14. TERMINATION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
14.1 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
14.2 EFFECT OF TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
14.3 TERMINATION FEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 15. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 16. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
16.1 WAIVERS AND AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
16.2 SECTIONS; HEADINGS; DOLLAR AMOUNTS. . . . . . . . . . . . . . . . . . . . . . 26
16.3 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
16.4 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
16.5 COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
16.6 SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
16.7 ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
16.8 PAYMENT OF FEES AND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . 27
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RIGHTS EXCHANGE
AGREEMENT
This Rights Exchange Agreement (this "Agreement") is made as of June 10,
1998 (the "Effective Date"), by and among Medarex, Inc., a New Jersey
corporation with its principal place of business at 0000 Xxxxx 00 Xxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000 (the "Company"), and BCC Acquisition I LLC, a
Delaware limited liability company with its principal place of business at 000
Xxxxxxx Xxxxxx, Xxxxx 000, c/o Bay City Capital, Xxx Xxxxxxxxx, XX 00000
("Purchaser").
BACKGROUND
A. Pursuant to that certain Agreement and Plan of Reorganization dated
as of May 5, 1997 (the "Merger Agreement"), among the Company, Medarex
Acquisition Corp. ("Merger Sub"), and GenPharm International, Inc. ("GenPharm"),
GenPharm merged with and into Merger Sub, with GenPharm being the surviving
corporation and becoming a wholly-owned subsidiary of the Company (such
transaction referred to herein as the "Merger"). As a result of the Merger, the
former holders of GenPharm preferred stock and GenPharm common stock
(collectively, the "Holders", and each, individually, a "Holder") are currently
entitled to receive the remainder of the Merger Consideration (as defined in the
Merger Agreement), presently $44,412,500, in the form of shares of the common
stock of the Company, par value $.01 per share (the "Common Stock"), or, under
certain circumstances, cash, with such shares to be issued at a price per share
equal to the Fair Market Value thereof (as defined in the Merger Agreement).
B. Upon consummation of the Merger on October 21, 1997, certain of the
Holders received an initial issuance of Common Stock in partial satisfaction of
the Company's obligation to pay the Merger Consideration. The contingent
payment rights of the Holders to receive the remaining $44,412,500 in Merger
Consideration, as such amount may be adjusted downward under certain
circumstances, are herein referred to as the "Rights".
C. The Company and the Purchaser herein agree that, for purposes of
this Agreement, the aggregate face value of the Rights (the "Face Value") shall
be $44,412,500, although the Company and the Purchaser recognize that this value
may not represent the value that would actually be received by the Holders other
than pursuant to this transaction. The Face Value of the Rights held by any
individual Holder for purposes of this Agreement reflects such Holder's share of
such $44,412,500 and may be determined for each Holder by multiplying the per
share portion of the Merger Consideration allocable to each former share of
GenPharm preferred stock and common
stock (assuming the full $44,412,500 is paid), as set forth on SCHEDULE 1
attached hereto, by the respective number of shares of GenPharm preferred stock
and/or common stock formerly held by such Holder.
D. The parties contemplate that the Purchaser will make an offer (the
"Purchaser's Offer") to purchase any or all of the Rights (subject to minimum of
a $22,206,250 in aggregate Face Value) from the Holders at a 20% discount from
the Face Value of such Rights, provided that the Company, among other things,
enters into this Agreement through which the Company shall issue to the
Purchaser, in exchange for each $6.75 in Face Amount of Rights acquired pursuant
to the Purchaser's Offer, (i) one Share of the Company's Common Stock and (ii)
a Warrant (as defined in Section 2 below) to purchase 0.1222 shares of the
Company's Common Stock, exercisable for a period of seven (7) years. Such
Shares and Warrants shall be issued by the Company solely in exchange for and
through the cancellation of the Rights that the Purchaser acquires pursuant to
the Purchaser's Offer and shall represent payment in full by the Company of the
Merger Consideration represented by such Rights under the Merger Agreement as if
the Company had paid that portion of the Merger Consideration directly to the
Holders of such Rights.
AGREEMENT
In consideration of the mutual covenants contained in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Purchaser hereby agree as follows:
SECTION 1. THE PURCHASER'S OFFER
1.1 MAKING THE OFFER. (a) The Company and the Purchaser agree that, on
the Effective Date or within five (5) business days thereafter, the Purchaser
will make an offer to the Holders of Rights to acquire from such Holders any or
all of the Rights (subject to a $22,206,250 minimum) for cash. The Purchaser's
Offer shall be on substantially the terms and conditions set forth in the Offer
to Purchase attached hereto as EXHIBIT A (the "Offer to Purchase").
(b) The Purchaser expressly reserves the right to waive any condition to
the Purchaser's Offer, to increase the price offered for such Rights (the "Offer
Price"), to extend the duration of the Purchaser's Offer, or to make any other
changes in the terms and conditions of the Purchaser's Offer; PROVIDED, HOWEVER,
that, without the prior written consent of the Company, no such change may be
made which (i) reduces the Offer Price, (ii) changes the form of consideration
payable in the Purchaser's Offer, (iii) except as provided in the next sentence,
extends the Purchaser's Offer, (iv) amends or imposes conditions to the
Purchaser's Offer in addition to those set forth in the Offer to Purchase
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or (v) amends any other term of the Purchaser's Offer in a manner adverse to the
Holders. Notwithstanding the foregoing, the Purchaser may, without the consent
of the Company, (A) extend the Purchaser's Offer, if at the scheduled or
extended expiration date of the Purchaser's Offer any of the conditions of the
Purchaser's Offer set forth in the Offer to Purchase shall not be satisfied or
waived, until such time as such conditions are satisfied or waived (provided,
however, that without the prior written consent of the Company, which consent
shall not be unreasonably withheld, no such extension shall exceed thirty (30)
days), (B) extend the Purchaser's Offer for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange Commission
(the "SEC") or other securities authority, or the staff thereof, applicable to
the Purchaser's Offer, and (C) extend the Purchaser's Offer on one or more
occasions, if on such expiration date there shall not have been irrevocably
assigned at least 50% of the aggregate Face Value of the Rights. The Purchaser
agrees that if all of the conditions to the Purchaser's Offer set forth in the
Offer to Purchase are not satisfied on any scheduled expiration date of the
Purchaser's Offer then, provided that all such conditions are reasonably capable
of being satisfied, the Purchaser shall extend the Purchaser's Offer from time
to time until such conditions are satisfied or waived, provided that the
Purchaser shall not be required to extend the Purchaser's Offer beyond the
Termination Date (as defined in Section 4.1 below). Subject to the terms and
conditions of the Purchaser's Offer and this Agreement, the Purchaser shall
accept for payment, and pay for, any and all Rights validly assigned and not
revoked pursuant to the Purchaser's Offer that the Purchaser becomes obligated
to accept for payment, and pay for, pursuant to the Purchaser's Offer as
promptly as practicable after the expiration of the Purchaser's Offer.
1.2 COMPANY ACTIONS. (a) The Company hereby consents to the transfer of
the Rights by the Holders thereof to the Purchaser pursuant to the Purchaser's
Offer and represents and warrants that (i) the Company's board of directors has
adopted resolutions (A) approving and adopting this Agreement and the
transactions contemplated hereby, (B) authorizing the granting by the Company of
a waiver of the transfer restrictions contained in Section 1.2(c) of the Merger
Agreement with respect to the transfer of the Rights by the Holders to the
Purchaser, (C) approving the exchange of the Shares for the Rights on the terms
and subject to the conditions set forth in this Agreement, and (D) approving the
issuance of a Warrant or Warrants to purchase shares of Common Stock to the
Purchaser. The Company hereby consents to the inclusion in the Purchaser's
Offer documents of the information supplied by the Company for use in the Offer
to Purchase.
(b) The Company further represents that it received a verbal assurance
from the SEC in response to a letter of inquiry from the Company dated April 29,
1998, (the "SEC Letter") confirming that the transactions contemplated by the
SEC Letter and this Agreement are not subject to the provisions of Rules 13-e
and 14-d under the Exchange Act (as defined in Section 5.4 below).
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(c) The Company shall deliver to the Holders a letter in substantially
the form attached hereto as EXHIBIT B discharging the obligation of the Company
(if any) pursuant to Rule 14e-2 under the Exchange Act to make a disclosure
statement to the Holders with respect to the Purchaser's Offer.
(d) In connection with the Purchaser's Offer, the Company will promptly
furnish the Purchaser with mailing labels, security position listings and any
available listing or computer file containing the names and addresses of the
Holders as of a recent date (to be set forth on SCHEDULE 2) and shall furnish
the Purchaser with such information and assistance as the Purchaser or its
agents or representatives may reasonably request in communicating the
Purchaser's Offer to the Holders. The Purchaser shall hold in confidence the
information contained in any such labels, listings and files, will use such
information only in connection with the Purchaser's Offer and the Rights
Exchange (as defined below in Section 3.1), and, if this Agreement is terminated
in accordance with Section 14, will deliver to the Company all copies of such
information in the possession of the Purchaser.
1.3 ACCURACY OF INFORMATION. Each of the Company and the Purchaser
represents and warrants to the other that the information supplied by such party
for use in the Offer to Purchase (including, without limitation, in the case of
the Company, the information appearing in Sections 6, 7 and 8 of the Offer to
Purchase) does not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made in such
Offer to Purchase, in the light of the circumstances under which they were made,
not misleading. The Company further agrees that the information contained in
the Offer to Purchase and derived from public filings of the Company including,
without limitation, the SEC Documents (as defined in Section 5.4 below), is
deemed to have been "supplied" by the Company for purposes of the preceding
sentence. Each of the Company and the Purchaser shall promptly notify the other
party of any changes in the information supplied by the notifying party and
shall provide the other party with copies of any information necessary to make
the statements made in the Offer to Purchase not untrue or misleading in
accordance with the terms of this Section 1.3.
SECTION 2. AUTHORIZATION AND ISSUANCE OF THE SECURITIES.
Subject to the terms and conditions of this Agreement, the Company has
authorized the issuance and delivery of up to 6,579,629 shares of its Common
Stock and a warrant or warrants to purchase up to 804,000 shares of its Common
Stock for a period of seven years and at an exercise price of $10.00 per share
pursuant to a Warrant agreement in substantially the form attached hereto as
EXHIBIT C (the "Warrant Agreement"). The shares of Common Stock and the warrant
or warrants to purchase Common Stock issued to the Purchaser pursuant to this
Agreement shall be referred to herein as the "Shares" and the "Warrants",
respectively.
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SECTION 3. AGREEMENT TO EXCHANGE THE SECURITIES.
3.1 ISSUANCE OF SHARES AND WARRANTS. At the Closing (as defined in
Section 4.1 below), the Purchaser agrees to exchange the Rights at the aggregate
Face Value of such Rights acquired by the Purchaser pursuant to the Purchaser's
Offer (the "Aggregate Exchange Price") and the Company agrees to issue in
exchange for each $6.75 in Face Value of Rights acquired by the Purchaser in the
Offer (i) one Share of the Company's Common Stock and (ii) a Warrant or Warrants
to purchase 0.1222 shares of Common Stock at an exercise price of $10.00 per
share exercisable for a period of seven (7) years pursuant to the Warrant
Agreement. The Aggregate Exchange Price shall be paid solely in the form of the
complete cancellation of the Rights acquired by the Purchaser in connection with
the Purchaser's Offer. The delivery of the Rights in exchange for the issuance
of the Shares and the Warrants to Purchaser pursuant to this Agreement shall be
referred to herein as the "Rights Exchange". In the event that it is determined
that the Rights were not validly assigned to the Purchaser, but the Holder
thereof executed a Letter of Assignment releasing the Company from any further
obligation to pay to the Holder the Merger Consideration in such circumstances
upon receipt of payment from the Purchaser pursuant to the Offer, and the
Purchaser made such payment, all such payments shall, in the aggregate,
constitute payment of the Aggregate Exchange Price.
3.2 FRACTIONAL SHARES. No fractional shares shall be issued by the
Company in connection with this transaction. If the Purchaser would otherwise
be entitled to a fractional interest in a Share, the Purchaser shall receive an
amount of cash (without interest) determined by multiplying (i) the Price Per
Share by (ii) the fractional share interest to which the Purchaser would
otherwise be entitled (the "Fractional Share Payment"). The payment of cash in
lieu of fractional shares is made solely for the purpose of avoiding the expense
and inconvenience of issuing and transferring fractional shares and does not
represent separately bargained-for consideration.
SECTION 4. CLOSING AND DELIVERY.
4.1 CLOSING. The Closing of the issuance of the Shares and the Warrants
in exchange for the Rights (the "Closing") shall be held as soon as practicable
after the satisfaction or waiver of all other conditions to Closing set forth in
Sections 10 and 11 hereof, at the offices of Xxxxxx Xxxxxx White & XxXxxxxxx,
000 Xxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, or on such other date and
place as may be agreed to by the Company and the Purchaser, PROVIDED, HOWEVER,
that in no event shall the Closing take place after August 14, 1998 (the
"Termination Date"). The date on which the Closing occurs is herein referred to
as the "Closing Date".
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4.2 DELIVERY OF THE WARRANT AGREEMENT AND THE SHARES. At the Closing,
the Company shall deliver to the Purchaser (i) an executed Warrant Agreement in
substantially the form of EXHIBIT C and (ii) stock certificates registered in
the name of the Purchaser, or in such nominee name(s) as designated by the
Purchaser, representing the number of Shares to be issued by the Company to the
Purchaser at the Closing determined in accordance with Section 3.1 against
cancellation of the Rights acquired by the Purchaser pursuant to the Purchaser's
Offer. The parties hereto acknowledge that the issuance of the Shares and the
Warrants in exchange for the Rights represents the payment in full of that
portion of the Merger Consideration represented by such Rights under the terms
of the Merger Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth on the Schedule of Exceptions attached hereto as
SCHEDULE 3, the Company hereby represents and warrants as of the date hereof to
the Purchaser as follows:
5.1 ORGANIZATION AND STANDING. The Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
State of New Jersey, has full corporate power and authority to own or lease its
properties and conduct its business as presently conducted, and is duly
qualified as a foreign corporation and is in good standing in all jurisdictions
in which the character of the property owned or leased or the nature of the
business transacted by it makes qualification necessary (except where the
failure to be so qualified would not have a material adverse effect on the
business, properties, financial condition or results or operations of the
Company). Other than as disclosed in the SEC Documents and a Stock Purchase
Agreement dated as of May 4, 1998, between the Company and ErythroMed, Inc. (the
"ErythroMed Agreement"), the Company has no Subsidiaries or equity interest in
any other entity. For purposes of this Agreement, "Subsidiary" shall mean an
entity controlled by the Company (including, without limitation, any entity 50%
or more of the voting securities of which are held by the Company).
5.2 CORPORATE POWER; AUTHORIZATION. The Company has all requisite
corporate power, and has taken all requisite corporate action, to execute and
deliver this Agreement, to sell and issue the Shares and to enter into the
Warrant Agreement and to carry out and perform all of its obligations under this
Agreement and the Warrant Agreement. This Agreement and the Warrant Agreement
constitute the legal, valid and binding obligations of the Company, enforceable
in accordance with their terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
the enforcement of creditors' rights generally, (ii) as limited by equitable
principles generally and (iii) as rights to indemnity or contributions hereunder
may be limited by federal or state securities laws or principles of public
policy.
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The execution and delivery of this Agreement and the Warrant Agreement do not,
and the performance of this Agreement and the Warrant Agreement and the
compliance with the provisions hereof and thereof and the issuance, sale and
delivery of the Shares by the Company will not conflict with, or result in a
breach or violation of the terms, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of any lien pursuant to
the terms of, the Articles of Incorporation or Bylaws of the Company or any
statute, law, rule or regulation applicable to the Company or any Subsidiary, or
any state or federal order, judgment or decree applicable to the Company or any
Subsidiary, or any indenture, mortgage, lease or other agreement or instrument
to which the Company or any Subsidiary or any of the properties of such person
is subject (including, without limitation, the Merger Agreement), except such as
would not have a material adverse effect on the Company or such Subsidiary.
5.3 ISSUANCE AND DELIVERY OF THE SHARES; GRANT OF THE WARRANTS. The
Shares, when issued and exchanged for the Rights in compliance with the
provisions of this Agreement, will be validly issued, fully paid and
nonassessable. Further, the Shares, when issued and exchanged for the Rights in
compliance with the provisions of this Agreement, will not be subject to
preemptive, co-sale, right of first refusal or any other similar rights of the
shareholders of the Company or any liens or encumbrances. In addition, the
shares issuable upon exercise by the Purchaser of the Warrants (the "Warrant
Shares"), when issued, paid for and delivered in accordance with the terms of
the Warrant Agreement, will be validly issued, fully paid and nonassessable, and
will not be subject to preemptive, co-sale, right of first refusal or any other
similar rights of the shareholders of the Company or any liens or encumbrances.
Other than a Registration Rights Agreement between the Company and Novartis
Pharma AG, the Company has not granted any registration rights which are still
in effect with respect to its securities other than the registration rights set
forth herein.
5.4 SEC DOCUMENTS; FINANCIAL STATEMENTS. The Company and each
Subsidiary has filed in a timely manner all documents that such person was
required to file with the SEC under Sections 13, 14(a) and 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") during the 36
months preceding the date of this Agreement. As of their respective filing
dates (or, if amended, when amended), all documents filed by the Company or any
of its Subsidiaries with the SEC, whether under the Exchange Act or under the
Securities Act of 1933, as amended (the "Securities Act"), during such 36-month
period (the "SEC Documents") complied in all material respects with the
requirements of the Exchange Act or the Securities Act, as the case may be. The
Company satisfies the requirements for the use of Form S-3 under the Securities
Act, to register the offers and sales of the Shares and the Warrant Shares
contemplated by the Shelf Registration Statement (as defined in Section 12).
None of the SEC Documents as of their respective dates contained any untrue
statement of material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made
7
therein, in light of the circumstances under which they were made, not
misleading. The consolidated financial statements of the Company and its
Subsidiaries included in the SEC Documents (the "Financial Statements") comply
as to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto. The
Financial Statements have been prepared in accordance with generally accepted
accounting principles consistently applied and fairly present the consolidated
financial position of the Company and its Subsidiaries at the dates thereof and
the results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal, recurring adjustments
and the absence of footnotes). There is no material liability or commitment of
the Company or any of its Subsidiaries which is not reflected in the most recent
Financial Statements except commitments made since the date of such Financial
Statements in the ordinary course of business. There have not been any changes
in the assets, liabilities, financial condition or operations of the Company or
any of its Subsidiaries from that reflected in the most recent Financial
Statements, except changes in the ordinary course of business that have not had
a material adverse effect on the business, properties, financial condition or
results of operations of the Company or any of its Subsidiaries.
5.5 CONSUMMATION OF MERGER; ISSUANCE OF RIGHTS. The Merger Agreement
was properly adopted, and was properly executed and delivered, and, together
with the Rights created therein, is a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or limiting creditors' rights or by equitable principles
generally. The Merger has been duly consummated in accordance with the terms of
the Merger Agreement and the Company has the power to allow the transfer of the
Rights to the Purchaser and has taken (or shall have taken prior to the Closing)
all steps necessary to be taken by the Company to permit the Holders to sell and
the Purchaser to acquire the Rights.
5.6 INTELLECTUAL PROPERTY. (a) The Company and each Subsidiary has
sufficient title and ownership of all material patents, patent rights,
inventions, trademarks, service marks, copyrights, trade secrets, proprietary
rights, processes and know-how (collectively, "Intellectual Property") owned or
used by it or that are necessary for the conduct of its business as presently
conducted and believes that it can obtain, on commercially reasonable terms, any
additional rights necessary for its business as proposed to be conducted, and
that the Intellectual Property does not, and would not, conflict with or
constitute an infringement of the rights of others.
(b) Other than the strategic partnership agreements described in
paragraph (f) of this Section 5.6 and as set forth in the SEC Documents, there
are no outstanding options, licenses (whether to or from the Company) or
agreements of any kind relating to the Intellectual Property described in
paragraph (a) of this Section 5.6 or granting rights
8
to any other person to manufacture, license, produce, assemble, market or sell
products or services derived or derivable from the Intellectual Property of the
Company or any of its Subsidiaries, nor is the Company or any of its
Subsidiaries bound by or a party to any options, licenses or agreements of any
kind with respect to the Intellectual Property of any other person or entity.
(c) Neither the Company nor any of its Subsidiaries has received any
communications alleging that such person or any of its employees of has violated
or infringed or, by conducting its business as proposed, would violate or
infringe, any of the Intellectual Property of any other person or entity.
(d) Neither the Company nor any of its Subsidiaries is aware that any of
its employees is obligated under any contract (including licenses, covenants, or
commitments of any nature) or other agreement, or subject to any judgment,
decree, or order of any court or administrative agency, that would interfere
with the use of such employee's best efforts to promote the interests of the
Company or such Subsidiary with respect to the Intellectual Property of the
Company or such Subsidiary or otherwise or that would conflict with the business
of the Company or such Subsidiary as proposed to be conducted.
(e) Neither the execution nor delivery of this Agreement, nor the
carrying on of the business of the Company or any of its Subsidiaries by the
employees of such person, nor the conduct of the business of the Company or any
of its Subsidiaries as proposed, will, to the Company's knowledge, conflict with
or result in a breach of the terms, conditions, or provisions of, or constitute
a default under, any contract, covenant, or instrument under which any of such
employees is now obligated. The Company does not believe it is or will be
necessary to utilize any inventions of any of the employees of the Company or
any of its Subsidiaries (or people such person currently intends to hire) made
prior to their employment by such person; and
(f) The strategic partnering agreements between the Company and each of
Merck KGaA, Novartis Pharma AG, Centeon L.L.C., Santen Pharmaceutical Co., Ltd.,
Eisai Co., Ltd., Centocor, Inc., LeukoCite, Inc. and Schering, AG (together, the
"Major Strategic Partners"), described under the caption "Corporate
Collaborations" in the Company's Form 10-K for the period ending December 31,
1997, and under the caption "Recent Developments" in the Company's Form 10-Q for
the period ending March 31, 1998, are in full force and effect and constitute
valid and binding obligations of the Company and each Major Strategic Partner
party thereto. Neither the Company nor any Major Strategic Partner is in
default under any of such agreements.
5.7 PROPERTIES. The Company and each Subsidiary has good and valid
title to all of the properties and assets reflected as owned by the Company or
any Subsidiary in
9
the Financial Statements, free and clear of all material liens, mortgages
(statutory or otherwise), security interests, pledges, claims or encumbrances
except those, if any, disclosed in the Financial Statements. The Company and
each Subsidiary holds its leased properties under valid and binding leases, with
such exceptions as are not materially significant in relation to the business of
the Company or such Subsidiary. The Company and each Subsidiary owns or leases
all of such properties as are necessary to its operations as now conducted.
5.8 CAPITALIZATION. The authorized capital stock of the Company
consists of 40,000,000 shares of Common Stock and 2,000,000 shares of preferred
stock. Immediately prior to the Closing, 22,200,034 shares of Common Stock will
be outstanding (other than shares issued between the Effective Date and
immediately prior to the Closing as the result of the exercise of employee or
consultant stock options existing on the Effective Date) and no shares of
preferred stock will be outstanding. The certificates evidencing the Shares are
in due and proper legal form and have been duly authorized for issuance by the
Company. All of the issued and outstanding securities of the Company have been
duly authorized and validly issued, are fully paid and nonassessable, have been
issued in compliance with federal, state and other applicable laws and were
issued without violation of any preemptive, co-sale or other right. Except as
otherwise disclosed in the SEC Documents and in the Financial Statements, there
is no outstanding option, warrant, agreement or other right calling for the
issuance or redemption of, and there is no commitment, plan or arrangement to
issue or redeem, any securities of the Company. Other than the Merger Agreement
and the ErythroMed Agreement, the Company does not have any binding agreement
with respect to the acquisition or purchase of the securities of or owned by any
person or entity or the acquisition of the business, assets or liabilities of
any person or entity, and the Company does not have any agreement or
understanding with respect to the disposition or sale of its business, assets or
property.
5.9 LITIGATION. There is no pending or, to the Company's knowledge,
threatened, action, suit or other proceeding to which the Company or any of its
Subsidiaries is a party or to which the property or assets of the Company or any
of its Subsidiaries is subject which might result in a material adverse effect
on the business, properties, financial condition or results of operations of the
Company or any of its Subsidiaries.
5.10 NO DEFAULTS. Neither the Company nor any of its Subsidiaries is in
violation or default of any provisions of its certificate of incorporation or
bylaws, or any organizational documents, or in breach with respect to any
provision of any agreement, judgment, decree, order, mortgage, deed of trust,
lease franchise, license, indenture, permit or other instrument to which it is a
party or by which it or any of its properties are bound which violation, default
or breach would have a material adverse effect on the
10
business, properties, financial condition or results of operations of the
Company or any of its Subsidiaries, and there does not exist any state of facts
which constitutes an event of default on the part of the Company or any of its
Subsidiaries as defined in such documents or which, with notice or lapse of time
or both, would constitute such an event of default.
5.11 MATERIAL AGREEMENTS. The Company and each Subsidiary is a party to
all agreements that are necessary for the conduct of the business of such person
as presently conducted and all such agreements are currently in effect. Neither
the Company nor any of its Subsidiaries is in breach of any provision of any
such agreement where such breach would have a material adverse effect on the
business, properties, financial condition or results of operations of the
Company or such Subsidiary.
5.12 GOVERNMENTAL CONSENTS; COMPLIANCE WITH LAW. No consent, approval,
order or authorization of, or registration, qualification, designation,
declaration or filing with, any federal, state, or local governmental authority
on the part of the Company is required in connection with the consummation of
the transactions contemplated by this Agreement except for (i) the filing of a
Shelf Registration Statement and all amendments thereto with the SEC as
contemplated by Section 12.1 of this Agreement, (ii) any filings required by
state securities laws and (iii) the filing of a notification and report form
under the United States Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"). The Company and each Subsidiary is conducting business
in compliance in all material respects with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business, including
but not limited to, all applicable local, state and federal environmental laws
and regulations.
5.13 INSURANCE. The Company and each Subsidiary maintains insurance of
the types and in the amounts generally deemed adequate for its business covering
all risks customarily insured against, all of which insurance is in full force
and effect.
5.14 INVESTMENT COMPANY. The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
5.15 TAXES. The Company and each Subsidiary has filed all necessary
federal, state and foreign income and franchise tax returns and has paid or
accrued all taxes shown as due thereon except for such taxes as are being
contested in good faith, and the Company has no knowledge of any tax deficiency
which has been or might be asserted or threatened against the Company or any of
its Subsidiaries which would have a material adverse effect on the business,
properties, financial condition or results of operations of the Company or any
of its Subsidiaries.
11
5.16 LISTING. The Company's Common Stock is traded on The Nasdaq
National Market.
5.17 BROKER'S FEE. The Company represents that there are no brokers or
finders entitled to compensation by the Company in connection with the Rights
Exchange, and shall indemnify the Purchaser for any such fees for which the
Company is responsible.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby represents and warrants as of the date hereof to the
Company as follows:
6.1 ORGANIZATION AND STANDING. The Purchaser has been duly organized
and is validly existing as a limited liability company in good standing under
the laws of the State of Delaware, has full corporate power and authority to own
or lease its properties and conduct its business as presently conducted, and is
duly qualified as a foreign organization and is in good standing in all
jurisdictions in which the character of the property owned or leased or the
nature of the business transacted by it makes qualification necessary (except
where the failure to be so qualified would not have a material adverse effect on
the business, properties, financial condition or results or operations of the
Purchaser).
6.2 INVESTMENT PURPOSES. (a) The Purchaser acknowledges that the
Shares and the Warrants are being issued in reliance upon the exception from the
registration requirements of the Securities Act provided by Section 4(2) thereof
and as such the Shares and the Warrants will be "restricted securities" within
the meaning of Rule 144.
(b) The Purchaser is acquiring the Shares and the Warrants pursuant to
this Agreement in the ordinary course of its business and for its own account
for investment only and with no present intention of distributing any of such
Shares or Warrants or any arrangement or understanding with any other persons
regarding the distribution of such Shares or Warrants except in each case as
conforms with all applicable requirements of the Securities Act, applicable blue
sky laws and all rules and regulations promulgated thereunder.
(c) The Purchaser will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) any of the securities purchased hereunder
except in compliance with the Securities Act, applicable blue sky laws, and the
rules and regulations promulgated thereunder.
(d) The Purchaser has, in connection with its decision to acquire the
Shares and the Warrants, relied with respect to the Company and its affairs
solely upon the SEC
12
Documents and the other information delivered to the Purchaser by the Company as
described in Sections 5.4 above and the representations and warranties of the
Company contained herein.
(e) The Purchaser is an "accredited investor" within the meaning of Rule
501 of Regulation D promulgated under the Securities Act.
(f) The Purchaser has full right, power, authority and capacity to enter
into this Agreement and to consummate the transactions contemplated hereby and
has taken all necessary action to authorize the execution, delivery and
performance of this Agreement. Upon the execution and delivery of this
Agreement by the Purchaser, this Agreement shall constitute a valid and binding
obligation of the Purchaser, enforceable in accordance with its terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting the enforcement of creditors' rights
generally, (ii) as limited by equitable principles generally, including any
specific performance, and (iii) as to those provisions of Section 12.3 and 13.2
relating to indemnity or contribution.
6.3 NO ADVICE. The Purchaser understands that nothing in this Agreement
or any other materials presented to the Purchaser in connection with the
acquisition of the Shares and the Warrants constitutes legal, tax or investment
advice to the Purchaser. The Purchaser has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with the Rights Exchange.
6.4 RESTRICTION ON TRANSFER. The Purchaser understands that: (a) other
than to a person directly or indirectly controlling, controlled by, or in common
control with, the Purchaser (any such person, an "Affiliate"), neither the
Shares nor the Warrants will be transferable in the absence of a registration
under the Securities Act or an exemption therefrom or in the absence of
compliance with any term of this Agreement; (b) the Company may provide stop
transfer instructions to its transfer agent with respect to the Shares and the
Warrants in order to enforce the restrictions contained in this Section 6.4 and
to confirm that the Purchaser has complied with its obligations contained in
Section 12.2 hereof; and (c) each certificate representing Shares shall be in
the name of the Purchaser and shall bear substantially the following legends (in
addition to any legends required under applicable securities laws):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION, AND MAY ONLY BE SOLD, PLEDGED, TRANSFERRED OR OTHERWISE
DISPOSED OF BY THE HOLDER
13
THEREOF IF SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT AND REGISTERED
OR QUALIFIED UNDER ANY APPLICABLE STATE OR OTHER SECURITIES LAWS, UNLESS
THE COMPANY DETERMINES THAT EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENT
ARE AVAILABLE.
The legend contained in this Section 6.4 may be removed from a stock certificate
immediately upon receipt by the Company's transfer agent of a certificate
substantially in the form of APPENDIX I attached hereto. Notwithstanding the
foregoing, such Shares must be held in certificated form until such Shares have
been sold in accordance with the provisions of APPENDIX I attached hereto.
6.5 BROKER'S FEE. The Purchaser represents that there are no brokers or
finders entitled to compensation by the Purchaser in connection with the Rights
Exchange, and shall indemnify the Company for any such fees for which the
Purchaser is responsible.
SECTION 7. COVENANTS OF THE PARTIES.
7.1 FULL COOPERATION. The Company will use its reasonable best efforts
to cooperate with and assist the Purchaser with respect to the Purchaser's
Offer. Such cooperation and assistance shall include, without limitation, the
provision of any additional disclosure to the Holders that the Parties determine
to be necessary or advisable after the date hereof in connection with the
Purchaser's Offer under applicable federal and state securities laws, rules and
regulations. The Company will not take any position with respect to the
Purchaser's Offer but has waived the transfer restrictions contained in Section
1.2(c) of the Merger Agreement to the extent required to permit the Holders to
transfer the Rights to the Purchaser. The Company will advise the Purchaser of
any need to amend the Offer to Purchase as it relates to information supplied by
the Company for inclusion therein such that the Offer to Purchase does not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made in such Offer to Purchase, in the
light of the circumstances under which they were made, not misleading as of any
date during the period in which the Purchaser's Offer is pending in accordance
with the provisions of Section 1.3.
7.2 ACCESS TO INFORMATION. For a period beginning on the Effective Date
and continuing until the earlier of the Closing or the Termination Date, the
Company shall afford to the Purchaser and its agents and representatives full
access, at reasonable times and in a reasonable manner, to all of its premises,
facilities, properties, books and records and shall make its directors,
officers, agents, and (with the prior consent of the Company, which consent
shall not be unreasonably withheld), customers, vendors and creditors reasonably
available to confer with the Purchaser and its agents and representatives. The
Purchaser shall have the right to make copies, extracts and summaries of all
such reports, books, records and information, subject, however, to any
obligations of the Company to
14
any other persons. The Company shall notify the Purchaser of any material
change in the business of the Company or in its operations or properties, or of
any governmental complaints, investigations or hearings (or communications
indicating the same may be contemplated) or of the institution, continuation or
threat of any litigation involving the Company or any affiliate of the Company
or any of its assets, and will keep the Purchaser informed of such events.
7.3 MAINTENANCE OF LISTING. For so long as the Company is obligated to
keep in effect the Shelf Registration Statement provided under Section 12
hereof, the Company will use its reasonable best efforts to maintain its listing
on The Nasdaq National Market or a national securities exchange, as defined in
the Exchange Act.
7.4 PURCHASER REPRESENTATIVE. The Company shall use its reasonable best
efforts to ensure that, as long as the Purchaser (or an Affiliate of the
Purchaser) holds either (i) 5% of the outstanding voting securities of the
Company or (ii) 75% of the Shares, the Purchaser Representative (as defined in
Section 11.2) appointed to serve on the Company's board of directors in
accordance with the provisions of Section 11.2 shall be included in the
Company's proxy statement as a nominee of the board of directors for election to
the board and shall be elected to serve on the Company's board of directors.
7.5 FILINGS. The parties shall consult and fully cooperate with and
provide assistance to each other in preparing and filing as soon as practicable
all consents, approvals and authorizations necessary or advisable to be made or
obtained from any third party or governmental agency in order to consummate the
transactions contemplated hereby, including, without limitation, any required
filing under the HSR Act.
7.6 SHELF REGISTRATION OPINION. Upon the effective date a Shelf
Registration Statement in connection with Section 12, the Company shall provide
the Purchaser with an opinion letter addressed to the Purchaser, dated as of the
effective date of such Shelf Registration Statement, from Satterlee, Stephens,
Xxxxx & Xxxxx LLP, counsel to the Company, stating (i) that the Shelf
Registration Statement covers the Shares and the Warrant Shares (including the
resale thereof), (ii) that such counsel is not aware of any material untruths in
such Shelf Registration Statement and (iii) such other matters as may be
reasonable and customary in connection with such registration.
SECTION 8. NO-SHOP CLAUSE.
8.1 IN GENERAL. For a period beginning on the Effective Date and
continuing until the earlier of the Closing or the Termination Date (the
"No-Shop Period"), the Company shall not, and shall use its best efforts to
cause its respective officers, directors and employees not to, and shall use its
commercially reasonable efforts to cause its investment bankers, attorneys or
other agents retained by or acting on behalf of the
15
Company not to: (i) initiate, solicit or encourage, directly or indirectly, any
inquiries or the making of any proposal that constitutes or is reasonably likely
to lead to a Third-Party Offer (as defined below), (ii) engage in negotiations
or discussions (other than to advise as to the existence of the restrictions set
forth in this Section 8.1) with, or furnish any information or data to, any
third party relating to a Third-Party Offer or (iii) enter into any agreement
with respect to any Third-Party Offer or approve any Third-Party Offer.
Notwithstanding anything to the contrary contained in this Section 8.1 or
elsewhere in this Agreement, the Company and its board of directors (or any
committee thereof) (x) may participate in discussions or negotiations with or
furnish information to any third party making an unsolicited Third-Party Offer
(a "Potential Acquiror") or approve an unsolicited Third-Party Offer if the
board is advised by its financial advisor that such Potential Acquiror has the
financial wherewithal to be reasonably capable of consummating such a
Third-Party Offer, and the board determines in good faith (A) after receiving
advice from its financial advisor, that the Third-Party Offer submitted by such
third party to the Company is more favorable to the Company and its stockholders
than the transaction contemplated by this Agreement, and (B) based upon advice
of outside legal counsel, that the failure to participate in such discussions or
negotiations or to furnish such information or approve a Third-Party Offer would
be reasonably likely to violate the board's fiduciary duties under applicable
law, or (y) may take any action necessary to comply with Rule 14e-2 promulgated
under the Exchange Act. The Company agrees that any non-public information
furnished to a Potential Acquiror will be furnished to the Purchaser as well and
shall be furnished pursuant to a confidentiality agreement upon terms reasonably
acceptable to the Purchaser and the Company. In the event that the Company
shall receive a Third-Party Offer or determine to provide any information as
described, it shall promptly, and in any event within 24 hours, notify the
Purchaser in writing as to that fact and shall describe the terms of such
Third-Party Offer.
8.2 THIRD-PARTY OFFER. As used in Section 8.1, the term "Third-Party
Offer" shall mean any bona fide written proposal, made by a third party to
acquire beneficial ownership (as defined under Rule 13d-3 of the Exchange Act)
of all or a material portion of the assets of, or any material equity interest
in, the Company pursuant to a merger, consolidation or other business
combination, sale of shares of capital stock, sale of assets, tender offer or
exchange offer or similar transaction involving the Company including any single
or multi-step transaction or series of related transactions which is structured
to permit such third party to acquire beneficial ownership of any material
portion of the assets of, or any material portion of the equity interest in, the
Company (other than, but including any transaction similar to, the transactions
contemplated by this Agreement).
16
SECTION 9. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchaser herein and in the certificates for the securities delivered
pursuant hereto shall survive the execution of this Agreement, the delivery to
the Purchaser of the certificates representing the Shares and the exchange of
the Rights.
SECTION 10. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING.
The Company's obligation to complete the issuance of the Shares in exchange
for the Rights and deliver Shares to the Purchaser shall be subject to the
following conditions to the extent not waived by the Company:
10.1 CLOSING UNDER THE PURCHASER'S OFFER. The Purchaser shall have
purchased Rights pursuant to the Purchaser's Offer.
10.2 SURRENDER OF THE RIGHTS. The Purchaser shall have surrendered to
the Company against delivery of the Shares and the Warrants the Rights acquired
by the Purchaser pursuant to the Purchaser's Offer.
10.3 CONSENTS AND APPROVALS. Any consents, waivers, clearances,
approvals and authorizations of regulatory or governmental bodies (including,
without limitation, the expiration or termination of the waiting period under
the HSR Act) that are necessary in connection with the consummation of the
transactions contemplated by this Agreement shall have been obtained.
10.4 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Purchaser in Sections 1 and 6 hereof shall be true and
correct in all material respects when made, and shall be true and correct in all
material respects on the Closing Date.
Provided that the Company has delivered the notice referred to in
Section 12(g) of the Offer to Purchase, and notwithstanding anything to the
contrary contained in this Section 10, all the foregoing conditions shall be
deemed to have been satisfied or waived by the Company upon the closing under
the Purchaser's Offer.
SECTION 11. CONDITIONS TO THE PURCHASER'S OBLIGATIONS AT THE CLOSING.
The Purchaser's obligation to deliver the Rights in exchange for the Shares
shall be subject to the following conditions to the extent not waived by the
Purchaser:
17
11.1 CLOSING UNDER PURCHASER'S OFFER. All conditions to closing under
the Purchaser's Offer shall have been satisfied or shall have been waived by the
Purchaser.
11.2 APPOINTMENT OF DIRECTORS. The Company shall have taken all actions
necessary to ensure that a representative of the Purchaser (the "Purchaser
Representative"), to be selected by the Purchaser and reasonably acceptable to
the Company, shall be appointed, effective immediately after the Closing, to
serve on the Company's board of directors as a Class II director.
11.3 NO OTHER ISSUANCE BY THE COMPANY. Other than the Initial Payment
(as defined in the Merger Agreement), the Company shall not have issued any
Common Stock of the Company to any of the Holders who have not accepted the
Purchaser's Offer. Other than the general plan of distribution of the Merger
Consideration as set forth in the Merger Agreement as in effect on the Effective
Date, the Company shall not have any agreement, arrangement or plan to issue any
Common Stock of the Company to any of the Holders who have not accepted the
Purchaser's Offer.
11.4 STATEMENT OF POSITION OF THE COMPANY. The Company shall have
delivered to the Holders the letter contemplated by Section 1.2(c).
11.5 DELIVERY OF SHARES. The Company shall have delivered to the
Purchaser stock certificates representing the Shares in accordance with the
terms of Section 4.2.
11.6 WARRANT AGREEMENT. The Company shall have executed and delivered to
the Purchaser a Warrant Agreement in substantially the form of EXHIBIT C.
11.7 CONSENTS AND APPROVALS. Any consents, waivers, clearances,
approvals and authorizations of regulatory or governmental bodies (including,
without limitation, under the HSR Act) that are necessary in connection with the
consummation of the transactions contemplated by this Agreement shall have been
obtained.
11.8 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Sections 1 and 5 shall be true and correct in
all material respects when made and as of the Closing Date or any other date, if
a representation or warranty specifically refers to such other date, and the
Purchaser shall have received a certificate signed by the chief executive
officer and chief financial officer of the Company, or such other officers of
the Company as agreed upon by the parties hereto, that each of such
representations and warranties is true and correct in all material respects on
and as of the Closing Date with the same effect as though such representations
and warranties had been made or given on and as of the Closing Date, and that
such party has performed and complied with all of its obligations under this
Agreement which are to be performed or complied with on or prior to the Closing
Date.
18
11.9 LEGAL OPINION. The Purchaser shall have received from Satterlee,
Stephens, Xxxxx & Xxxxx LLP, counsel to the Company, an opinion letter addressed
to the Purchaser, dated as of the Closing Date, covering the matters set forth
in EXHIBIT D hereto, subject to customary assumptions and qualifications.
SECTION 12. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES
ACT.
12.1 REGISTRATION PROCEDURES AND EXPENSES. (a) As soon as practicable
following the Closing Date and in any event no later than thirty (30) days
following the Closing Date, the Company shall prepare and file with the SEC, and
thereafter shall use its reasonable best efforts to cause to be declared
effective, a shelf registration statement on an appropriate form under the
Securities Act relating to the offer and sale of the Shares and the Common Stock
issuable upon exercise of the Warrants (together, the "Registrable Securities")
by the Company to the Purchaser and by any other holders thereof from time to
time (including, without limitation, the Purchaser), in accordance with the
methods of distribution set forth in such shelf registration statement, through
The Nasdaq National Market or the facilities of any national securities exchange
on which the Company's Common Stock is then traded, or in privately-negotiated
transactions (a "Shelf Registration Statement"). All shares of Common Stock
acquired by the Purchaser pursuant to Section 3.1 or upon the exercise of a
Warrant acquired by the Purchaser pursuant to Section 3.1 shall be included in
such Shelf Registration Statement.
(b) The Company shall use its reasonable best efforts
(including, without limitation, the preparation and filing with the SEC of
amendments and supplements to the Shelf Registration Statement and a prospectus
to be used in connection therewith) to keep the Shelf Registration Statement
continuously effective and not misleading for a period of seven (7) years from
the Closing Date or such shorter period that will terminate when all the
Registrable Securities covered by the Shelf Registration Statement have been
sold pursuant thereto. The Company shall be deemed not to have used its
reasonable best efforts to keep the Shelf Registration Statement effective
during the requisite period if it takes any action that would result in the
holders of the Registrable Securities covered thereby not being able to offer
and sell such Registrable Securities during that period, unless such action is
required by applicable law. Notwithstanding the foregoing, following the
effectiveness of the Shelf Registration Statement, the Company may, at any time,
suspend the effectiveness of the Shelf Registration Statement for up to no
longer than sixty (60) days, as appropriate (a "Suspension Period"), by giving
notice to the Purchaser, if (i) the Company shall have determined that the
Company may be required to disclose any material corporate development or (ii)
the Company shall be involved in an underwritten public offering of its
securities. The Company will use its best efforts to minimize the length of any
Suspension Period. Notwithstanding the foregoing, no more
19
than two Suspension Periods may occur in any twelve (12) month period. The
Purchaser agrees that, upon receipt of any notice from the Company of a
Suspension Period, the Purchaser will not sell any Registrable Securities
pursuant to the Shelf Registration Statement until (i) the Purchaser is advised
in writing by the Company that the use of the applicable prospectus may be
resumed, (ii) the Purchaser has received copies of any additional or
supplemental or amended prospectus, if applicable, and (iii) the Purchaser has
received copies of any additional or supplemental filings which are incorporated
or deemed to be incorporated by reference in such prospectus.
(c) In order to facilitate the public sale or other disposition
of all or any of the Registrable Securities by the Purchaser, the Company shall
furnish to the Purchaser with respect to the Registrable Securities registered
under the Shelf Registration Statement such number of copies of prospectuses,
prospectus supplements and preliminary prospectuses as the Purchaser reasonably
requests in conformity with the requirements of the Securities Act.
(d) The Company shall file any documents required of the Company
for normal blue sky clearance in states specified in writing by the Purchaser;
PROVIDED, HOWEVER, that the Company shall not be required to qualify to do
business or consent to service of process in any jurisdiction in which it is not
now so qualified or has not so consented.
(e) Other than fees and expenses, if any, of counsel or other
advisers to the Purchaser, which fees and expenses shall be borne by the
Purchaser (except as referred to in Section 16.8 below), the Company shall bear
all expenses (exclusive of any brokerage fees, underwriting discounts and
commissions) in connection with the procedures in paragraphs (a) through (d) of
this Section 12.1.
12.2 TRANSFER OF SECURITIES AFTER SHELF REGISTRATION. The Purchaser
agrees that the Purchaser will not effect any disposition of the Registrable
Securities that would constitute a sale within the meaning of the Securities
Act, except:
(i) pursuant to the Shelf Registration Statement, in which case
the Purchaser shall submit the certificates evidencing the Registrable
Securities to the Company's transfer agent, accompanied by a separate
"Purchaser's Certificate" (A) in the form of APPENDIX I attached hereto, (B)
executed by an officer of, or other authorized person designated by, the
Purchaser, and (C) to the effect that (1) the Registrable Securities have been
sold in accordance with the Shelf Registration Statement and (2) the requirement
of delivering a current prospectus has been satisfied; or
(ii) in a transaction exempt from registration under the
Securities Act.
20
12.3 INDEMNIFICATION. As used in this Section 12.3 the following terms
shall have the following respective meanings:
(a) "Selling Shareholder" shall mean the Purchaser and any
transferee of the Purchaser who is entitled to resell Registrable Securities
pursuant to the Shelf Registration Statement, including any underwriter involved
in such resale, and each person, if any, who controls such Selling Shareholder
within the meaning of Section 15 of the Securities Act, and each officer and
each director of such Selling Shareholder;
(b) "Shelf Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or relating to the
Shelf Registration Statement referred to in Section 12.1; and
(c) "Untrue Statement" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state in the
Shelf Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
The Company agrees to indemnify and hold harmless each Selling Shareholder
from and against any losses, claims, damages or liabilities to which such
Selling Shareholder may become subject (under the Securities Act or otherwise)
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any Untrue
Statement on or after the effective date of the Shelf Registration Statement, or
on or after the date of any prospectus or prospectus supplement or the date of
any sale by the Purchaser thereunder, or arise out of any failure by the Company
to fulfill any undertaking included in the Shelf Registration Statement and the
Company will reimburse such Selling Shareholder for any reasonable legal or
other expenses reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim; PROVIDED, HOWEVER, that the Company
shall not be liable to such Selling Shareholder in any such case to the extent
that such loss, claim, damage or liability arises out of, or is based upon, an
Untrue Statement made in such Shelf Registration Statement in reliance upon and
in conformity with written information furnished to the Company by or on behalf
of such Selling Shareholder specifically for use in preparation of the Shelf
Registration Statement, or the failure of such Selling Shareholder to comply
with the covenants and agreements contained in Section 12.1 or 12.2 hereof
respecting sale of the Registrable Securities or any statement or omission in
any prospectus that is corrected in any subsequent prospectus that was delivered
to the Selling Shareholder prior to the pertinent sale or sales by the Selling
Shareholder.
The Purchaser agrees to indemnify and hold harmless the Company (and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, each officer of the Company who signs the Shelf Registration
Statement
21
and each director of the Company) from and against any losses, claims, damages
or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any failure to
comply with the covenants and agreements contained in Section 12.1 or 12.2
hereof respecting sale of the Registrable Securities, or any Untrue Statement
contained in the Shelf Registration Statement on or after the effective date
thereof, or in any prospectus supplement as of its issue date or date of any
sale by the Purchaser thereunder, if such Untrue Statement was made in reliance
upon and in conformity with written information furnished by or on behalf of the
Purchaser specifically for use in preparation of the Shelf Registration
Statement, and the Purchaser will reimburse the Company (or such officer,
director or controlling person), as the case may be, for any legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim; provided that in no event shall any
indemnity by the Purchaser under this Section 12.3 exceed the gross proceeds
received by the Purchaser from the sale of Registrable Securities covered by
such Shelf Registration Statement.
Promptly after receipt by any indemnified person of a notice of a claim or
the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 12.3, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, and, subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person and such
indemnifying person shall have been notified thereof, such indemnifying person
shall be entitled to participate therein, and, to the extent it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to such
indemnified person of its election to assume the defense thereof, such
indemnifying person shall not be liable to such indemnified person for any legal
expenses subsequently incurred by such indemnified person in connection with the
defense thereof; PROVIDED, HOWEVER, that if there exists or shall exist a
conflict of interest that would make it inappropriate, in the opinion of counsel
to the indemnified person, for the same counsel to represent both the
indemnified person and such indemnifying person or any affiliate or associate
thereof, the indemnified person shall be entitled to retain its own counsel at
the expense of such indemnifying person; PROVIDED, HOWEVER, that no indemnifying
person shall be responsible for the fees and expenses of more than one separate
counsel for all indemnified parties.
12.4 TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions precedent
imposed by Section 6 or this Section 12 upon the transferability of the
Registrable Securities shall cease and terminate as to any particular number of
the Registrable
22
Securities when such Registrable Securities shall have been sold or otherwise
disposed of in accordance with the intended method of disposition set forth in
the Shelf Registration Statement covering such Registrable Securities or at such
time as an opinion of counsel satisfactory to the Company shall have been
rendered to the effect that such conditions are not necessary in order to comply
with the Securities Act.
12.5 INFORMATION AVAILABLE. So long as the Purchaser continues to own
any of the Registrable Securities and the Shelf Registration Statement is
effective covering the resale of Registrable Securities owned by the Purchaser,
the Company will furnish to the Purchaser:
(a) as soon as practicable after available (but in the case of
the Company's Annual Report to Shareholders, within one hundred twenty (120)
days after the end of each fiscal year of the Company), one copy of (i) its
Annual Report to Shareholders (which Annual Report shall contain financial
statements audited in accordance with generally accepted auditing standards
certified by a national firm of certified public accountants); (ii) its Annual
Report on Form 10-K (excluding exhibits); (iii) its quarterly reports on Form
10-Q (excluding exhibits); (iv) its Proxy Statement; and (v) its current reports
on Form 8-K, if any (excluding exhibits);
(b) upon the request of the Purchaser, all exhibits excluded by
the parentheticals to subparagraphs (a)(ii),(iii) and (v) of this Section 12.5,
in the form generally available to the public; and
(c) upon the reasonable request of the Purchaser, an adequate
number of copies of the prospectuses and supplements to supply to any other
party requiring such prospectuses.
12.6 CHANGES IN PURCHASER INFORMATION. The Purchaser agrees to promptly
notify the Company of any changes in the information set forth in the Shelf
Registration Statement regarding the Purchaser or the Purchaser's plan of
distribution set forth in such Shelf Registration Statement.
SECTION 13. INDEMNIFICATION FOR INCOMPLETE OR INACCURATE INFORMATION.
13.1 BY THE COMPANY. The Company agrees to indemnify and hold harmless
the Purchaser (and each person, if any, who controls the Purchaser within the
meaning of Section 15 of the Securities Act, and each officer, director and
employee of persons who control the Purchaser) from and against any losses,
claims, damages or liabilities to which the Purchaser (or any such officer,
director, employee or controlling person) may become subject (under the
Securities Act or otherwise) insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, (a)
23
any untrue statement of a material fact, or omission of a material fact, in any
information provided by the Company for use in the Offer to Purchase, as
contemplated in Section 1 thereof (including, without limitation any such
misstatement or omission in Sections 6, 7 and 8 of the Offer), and (b) the
Merger failing to qualify as a reorganization as defined in Section 368(a) of
the Internal Revenue Code of 1986 as amended, as a result of the transfer
contemplated hereby. Further, the Company will reimburse the Purchaser (or such
officer, director, employee or controlling person) for any reasonable legal or
other expenses reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim.
13.2 BY THE PURCHASER. The Purchaser, agrees to indemnify and hold
harmless the Company (and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act and each officer and director of
the Company) from and against any losses, claims, damages or liabilities to
which the Company (or any such officer, director or controlling person) may
become subject (under the Securities Act or otherwise) insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon, any untrue statement of a material fact, or
omission of a material fact in any information about the identity of the
Purchaser, the source of the Purchasers' funds or the Purchasers' plans and
intentions provided by the Purchaser for use in the Offer to Purchase as
contemplated by Section 1 hereof. Further, the Purchaser will reimburse the
Company (or such officer, director or controlling person) for any reasonable
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim.
13.3 PROCEDURE. The procedure with respect to claims under this Section
13 shall be the same as that provided in Section 12.3.
SECTION 14. TERMINATION.
14.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing: (a) by mutual written consent of the parties hereto; (b) by written
notice by any party if the consummation of the Rights Exchange shall violate any
nonappealable final order, decree or judgment of any court or governmental body
having competent jurisdiction; (c) by written notice by either of the Purchaser
or the Company, respectively, to the other party, upon the failure of any
closing condition applicable to either of the Purchaser or the Company,
respectively, which failure is not capable of being cured by the Termination
Date; (d) by written notice by the Company in accordance with Section 8.1 above
and (e) by written notice by either of the Purchaser or the Company,
respectively, to the other party, if the Closing has not occurred by the
Termination Date set forth in Section 4.1, unless the Closing has not occurred
due to the fault or bad faith of the terminating party. The parties agree that
this Agreement shall be terminated
24
immediately upon the effectiveness of the written notice or written consent
described above.
14.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided in Section 14.1, this Agreement shall forthwith become
void and there shall be no further liability of any party to this Agreement or
their respective officers, directors, employees, agents, representatives, or
shareholders, except as otherwise provided in this Agreement.
14.3 TERMINATION FEE. If this Agreement is terminated by the Company
pursuant to Section 14.1(d) above, which termination is the result of: (a) the
receipt by the Company of a Third-Party Offer during the term of this Agreement
and (b) the commitment by the Company to accept a Third-Party Offer (as such
Third-Party Offer may be amended from time to time) within six (6) months
following the Termination Date, then the Company shall, at the time of the
closing of such Third-Party Offer, pay the Purchaser a termination fee in the
amount of (i) any and all out-of-pocket expenses of the Purchaser (including,
without limitation, reasonable attorneys' fees) incurred in connection with this
Agreement (not to exceed $150,000) PLUS (ii) $750,000. If this Agreement is
terminated by the Company pursuant to Section 14.1(b), (c) or (e) above due to
the Company's inability to meet the conditions set forth herein, the Company
shall pay the expenses of the Purchaser referred to in clause (i) of this
Section 14.3.
SECTION 15. NOTICES.
All notices, requests, consents and other communications hereunder shall be
in writing, shall be sent by confirmed facsimile or mailed by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, and shall be deemed given when so sent in the case of
facsimile transmission, or when so received in the case of mail or courier, and
addressed as follows:
(a) if to the Company, to:
Medarex, Inc.
0000 Xxxxx 00 Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, President
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Satterlee, Stephens, Xxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
00
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000/9607
(b) if to the Purchaser, to:
Bay City Capital
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, Chief Financial Officer
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Heller, Ehrman, White & XxXxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
Any change of an address set forth in this Section 15 may be
accomplished by means of a notice sent in accordance with the terms of this
Section 15.
SECTION 16. MISCELLANEOUS.
16.1 WAIVERS AND AMENDMENTS. Neither this Agreement nor any provision
hereof may be changed, waived, discharged, terminated, modified or amended
except upon the written consent of the Company and the Purchaser.
16.2 SECTIONS; HEADINGS; DOLLAR AMOUNTS. Unless otherwise specified, all
references in this Agreement to "Sections" shall be to Sections of this
Agreement. The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement. All currency referred to herein shall be in U.S. dollars.
16.3 SEVERABILITY. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
26
16.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied to contracts
entered into and performed entirely in California by California residents,
without regard to conflicts of law principles.
16.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties. Delivery of an executed counterpart by
facsimile shall be the same as delivery of an original counterpart.
16.6 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
16.7 ENTIRE AGREEMENT. This Agreement and other documents delivered
pursuant hereto, including the exhibits, constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
16.8 PAYMENT OF FEES AND EXPENSES. Except as provided in Section 14.3,
each of the Company and the Purchaser shall bear its own expenses and legal fees
incurred on its behalf with respect to this Agreement and the transactions
contemplated hereby. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorney's fees, costs and necessary disbursements in addition to
any other relief to which such party may be entitled.
[SIGNATURE PAGE FOLLOWS THIS PAGE]
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
MEDAREX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
----------------------------------
Title: President
----------------------------------
BCC ACQUISITION I LLC
By: THE BAY CITY CAPITAL
FUND I, L.P.
Its: Manager
By: Bay City Capital Management LLC
Its: General Partner
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
----------------------------------
Title: Manager
----------------------------------
S-1
EXHIBIT A
OFFER TO PURCHASE
EXHIBIT B
LETTER TO HOLDERS
EXHIBIT C
FORM OF WARRANT AGREEMENT
EXHIBIT D
FORM OF LEGAL OPINION
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of New Jersey.
The Company has the requisite corporate power to own or lease its property
and assets and to conduct its business as currently conducted.
2. The Agreement has been duly authorized by all necessary corporate action on
the part of the Company, has been duly executed and delivered on behalf of
the Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except (a) as
limited by applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium and other laws of general applicability relating to or affecting
creditors' rights generally, (b) as limited by public policy or equitable
principles generally or the availability of equitable remedies, whether
such enforceability is considered in a proceeding in equity or at law, and
(c) as rights to indemnity or contribution or pursuant to Section 12.3 and
13.1 of the Agreement may be limited by applicable laws or principles of
public policy.
3. The Company has _________ authorized and, to such counsel's knowledge,
________ outstanding shares of capital stock. The Shares have been duly
authorized and, upon issuance and delivery against the surrender of the
Rights in accordance with the Agreement, will be validly issued, fully paid
and nonassessable. Except as disclosed in the Agreement, to such counsel's
knowledge, there are no options, warrants, conversion privileges,
preemptive rights or other rights presently outstanding to purchase or
receive any of the authorized but unissued capital stock of the Company or
the Shares, other than the shares reserved for issuance under the Merger
Agreement or ________________.
4. The execution and delivery of the Agreement, the execution and delivery of
the Offer to Purchase, the consummation of the Rights Exchange and the
consummation of the Purchaser's Offer do not violate any provisions of the
Company's Articles or Bylaws, and do not conflict with or constitute a
default under the provisions of any agreement (including, without
limitation, the Merger Agreement, agreements involving the Major Strategic
Partners, and any agreement between the Company and The Nasdaq National
Market) to which the Company is a party, and do not violate or contravene
(a) any law applicable to the Company and known to such counsel other than
as may be required by the securities or Blue Sky laws of the various states
as to which such counsel does not express an opinion or (b) any order,
writ, judgment, injunction, decree, determination or award applicable to
the Company and known to such counsel, except for a default, violation or
contravention which would not have a
material adverse effect on the business, assets, financial condition or
results of operations of the Company.
5. To such counsel's knowledge, no holders of securities of the Company (other
than the Purchaser and as set forth in the Agreement) have rights to the
registration of such securities following the Effective Date that have not
been waived or satisfied.
6. Except as set forth in the Agreement, to such counsel's knowledge, there is
no action, proceeding or investigation pending or threatened against the
Company which could reasonably be anticipated to result, either
individually or in the aggregate, in any material adverse change in the
business, assets, financial condition or results of operations of the
Company.
7. Assuming the accuracy of the Purchaser's representations and warranties and
the fulfillment of the conditions contained in the Agreement, the issuance
of the Shares by the Company to the Purchaser in exchange for the Rights is
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act").
8. To such counsel's knowledge, no material governmental consents, approvals,
authorizations, orders, filings, registrations or qualifications are
required for the issuance of the Shares by the Company under the Agreement
other than as may be required by the securities or Blue Sky laws of the
various states or by the bylaws and rules of the National Association of
Securities Dealers.
9. The waiver by the Company of the restrictions on transferability of the
Rights set forth in Section 2.1(e) of the Merger Agreement is valid and
effective. The Merger Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed and
delivered on behalf of the Company and, together with the Rights created
therein, is, and following the Closing of the transactions contemplated by
the Agreement will remain, a valid and binding obligation of the Company
enforceable in accordance with its terms except (a) as limited by
applicable bankruptcy, insolvency, reorganization, arrangement, moratorium
and other laws of general applicability relating to or affecting creditors'
rights generally, (b) as limited by public policy or equitable principles
generally or the availability of equitable remedies, whether such
enforceability is considered in a proceeding in equity or at law, and (c)
as rights to indemnity or contribution may be limited by applicable laws or
principles of public policy; PROVIDED only that, upon issuance of the
Shares to the Purchaser under the Agreement the Company will have no
further obligation with respect to the Rights assigned to the Purchaser or
with respect to the former Holders thereof. The Rights are not "equity
securities" of the Company within the meaning of the Securities Exchange
Act of 1934 or the Rules of the Securities and Exchange Commission
promulgated thereunder. The Merger has been duly consummated in accordance
with the terms of the Merger Agreement and the Rights have been duly
created pursuant to the Merger Agreement.
APPENDIX I
MEDAREX, INC.
PURCHASER'S CERTIFICATE OF RESALE OF THE SHARES
(i) The undersigned, an officer of, or other person duly
authorized by
______________________________________________________________________
[fill in official name of individual or institution]
hereby certifies that he/she [said institution] is the Purchaser of the Shares
evidenced by the attached stock certificate(s) and as such, sold such Shares on
__________________
[date]
in accordance with shelf registration statement number ________________________
________________________________________________________________________
[fill in the number of or otherwise identify shelf registration statement]
and the requirement of delivering a current prospectus and current annual,
quarterly and current reports (Forms 10-K, 10-Q and 8-K) by the Company has been
complied with in connection with such sale.
PRINT OR TYPE:
Name of Purchaser:
------------------------------
Name of Individual representing Purchaser:
------------------------------
Title of Individual representing Purchaser:
------------------------------
SIGNATURE BY:
Individual representing Purchaser:
------------------------------
SCHEDULE 1
(Table of Former GenPharm share values)
Schedule 2
(List of Holders)
Schedule 3
(Schedule of Exceptions)
EXHIBITS, APPENDICES, AND SCHEDULES
EXHIBITS
Exhibit A Offer to Purchase
Exhibit B Letter to Holders
Exhibit C Form of Warrant Agreement
Exhibit D Opinion of Company counsel
APPENDICES
Appendix I Purchaser's Certificate of Resale of Shares
SCHEDULES
Schedule 1 Table of Former GenPharm share values
Schedule 2 List of Holders
Schedule 3 Schedule of Exceptions
