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EXHIBIT 4.1
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the "AGREEMENT"), dated as of November
13, 1997, by and among Cell Genesys, Inc., a Delaware corporation, with
headquarters located at 000 Xxxxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxxxxx 00000 (the
"COMPANY"), and the investors listed on the Schedule of Buyers attached hereto
(individually, a "BUYER" and collectively, the "BUYERS").
WHEREAS:
A. The Company and the Buyers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Rule 506 of Regulation D ("REGULATION D") as promulgated by the United States
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended (the "1933 ACT");
B. The Company has authorized the following new series of its Preferred
Stock, par value $0.001 per share (the "PREFERRED STOCK"): the Company's Series
B Convertible Preferred Stock (the "PREFERRED SHARES"), which shall be
convertible into shares of the Company's Common Stock, par value $0.001 per
share (the "COMMON STOCK") (as converted, the "CONVERSION SHARES"), in
accordance with the terms of the Company's Certificate of Designations,
Preferences and Rights of the Preferred Shares, substantially in the form
attached hereto as Exhibit A (the "CERTIFICATE OF DESIGNATIONS");
C. The Buyers wish to purchase, upon the terms and conditions stated in
this Agreement, initially an aggregate of 2,000 of the Preferred Shares (the
"INITIAL PREFERRED SHARES") in the respective amounts set forth opposite each
Buyer's name on the Schedule of Buyers;
D. Subject to the terms and conditions set forth in this Agreement, each
Buyer may have the right to purchase a number of additional Preferred Shares
equal to up to 50% of the number of Preferred Shares held by such Buyer on the
date which is 365 days after the Initial Closing Date (as defined below) (the
"ADDITIONAL PREFERRED SHARES") and the Company may have the right to cause the
Buyers to purchase up to an aggregate of 1,000 Preferred Shares (pro rata based
on the number of Initial Preferred Shares each Buyer purchased in relation to
the total number of Initial Preferred Shares) (the "PUT PREFERRED SHARES") (the
Initial Preferred Shares, the Additional Preferred Shares and the Put Preferred
Shares collectively are referred to in this Agreement as the "PREFERRED
SHARES");
E. Contemporaneously with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement
substantially in the form attached hereto as Exhibit B (the "REGISTRATION RIGHTS
AGREEMENT") pursuant to which the Company has agreed to provide certain
registration rights under the 1933 Act and the rules and regulations promulgated
thereunder, and applicable state securities laws.
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NOW THEREFORE, the Company and the Buyers hereby agree as follows:
1. PURCHASE AND SALE OF PREFERRED SHARES.
a. Purchase of Preferred Shares. Subject to satisfaction (or
waiver) of the conditions set forth in Sections 6(a) and 7(a) below, the Company
shall issue and sell to the Buyers and the Buyers severally shall purchase from
the Company an aggregate of 2,000 Initial Preferred Shares, in the respective
amounts set forth opposite each Buyer's name on the Schedule of Buyers (the
"INITIAL CLOSING"). Subject to the satisfaction (or waiver) of the conditions
set forth in Sections 1(c), 6(b) and 7(b) below, at the option of each Buyer,
the Company shall issue and sell to each such Buyer and each such Buyer shall
purchase from the Company at multiple closings, if applicable, an aggregate of
up to that number of Additional Preferred Shares equal to 50% of the number of
the Initial Preferred Shares held by such Buyer on the date which is 365 days
after the Initial Closing Date (the "ADDITIONAL CLOSING"). Subject to the
satisfaction (or waiver) of the conditions set forth in Sections 1(d), 1(e),
6(c) and 7(c) below, the Company may require that each Buyer purchase that
number of additional Preferred Shares equal to such Buyer's pro rata portion of
up to 1,000 Preferred Shares (based on the number of Initial Preferred Shares
each Buyer purchased in relation to the total number of Initial Preferred Shares
purchased by the Buyers) (the "PUT CLOSING"). The Initial Closing, the
Additional Closing and the Put Closing collectively are referred to in this
Agreement as the "CLOSINGS." The purchase price (the "PURCHASE PRICE") of each
Preferred Share at each of the Closings shall be $10,000.
b. The Initial Closing Date. The date and time of the Initial
Closing (the "INITIAL CLOSING DATE") shall be 10:00 a.m. Central Time, within
two (2) business days following the date hereof, subject to satisfaction (or
waiver) of the conditions to the Initial Closing set forth in Sections 6(a) and
7(a) below (or such later date as is mutually agreed to by the Company and the
Buyers). The Initial Closing shall occur on the Initial Closing Date at the
offices of Xxxxxx Xxxxxx & Xxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000-0000.
c. The Additional Closing Date. The date and time of each of the
Additional Closings (the "ADDITIONAL CLOSING DATES") shall be 10:00 a.m. Central
Time, on the date specified in a Buyer's Additional Share Notice (as defined
below), subject to satisfaction (or waiver) of the conditions to the Additional
Closing set forth in Sections 6(b) and 7(b) and the conditions set forth in this
paragraph (or such later date as is mutually agreed to by the Company and the
Buyers). During the period beginning on and including the date which is 365 days
after the Initial Closing Date and ending on the date which is four years after
the Initial Closing Date, subject to earlier termination as provided below (the
"ADDITIONAL NOTICE PERIOD"), but subject to the requirements of Sections 6(b)
and 7(b), each Buyer may purchase Additional Preferred Shares by delivering
written notice to the Company (an "ADDITIONAL SHARE NOTICE") at least seven days
but not more than 20 days prior (an "ADDITIONAL SHARE NOTICE DATE") to the
Additional Closing Date set forth in such Buyer's Additional Share Notice. Each
Additional Share Notice shall set forth (i) the number of Additional Preferred
Shares to be purchased by such Buyer at such Additional Closing, (ii) the
aggregate Purchase Price for such Additional Preferred Shares and (iii) the date
selected by such Buyer for the Additional Closing Date. Notwithstanding the
foregoing, no Buyer shall be entitled to deliver an
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Additional Share Notice unless on the date of the delivery of the Additional
Share Notice the Market Price (as defined in the Certificate of Designations) of
the Common Stock is greater than the Fixed Conversion Price (as defined in the
Certificate of Designations) then in effect of the Initial Preferred Shares. In
the event that for any period of 20 consecutive trading days during the period
beginning on and including the date which is two years after the Initial Closing
Date and ending on the date which is three years after the Initial Closing Date
the Closing Bid Price (as defined in the Certificate of Designations) of the
Common Stock is greater than 125% of the Fixed Conversion Price of the Initial
Preferred Shares, then the Additional Notice Period shall end on the date which
is three years after the Initial Closing Date. Each Additional Closing shall
occur on the Additional Closing Date at the offices of Xxxxxx Xxxxxx & Xxxxx,
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 60661- 3693.
d. The Put Closing Date. The date and time of the Put Closing
(the "PUT CLOSING DATE") shall be 10:00 a.m. Central Time, on the date specified
in the Company's Put Share Notice (as defined below), subject to satisfaction
(or waiver) of the conditions to the Put Closing set forth in Sections 6(c) and
7(c) and the conditions set forth in Section 1(e), (or such later date as is
mutually agreed to by the Company and the Buyers). During the period beginning
on and including the date which is 360 days after the Initial Closing Date and
ending on the date which is 540 days after the Initial Closing Date (the "PUT
NOTICE PERIOD"), but subject to the requirements of Sections 6(c) and 7(c) and
satisfaction of the Put Notice Conditions (as defined in Section 1(e) below),
the Company on only one occasion may require each Buyer to purchase Put
Preferred Shares by delivering written notice to each of the Buyers (a "PUT
SHARE NOTICE") during the Put Notice Period at least 30 days but not more than
45 days (the "PUT SHARE NOTICE DATE") prior to the Put Closing Date set forth in
the Company's Put Share Notice. The Company's Put Share Notice shall set forth
(i) each Buyer's pro rata portion (based on the number of Initial Preferred
Shares each Buyer purchased in relation to the total number of Initial Preferred
Shares purchased by the Buyers) of the aggregate number of Put Preferred Shares,
which aggregate number shall not exceed 1,000 Preferred Shares, which the
Company is requiring each Buyer to purchase at the Put Closing, (ii) the
aggregate Purchase Price for each such Buyer's Put Preferred Shares and (iii)
the date selected by the Company for the Put Closing Date. The Put Closing shall
occur on the Put Closing Date at the offices of Xxxxxx Xxxxxx & Xxxxx, 000 Xxxx
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000. The Initial Closing
Date, the Additional Closing Dates and the Put Closing Date collectively are
referred to in this Agreement as the "CLOSING DATES."
e. The Put Notice Conditions. Notwithstanding anything in this
agreement to the contrary, the Company shall not be entitled to deliver a Put
Share Notice and require the Buyers to purchase the Put Preferred Shares unless,
in addition to the satisfaction of the requirements of Sections 6(c) and 7(c),
all of the following conditions (the "PUT NOTICE CONDITIONS") are satisfied: (i)
the Company's stockholders shall have approved the issuance of the Securities
(as defined below) on or prior to the Put Share Notice Date, unless the Company
shall have been advised in writing by The Nasdaq Stock Market, Inc. (or The New
York Stock Exchange, Inc. or The American Stock Exchange, Inc., if the Common
Stock is then listed on such exchange) that the rules of such exchange would not
require the approval of the stockholders of the Company for the issuance of a
number of Conversion Shares equal to at least 20% of the number of shares of
Common Stock issued and outstanding on the Initial Issuance Date; (ii) during
the period beginning 90 days prior to the Put
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Closing Date and ending on and including the Put Closing Date, the Registration
Statement (as defined in the Registration Rights Agreement) at all times shall
be effective and available for the sale of no less than 125% of the sum of (A)
the number of Conversion Shares then issuable upon the conversion of all
outstanding Preferred Shares and the Put Preferred Shares to be issued by the
Company, and (B) number of Conversion Shares then held by the Buyers; (iii)
during the period beginning 90 days prior to the Put Share Closing Date and
ending on and including the Put Closing Date, the Common Stock is designated for
quotation on the Nasdaq National Market, The New York Stock Exchange, Inc. or
The American Stock Exchange, Inc. and is not suspended from trading on such
exchange; (iv) no event constituting a Major Business Event (as defined below),
including an agreement to consummate a Major Business Event, or a Triggering
Event set forth in Section 3(d)(iv) of the Certificate of Designations shall
have occurred from the period beginning on the Initial Issuance Date and ending
on and including the Put Closing Date; (v) on each day during the period
beginning 60 days prior to the Put Closing Date and ending on and including the
Put Closing Date, the Market Price of the Common Stock is not less than the
Fixed Conversion Price of the Initial Preferred Shares; (vi) during the period
beginning on and including the Put Share Notice Date and ending on and including
the Put Closing Date, the Market Price of the Common Stock is not less than 90%
of the Market Price on the Put Share Notice Date; (vii) during the period
beginning on the Initial Issuance Date and ending on and including the Put
Closing Date, the Company shall have delivered Conversion Shares upon conversion
of the Preferred Shares on a timely basis as set forth in Section 2(f)(ii) of
the Certificate of Designations and otherwise shall have been in compliance with
and shall not have breached the provisions of the Transaction Documents (as
defined below) and the Certificate of Designations; and (viii) the Company shall
not have previously delivered a Put Share Notice. For purposes of this Section
1(e) "MAJOR BUSINESS EVENT" means (x) consolidation, merger or other business
combination of the Company with another entity (other than pursuant to a
migratory merger effected solely for the purpose of changing the Company's
jurisdiction of incorporation, (y) the sale or transfer of all or substantially
all of the Company's assets or (z) a purchase, tender or exchange offer made to
and accepted by the holders of more than 50% of the outstanding shares of Common
Stock.
f. Form of Payment. On each of the Closing Dates, (i) each Buyer
shall pay the Purchase Price to the Company for the Preferred Shares to be
issued and sold to such Buyer at the respective Closing, by wire transfer of
immediately available funds in accordance with the Company's written wire
instructions, and (ii) the Company shall deliver to each Buyer, stock
certificates (in the denominations as such Buyer shall request) (the "STOCK
CERTIFICATES") representing such number of the Preferred Shares which such Buyer
is then purchasing (as indicated opposite such Buyer's name on the Schedule of
Buyers), duly executed on behalf of the Company and registered in the name of
such Buyer or its designee.
2. BUYER'S REPRESENTATIONS AND WARRANTIES.
Each Buyer represents and warrants with respect to only itself
that:
a. Investment Purpose. Such Buyer (i) is acquiring the Preferred
Shares and (ii) upon conversion of the Preferred Shares, will acquire the
Conversion Shares then issuable (the Preferred Shares and the Conversion Shares
collectively are referred to herein as the "SECURITIES"),
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for its own account for investment only and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempted under the 1933 Act; provided, however,
that by making the representations herein, such Buyer does not agree to hold any
of the Securities for any minimum or other specific term and reserves the right
to dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act.
b. Accredited Investor Status. Such Buyer is an "accredited
investor" as that term is defined in Rule 501(a)(3) of Regulation D.
c. Reliance on Exemptions. Such Buyer understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and
such Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of such Buyer
to acquire such securities.
d. Information. Such Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities
which have been requested by such Buyer, including all SEC Documents (as defined
below). Such Buyer and its advisors, if any, have been afforded the opportunity
to review materials, including the "Risk Factors" sections in the Company's Form
10-K filed as an SEC Document, and to ask questions of the Company. Neither such
inquiries nor any other due diligence investigations conducted by such Buyer or
its advisors, if any, or its representatives shall modify, amend or affect such
Buyer's right to rely on the Company's representations and warranties contained
in Section 3 below. Such Buyer understands that its investment in the Securities
involves a high degree of risk. Such Buyer has sought such accounting, legal and
tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Securities.
e. No Governmental Review. Such Buyer understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
f. Transfer or Resale. Such Buyer understands that except as
provided in the Registration Rights Agreement: (i) the Securities have not been
and are not being registered under the 1933 Act or any state securities laws,
and may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, (B) such Buyer shall have delivered to the
Company an opinion of counsel, in a generally acceptable form, to the effect
that such Securities to be sold, assigned or transferred may be sold, assigned
or transferred pursuant to an exemption from such registration, or (C) such
Buyer provides the Company with reasonable assurance that such Securities can be
sold, assigned or transferred pursuant to Rule 144 promulgated under the 1933
Act (or a successor rule thereto)("RULE 144"); (ii) any sale of the Securities
made in reliance on Rule 144
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may be made only in accordance with the terms of Rule 144 and further, if Rule
144 is not applicable, any resale of the Securities under circumstances in which
the seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 0000 Xxx) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder; and (iii) neither the Company nor any other person is under any
obligation to register such Securities under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder.
g. Legends. Such Buyer understands that the certificates or other
instruments representing the Preferred Shares and, until such time as the sale
of the Conversion Shares have been registered under the 1933 Act as contemplated
by the Registration Rights Agreement, the stock certificates representing the
Conversion Shares, except as set forth below, shall bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE
SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if, unless otherwise required by state securities laws, (i) such
Securities are registered for sale under the 1933 Act, (ii) in connection with a
sale transaction, such holder provides the Company with an opinion of counsel,
in a generally acceptable form, to the effect that a public sale, assignment or
transfer of such Securities may be made without registration under the 1933 Act,
or (iii) such holder provides the Company with reasonable assurances that such
Securities can be sold pursuant to Rule 144 without any restriction as to the
number of securities acquired as of a particular date that can then be
immediately sold. Each Buyer acknowledges, covenants and agrees to sell the
Securities represented by a certificate(s) from which the legend has been
removed, only pursuant to (i) a registration statement effective under the 1933
Act, or (ii) advice of counsel that such sale is exempt from registration
required by Section 5 of the 1933 Act.
h. Authorization; Enforcement. This Agreement has been duly and
validly authorized, executed and delivered on behalf of such Buyer and is a
valid and binding agreement of such Buyer enforceable in accordance with its
terms, subject as to enforceability to general principles of equity
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and to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the
enforcement of applicable creditors' rights and remedies.
i. Residency. Such Buyer is a resident of that country specified
in the Schedule of Buyers.
j. Section 9 of the Securities Exchange Act. So long as a Buyer
holds any Preferred Shares, such Buyer will comply at all times with the
provisions of Section 9 of the Securities Exchange Act of 1934, as amended (the
"1934 ACT"), and the rules promulgated thereunder with respect to transactions
involving the securities of the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the Buyers that:
a. Organization and Qualification. The Company and its
subsidiaries (a complete list of which is set forth in Schedule 3(a)) are
corporations duly organized and validly existing in good standing under the laws
of the jurisdiction in which they are incorporated, and have the requisite
corporate power to own their properties and to carry on their business as now
being conducted. Each of the Company and its subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect. As used in this
Agreement, "MATERIAL ADVERSE EFFECT" means any material adverse effect on the
business, properties, assets, operations, results of operations, financial
condition or prospects of the Company and its subsidiaries, if any, taken as a
whole, or on the transactions contemplated hereby or by the agreements and
instruments to be entered into in connection herewith.
b. Authorization; Enforcement; Compliance with Other Instruments.
(i) The Company has the requisite corporate power and authority to enter into
and perform this Agreement, the Registration Rights Agreement, the Irrevocable
Transfer Agent Instructions (as defined in Section 5) and each of the other
agreements entered into by the parties hereto in connection with the
transactions contemplated by this Agreement (collectively, the "TRANSACTION
DOCUMENTS"), and to issue the Securities in accordance with the terms hereof and
thereof, (ii) the execution and delivery of the Transaction Documents and the
Certificate of Designations by the Company and the consummation by it of the
transactions contemplated hereby and thereby, including without limitation the
issuance of the Preferred Shares and the reservation for issuance and the
issuance of the Conversion Shares issuable upon conversion thereof, have been
duly authorized by the Company's Board of Directors and no further consent or
authorization is required by the Company, its Board of Directors or its
stockholders, (iii) the Transaction Documents have been duly executed and
delivered by the Company, (iv) the Transaction Documents constitute the valid
and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies, and (v)
prior to each of the Closing Dates, the
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Certificate of Designations has been filed with the Secretary of State of the
State of Delaware and will be in full force and effect, enforceable against the
Company in accordance with its terms.
c. Capitalization. As of November 7, 1997, the authorized capital
stock of the Company consists of (i) 75,000,000 shares of Common Stock, of
which 28,144,250 shares were issued and outstanding, 4,611,537 shares are
reserved and available for issuance pursuant to the Company's stock option and
purchase plans, 1,666,667 shares are reserved and available for issuance upon
conversion of the Convertible Note dated March 27, 1997 in the original
principal amount of $15,000,000 held by GenPharm (the "GENPHARM NOTE"),
1,487,902 shares are reserved and available for issuance upon exercise of the
warrants to purchase Common Stock and at the exercise prices set forth in
Schedule 3(c) (the "WARRANTS"), and no shares are reserved for issuance pursuant
to securities (other than the Preferred Shares, the Warrants and the GenPharm
Note) exercisable or exchangeable for, or convertible into, shares of Common
Stock and (ii) 5,000,000 shares of Preferred Stock, of which 200,000 shares have
been designated Series A Participating Preferred Stock and of which, as of the
date hereof, none were issued and outstanding. All of such outstanding shares
have been, or upon issuance will be, validly issued and are fully paid and
nonassessable. Except as disclosed in Schedule 3(c), no shares of Common Stock
or Preferred Stock are subject to preemptive rights or any other similar rights
or any liens or encumbrances suffered or permitted by the Company. Except as
disclosed in Schedule 3(c), as of the effective date of this Agreement, (i)
there are no outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its subsidiaries, (ii) there
are no outstanding debt securities, (iii) there are no agreements or
arrangements under which the Company or any of its subsidiaries is obligated to
register the sale of any of their securities under the 1933 Act (except the
Registration Rights Agreement) and (iv) there are no outstanding securities of
the Company or any of its subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its subsidiaries is or may become
bound to redeem a security of the Company or any of its subsidiaries. Except as
disclosed in Schedule 3(c), there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Agreement. The Company has furnished to the
Buyers true and correct copies of the Company's Certificate of Incorporation, as
amended and as in effect on the date hereof (the "CERTIFICATE OF
INCORPORATION"), and the Company's By-laws, as in effect on the date hereof (the
"BY-LAWS"), and the terms of all securities convertible into or exercisable for
Common Stock and the material rights of the holders thereof in respect thereto.
d. Issuance of Securities. The Preferred Shares are duly
authorized and, upon issuance in accordance with the terms hereof, shall be (i)
validly issued, fully paid and non-assessable, (ii) free from all taxes, liens
and charges with respect to the issue thereof and (iii) entitled to the rights
and preferences set forth in the Certificate of Designations. 5,624,000 shares
of Common Stock (subject to adjustment pursuant to the Company's covenant set
forth in Section 4(f)
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below) have been duly authorized and reserved for issuance upon conversion of
the Preferred Shares. Upon conversion in accordance with the Certificate of
Designations, the Conversion Shares will be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof, with the holders being entitled to all rights accorded to a
holder of Common Stock. The issuance by the Company of the Securities is exempt
from registration under the 1933 Act.
e. No Conflicts. Except as disclosed in Schedule 3(e), the
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the reservation for issuance and
issuance of the Conversion Shares) will not (i) result in a violation of the
Certificate of Incorporation, any Certificate of Designations, Preferences and
Rights of any outstanding series of Preferred Stock of the Company or the
By-laws, (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
subsidiaries is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations and the rules and regulations of the principal market or
exchange on which the Common Stock is traded or listed) applicable to the
Company or any of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries is bound or affected, except to the extent
that matters within clauses (ii) and (iii) immediately above would not have a
Material Adverse Effect. Except as disclosed in Schedule 3(e), neither the
Company nor its subsidiaries is in violation of any term of or in default under
(i) the Certificate of Incorporation, any Certificate of Designation,
Preferences and Rights of any outstanding series of Preferred Stock or the
By-laws or their organizational charter or by-laws, respectively, or (ii) any
contract, agreement, mortgage, indebtedness, indenture, instrument, judgment,
decree or order or any statute, rule or regulation applicable to the Company or
its subsidiaries, except to the extent that such violation or default would not
have a Material Adverse Effect. The business of the Company and its subsidiaries
is not being conducted, and shall not be conducted, in violation of any law,
ordinance, regulation of any governmental entity. Except as specifically
contemplated by this Agreement and as required under the 1933 Act, the Company
is not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under or contemplated by the
Transaction Documents or the Certificate of Designations in accordance with the
terms hereof or thereof. Except as disclosed in Schedule 3(e), all consents,
authorizations, orders, filings and registrations which the Company is required
to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the date hereof. The Company and its subsidiaries are unaware of any
facts or circumstances which might give rise to any of the foregoing. The
Company is not in violation of the listing requirements of the Nasdaq National
Market as in effect on the date hereof and on each of the Closing Dates and is
not aware of any facts which would reasonably lead to delisting of the Common
Stock by the Nasdaq National Market in the foreseeable future.
f. SEC Documents; Financial Statements. Since December 31, 1995,
the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements and schedules
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thereto and documents incorporated by reference therein being hereinafter
referred to as the "SEC DOCUMENTS"). The Company has made available to each
Buyer or its respective representatives true and complete copies of the SEC
Documents. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). No other information provided by or on behalf of the Company to
the Buyers which is not included in the SEC Documents, including, without
limitation, information referred to in Section 2(d) of this Agreement, contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading. Neither the
Company nor any of its subsidiaries or any of their officers, directors,
employees or agents have provided the Buyers with any material, nonpublic
information.
g. Absence of Certain Changes. Except as disclosed in Schedule
3(g), since December 31, 1996 there has been no material adverse change and no
material adverse development in the business, properties, operations, financial
condition or results of operations of the Company or its subsidiaries. The
Company has not taken any steps, and does not currently expect to take any
steps, to seek protection pursuant to any bankruptcy law nor does the Company or
any of its subsidiaries have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy proceedings.
h. Absence of Litigation. There is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the knowledge of the
Company or any of its subsidiaries, threatened against or affecting the Company,
the Common Stock or any of the Company's subsidiaries or any of the Company's or
the Company's subsidiaries' officers or directors in their capacities as such,
except as expressly set forth in Schedule 3(h).
i. Acknowledgment Regarding Buyers' Purchase of Preferred Shares.
The Company acknowledges and agrees that each of the Buyers is acting solely in
the capacity of arm's length purchaser with respect to the Transaction Documents
and the transactions contemplated thereby. The Company further acknowledges that
each Buyer is not acting as a financial advisor or fiduciary of the Company (or
in any similar capacity) with respect to the Transaction Documents and
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the transactions contemplated thereby and any advice given by any of the Buyers
or any of their respective representatives or agents in connection with the
Transaction Documents and the transactions contemplated thereby is merely
incidental to such Buyer's purchase of the Securities. The Company further
represents to each Buyer that the Company's decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives.
j. No Undisclosed Events, Liabilities, Developments or
Circumstances. No material event, liability, development or circumstance has
occurred or exists, with respect to the Company or its subsidiaries or their
respective business, properties, prospects, operations or financial condition,
that would be required to be disclosed by the Company under applicable
securities laws on a registration statement (including by way of incorporation
by reference) filed with the SEC relating to an issuance and sale by the Company
of its Common Stock and which has not been publicly announced.
k. No General Solicitation. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the 0000 Xxx) in connection with the offer or sale of the
Securities.
l. No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of any of
the Securities under the 1933 Act or cause this offering of Securities to be
integrated with prior offerings by the Company for purposes of the 1933 Act or
any applicable stockholder approval provisions, including, without limitation,
under the rules and regulations of the Nasdaq National Market, nor will the
Company or any of its subsidiaries take any action or steps that would require
registration of the Securities under the 1933 Act or cause the offering of the
Securities to be integrated with other offerings.
m. Employee Relations. Neither the Company nor any of its
subsidiaries is involved in any union labor dispute nor, to the knowledge of the
Company or any of its subsidiaries, is any such dispute threatened. Neither the
Company nor any of its subsidiaries is a party to a collective bargaining
agreement, and the Company and its subsidiaries believe that relations with
their employees are good.
n. Intellectual Property Rights. To the knowledge of the Company,
the Company and its subsidiaries own or possess adequate rights or licenses to
use all trademarks, trade names, service marks, service xxxx registrations,
service names, patents, patent rights, copyrights, inventions, licenses,
approvals, governmental authorizations, trade secrets and rights to conduct
their respective businesses as now conducted for the purposes of conducting
research and clinical trials, except to the extent that the failure to possess
such rights or licenses would not have a Material Adverse Effect, and except
further to the extent that the Company or its subsidiaries lack such rights or
licenses, they are using or shall use commercially reasonable efforts to secure
such rights or licenses. The Company and its subsidiaries do not have any
knowledge of any infringement by the
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Company or its subsidiaries of trademark, trade name rights, patents, patent
rights, copyrights, inventions, licenses, service names, service marks, service
xxxx registrations, trade secret or other similar rights of others, or of any
such development of similar or identical trade secrets or technical information
by others and, except as set forth on Schedule 3(n), there is no claim, action
or proceeding being made or brought against, or to the Company's knowledge,
being threatened against, the Company or its subsidiaries regarding trademark,
trade name, patents, patent rights, invention, copyright, license, service
names, service marks, service xxxx registrations, trade secret or other
infringement; and the Company and its subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing, except for such
facts and circumstances which would not have a Material Adverse Effect.
o. Environmental Laws. The Company and its subsidiaries (i) are
in compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except to the extent that
the matters within clauses (i), (ii) and (iii) above would not have a Material
Adverse Effect.
p. Title. The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, except to the extent that the
failure to have good and marketable title would not have a Material Adverse
Effect, in each case free and clear of all liens, encumbrances and defects
except such as are described in Schedule 3(p) or such as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company or any of its subsidiaries.
Any real property and facilities held under lease by the Company or any of its
subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
subsidiaries.
q. Insurance. The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and its
subsidiaries are engaged. Neither the Company nor any of its subsidiaries has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not materially and adversely affect the condition, financial or otherwise,
or the earnings, business or operations of the Company and its subsidiaries,
taken as a whole.
r. Regulatory Permits. The Company and its subsidiaries possess
all certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, except to the extent that the failure to possess such certificates,
authorizations and permits would not have a Material Adverse Effect; and neither
the
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Company nor any such subsidiary has received any notice of proceedings relating
to the revocation or modification of any such certificate, authorization or
permit.
s. Internal Accounting Controls. The Company and each of its
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
t. No Materially Adverse Contracts, Etc. Neither the Company nor
any of its subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation which in the
judgment of the Company's officers has or is expected in the future to have a
Material Adverse Effect.
u. Tax Status. Except as set forth on Schedule 3(u), the Company
and each of its subsidiaries has made or filed all federal and state income and
all other tax returns, reports and declarations required by any jurisdiction to
which it is subject (unless and only to the extent that the Company and each of
its subsidiaries has set aside on its books provisions reasonably adequate for
the payment of all unpaid and unreported taxes) and has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim.
v. Dilutive Effect. The Company understands and acknowledges that
the number of Conversion Shares issuable upon conversion of the Preferred Shares
issuable will increase in certain circumstances. The Company further
acknowledges that its obligation to issue Conversion Shares upon conversion of
the Preferred Shares in accordance with this Agreement and the Certificate of
Designations is absolute and unconditional regardless of the dilutive effect
that such issuance may have on the ownership interests of other stockholders of
the Company.
w. No Other Agreements. The Company has not, directly or
indirectly, made any agreements with any Buyers relating to the terms or
conditions of the transactions contemplated by the Transaction Documents except
as set forth in the Transaction Documents.
4. COVENANTS.
a. Best Efforts. Each party shall use its best efforts timely to
satisfy each of the conditions to be satisfied by it as provided in Sections 6
and 7 of this Agreement.
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b. Form D. The Company agrees to file a Form D with respect to
the Securities as required under Regulation D and to provide a copy thereof to
each Buyer promptly after such filing. The Company shall, on or before each of
the Closing Dates, take such action as the Company shall reasonably determine is
necessary to qualify the Securities for, or obtain exemption for the Securities
for, sale to the Buyers at each of the Closings pursuant to this Agreement under
applicable securities or "Blue Sky" laws of the states of the United States, and
shall provide evidence of any such action so taken to the Buyers on or prior to
the Closing Date.
c. Reporting Status. Until the earlier of (i) the date as of
which the Investors (as that term is defined in the Registration Rights
Agreement) may sell all of the Conversion Shares without restriction pursuant to
Rule 144(k) promulgated under the 1933 Act (or successor thereto), or (ii) the
date on which (A) the Investors shall have sold all the Conversion Shares and
(B) none of the Preferred Shares is outstanding (the "REGISTRATION PERIOD"), the
Company shall file all reports required to be filed with the SEC pursuant to the
1934 Act, and the Company shall not terminate its status as an issuer required
to file reports under the 1934 Act even if the 1934 Act or the rules and
regulations thereunder would otherwise permit such termination.
d. Use of Proceeds. The Company will use the proceeds from the
sale of the Preferred Shares for substantially the same purposes and in
substantially the same amounts as indicated in Schedule 4(d).
e. Financial Information. The Company agrees to send the
following to each Investor (as that term is defined in the Registration Rights
Agreement) during the Registration Period: (i) within two (2) days after the
filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, its
Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and any
registration statements or amendments filed pursuant to the 1933 Act; (ii) on
the same day as the release thereof, facsimile copies of all press releases
issued by the Company or any of its subsidiaries and (iii) copies of any notices
and other information made available or given to the stockholders of the Company
generally, contemporaneously with the making available or giving thereof to the
stockholders.
f. Reservation of Shares. The Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance, no less than 150% of the number of shares of Common Stock needed to
provide for the issuance of the Conversion Shares.
g. Right of First Refusal. So long as at least an aggregate of
10% of the Preferred Shares issued at the Closings remain outstanding, but
subject to the exceptions described below, the Company shall not enter into a
binding agreement or otherwise agree with any party for any equity financing
(including any debt financing with an equity component) or issue any equity
securities of the Company or securities convertible or exchangeable into or for
equity securities of the Company (including debt securities with an equity
component) in any form ("FUTURE OFFERINGS") during the period beginning on the
Initial Closing Date and ending on and including the date which is 365 days
after the Initial Closing Date, unless it shall have first delivered to each
Buyer or a designee appointed by such Buyer written notice (the "FUTURE OFFERING
NOTICE") describing the proposed Future Offering, including the terms and
conditions thereof, and providing each Buyer an
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option to purchase up to its Aggregate Percentage (as defined below), as of the
date of delivery of the Future Offering Notice, in the Future Offering on the
same terms and conditions set forth in the Future Offering Notice (the
limitations referred to in this sentence are collectively referred to as the
"CAPITAL RAISING LIMITATION"). For purposes of this Section 4(g), "AGGREGATE
PERCENTAGE" at any time with respect to any Buyer shall mean the percentage
obtained by dividing (i) the aggregate number of Conversion Shares issued or
issuable, as if a conversion occurred on such date, upon conversion of the
Preferred Shares held by such Buyer (without giving effect to the limitations on
conversion contained herein or in the Certificate of Designations) by (ii) the
aggregate number of Conversion Shares issued or issuable, as if a conversion
occurred on such date, upon conversion of the Preferred Shares held by the
Buyers. A Buyer can exercise its option to participate in a Future Offering by
delivering written notice thereof to participate to the Company within ten (10)
business days of receipt of a Future Offering Notice, which notice shall state
the quantity of securities being offered in the Future Offering that such Buyer
will purchase, up to its Aggregate Percentage, and that number of securities it
is willing to purchase in excess of its Aggregate Percentage. In the event that
one or more Buyers fail to elect to purchase up to each such Buyer's Aggregate
Percentage then each Buyer which has indicated that it is willing to purchase a
number of securities in excess of its Aggregate Percentage shall be entitled to
purchase its pro rata portion (determined in the same manner as described in the
preceding sentence) of the securities in the Future Offering which one or more
Buyers have not elected to purchase. In the event the Buyers fail to elect to
fully participate in the Future Offering within the periods described in this
Section 4(g), the Company shall have 30 days thereafter to sell the securities
of the Future Offering respecting which such Buyer's rights were not exercised,
upon terms and conditions, no more favorable to the purchasers thereof than
specified in the Future Offering Notice. In the event the Company has not sold
such securities of the Future Offering within such 30 day period, the Company
shall not thereafter issue or sell such securities without first offering such
securities to the Buyers in the manner provided in this Section 4(g). The
Capital Raising Limitation shall not apply to (i) a loan from a commercial bank,
(ii) any transaction involving the Company's issuances of securities (A) as
consideration in a merger or consolidation, (B) in connection with any strategic
partnership or joint venture (the primary purpose of which is not to raise
equity capital), or (C) as consideration for the acquisition of a business,
product or license by the Company, (iii) the issuance of Common Stock in an
underwritten public offering, (iv) the issuance of securities upon exercise or
conversion of the Company's options, warrants or other convertible securities
outstanding as of the date hereof, (v) the grant of additional options or
warrants, or the issuance of additional securities, under any Company stock
option or restricted stock plan for the benefit of the Company's employees,
directors or consultants, (vi) the issuance by Abgenix, Inc., a wholly-owned
subsidiary of the Company, of any securities of Abgenix, Inc., or (vii) a single
issuance by the Company consisting solely of Common Stock provided that the
consideration received by the Company for each such share of Common Stock issued
is not less than the lesser of (A) the Closing Bid Price (as defined in the
Certificate of Designations) on the date of issuance of such shares and (B) the
average of the Closing Bid Prices for the Common Stock for the 20 consecutive
trading days immediately preceding the date of issuance of such shares. The
Buyers shall not be required to participate or exercise their right of first
refusal with respect to a particular Future Offering in order to exercise their
right of first refusal with respect to later Future Offerings.
h. Listing. The Company shall promptly secure the listing of all
of the Registrable Securities (as defined in the Registration Rights Agreement)
upon the Nasdaq National
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Market, The New York Stock Exchange, Inc. ("NYSE") or The American Stock
Exchange, Inc. ("AMEX"), upon which shares of Common Stock are then listed
(subject to official notice of issuance) and shall maintain, so long as any
other shares of Common Stock shall be so listed, such listing of all Registrable
Securities from time to time issuable under the terms of the Transaction
Documents. The Company shall maintain the Common Stock's authorization for
quotation on the Nasdaq National Market, NYSE or AMEX. Neither the Company nor
any of its subsidiaries shall take any action which may result in the delisting
or suspension of the Common Stock on the Nasdaq National Market, NYSE or AMEX.
The Company shall promptly provide to each Buyer copies of any notices it
receives from the Nasdaq National Market, NYSE or AMEX regarding the continued
eligibility of the Common Stock for listing on such automated quotation system
or securities exchange. The Company shall pay all fees and expenses in
connection with satisfying its obligations under this Section 4(h).
i. Expenses. Subject to Section 9(l) below, following the Initial
Closing, the Company shall reimburse the Buyers for the Buyers' reasonable
expenses (including attorneys fees and expenses) in connection with negotiating
and preparing the Transaction Documents and consummating the transactions
contemplated thereby up to an aggregate of $35,000.
j. Filing of Form 8-K. On or before the tenth (10th) day
following each of the Closing Dates, the Company shall file a Form 8-K with the
SEC describing the terms of the transaction contemplated by the Transaction
Documents and consummated at such Closing, in each case in the form required by
the 1934 Act.
k. Underwriting Lock-Up Agreements. At any time during the period
beginning on and including the Initial Closing Date and ending on the date which
is four years after the Initial Closing Date, the Company may require that all,
but not less than all, of the holders of the Preferred Shares agree to sign a
"lock-up" agreement with the underwriters of a public offering of the Common
Stock pursuant to which the holders would agree not to sell any Conversion
Shares issued to the holders pursuant to a Conversion Notice delivered to the
Company during the period beginning on the date designated by the Company, which
date shall be not less than 10 days after the holders' receipt of such notice,
and ending on the date which is the earlier of the closing date of such offering
and 60 days after the beginning of the lock-up period as designated by the
Company (the "UNDERWRITING LOCK-UP PERIOD"). The Company shall exercise this
right by delivering written notice (the "LOCK-UP REQUEST NOTICE") of such
request to all of the holders of the Preferred Shares then outstanding at least
10 days prior to the date on which the Underwriting Lock-Up Period will begin,
but in no event prior to the filing of the registration statement for such
proposed offering. The Lock-up Request Notice shall state (i) that the
underwriters of such offering have requested that the holders of the Preferred
Shares enter into "lock-up" agreements, (ii) the date on which the Underwriting
Lock-Up Period will begin and (iii) the name of the managing underwriters of the
proposed offering. Notwithstanding the foregoing, the Company shall not be
entitled to require the holders to enter into lock-up agreements unless (A) the
Underwriting Lock-Up Period is not more than 60 days, (B) the Underwriting
Lock-Up Period shall terminate immediately upon the termination or abandonment
or indefinite delay of the underwritten offering, (C) the managing underwriters
for such proposed offering are included on the Schedule of Underwriters attached
to this Agreement, (D) the preliminary prospectus for such underwritten public
offering reflects a price
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per share to the public of not less than $5.00 per share and an aggregate gross
proceeds to the Company of at least $15,000,000, (E) there has been no other
Underwriting Lock-Up Period in the 365 days prior to the date of the Lock-Up
Request Notice, and (F) there has been no Grace Period (as defined in the
Registration Rights Agreement) during the period beginning on and including the
date which is ten days prior to the filing of the registration statement for the
proposed offering and ending on and including the first day of the Underwriting
Lock-Up Period. In the event the Company requires an Underwriting Lock-Up
Period, the Mandatory Conversion Date (as defined in the Certificate of
Designations) shall be delayed two days for each day in the Underwriting Lock-Up
Period as provided in Section 2(g) of the Certificate of Designations. If the
Company delivers a Lock-Up Request Notice and the underwritten public offering
is not consummated within 90 days of the first day of the Underwriting Lock-Up
Period, then the Company may require an Underwriting Lock-Up Period pursuant to
this Section 4(k) on only one other occasion.
5. TRANSFER AGENT INSTRUCTIONS.
The Company shall issue irrevocable instructions to its transfer
agent, and any subsequent transfer agent, to issue certificates, registered in
the name of each Buyer or its respective nominee(s), for the Conversion Shares
in such amounts as specified from time to time by each Buyer to the Company upon
conversion of the Preferred Shares (the "IRREVOCABLE TRANSFER AGENT
INSTRUCTIONS"). Prior to registration of the Conversion Shares under the 1933
Act, all such certificates shall bear the restrictive legend specified in
Section 2(g) of this Agreement. The Company warrants that no instruction other
than the Irrevocable Transfer Agent Instructions referred to in this Section 5,
and stop transfer instructions to give effect to Section 2(f) hereof (in the
case of the Conversion Shares, prior to registration of the Conversion Shares
under the 0000 Xxx) will be given by the Company to its transfer agent and that
the Securities shall otherwise be freely transferable on the books and records
of the Company as and to the extent provided in this Agreement and the
Registration Rights Agreement. Nothing in this Section 5 shall affect in any way
each Buyer's obligations and agreements set forth in Section 2(g) to comply with
all applicable prospectus delivery requirements, if any, upon resale of the
Securities. If a Buyer provides the Company with an opinion of counsel,
reasonably satisfactory in form and substance to the Company, that registration
of a resale by such Buyer of any of such Securities is not required under the
1933 Act, the Company shall permit the transfer, and, in the case of the
Conversion Shares, promptly instruct its transfer agent to issue one or more
certificates in such name and in such denominations as specified by such Buyer
and without any restrictive legends. The Company acknowledges that a breach by
it of its obligations hereunder will cause irreparable harm to the Buyers by
vitiating the intent and purpose of the transaction contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Section 5 will be inadequate and agrees, in the event of
a breach or threatened breach by the Company of the provisions of this Section
5, that the Buyers shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach and requiring immediate
issuance and transfer, without the necessity of showing economic loss and
without any bond or other security being required.
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6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
a. Initial Closing Date. The obligation of the Company hereunder
to issue and sell the Initial Preferred Shares to each Buyer at the Initial
Closing is subject to the satisfaction, at or before the Initial Closing Date,
of each of the following conditions, provided that these conditions are for the
Company's sole benefit and may be waived by the Company at any time in its sole
discretion by providing each Buyer with prior written notice thereof:
(i) Such Buyer shall have executed each of the Transaction
Documents and delivered the same to the Company.
(ii) The Certificate of Designations shall have been filed with
the Secretary of State of the State of Delaware.
(iii) Such Buyer shall have delivered to the Company the Purchase
Price for the Preferred Shares being purchased by such Buyer at the
Initial Closing by wire transfer of immediately available funds pursuant
to the wire instructions provided by the Company.
(iv) The representations and warranties of such Buyer shall be
true and correct in all material respects as of the date when made and
as of the Initial Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date), and
such Buyer shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by
such Buyer at or prior to the Initial Closing Date.
b. Additional Closing Dates. The obligation of the Company
hereunder to issue and sell the Additional Preferred Shares to each Buyer at
each of the Additional Closings is subject to the satisfaction, at or before the
respective Additional Closing Date, of each of the following conditions,
provided that these conditions are for the Company's sole benefit and may be
waived by the Company at any time in its sole discretion by providing each Buyer
with prior written notice thereof:
(i) Such Buyer shall have complied with the requirements of
Section 1(c).
(ii) Such Buyer shall have delivered to the Company the Purchase
Price for the Additional Preferred Shares being purchased by such Buyer
at the Additional Closing by wire transfer of immediately available
funds pursuant to the wire instructions provided by the Company.
(iii) The representations and warranties of such Buyer shall be
true and correct in all material respects as of the date when made and
as of the Additional Closing Date as though made at that time (except
for representations and warranties that speak as of a specific date),
and such Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required
by the Transaction Documents to be
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performed, satisfied or complied with by such Buyer at or prior to the
Additional Closing Date.
c. Put Closing Date. The obligation of the Company hereunder to
issue and sell the Put Preferred Shares to each Buyer at the Put Closing is
subject to the satisfaction, at or before the Put Closing Date, of each of the
following conditions, provided that these conditions are for the Company's sole
benefit and may be waived by the Company at any time in its sole discretion by
providing each Buyer with prior written notice thereof:
(i) Such Buyer shall have delivered to the Company the Purchase
Price for the Put Preferred Shares being purchased by such Buyer at the
Put Closing by wire transfer of immediately available funds pursuant to
the wire instructions provided by the Company.
(ii) The representations and warranties of such Buyer shall be
true and correct in all material respects as of the date when made and
as of the Put Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date), and
such Buyer shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by
such Buyer at or prior to the Put Closing Date.
7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.
a. Initial Closing Date. The obligation of each Buyer hereunder
to purchase the Initial Preferred Shares at the Initial Closing is subject to
the satisfaction, at or before the Initial Closing Date, of each of the
following conditions, provided that these conditions are for each Buyer's sole
benefit and may be waived by such Buyer at any time in its sole discretion:
(i) The Company shall have executed each of the Transaction
Documents, and delivered the same to such Buyer.
(ii) The Certificate of Designations shall have been filed with
the Secretary of State of the State of Delaware, and a copy thereof
certified by such Secretary of State shall have been delivered to
counsel for such Buyer.
(iii) The Common Stock shall be authorized for quotation on the
Nasdaq National Market, NYSE or AMEX, trading in the Common Stock
issuable upon conversion of the Initial Preferred Shares to be traded on
the Nasdaq National Market, NYSE or AMEX shall not have been suspended
by the SEC, The Nasdaq Stock Market, Inc., NYSE or AMEX and all of the
Conversion Shares issuable upon conversion of the Initial Preferred
Shares to be sold at the Initial Closing shall be listed upon the Nasdaq
National Market, NYSE or AMEX.
(iv) The representations and warranties of the Company shall be
true and correct in all material respects (except to the extent that any
of such representations and warranties is already qualified as to
materiality in Section 3 above, in which case, such representations and
warranties shall be true and correct without further qualification) as
of the date when made
-23-
20
and as of the Initial Closing Date as though made at that time (except
for representations and warranties that speak as of a specific date) and
the Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the
Company at or prior to the Initial Closing Date. Such Buyer shall have
received a certificate, executed by the Chief Executive Officer of the
Company, dated as of the Initial Closing Date, to the foregoing effect
and as to such other matters as may be reasonably requested by such
Buyer including, without limitation, an update as of the Initial Closing
Date regarding the representation contained in Section 3(c) above.
(v) Such Buyer shall have received the opinion of the Company's
counsel dated as of the Initial Closing Date, in form, scope and
substance reasonably satisfactory to such Buyer and in substantially the
form of Exhibit C attached hereto.
(vi) The Company shall have executed and delivered to such Buyer
the Stock Certificates (in such denominations as such Buyer shall
request) for the Initial Preferred Shares being purchased by such Buyer
at the Initial Closing.
(vii) The Board of Directors of the Company shall have adopted
resolutions consistent with Section 3(b)(ii) above and in a form
reasonably acceptable to such Buyer (the "RESOLUTIONS").
(viii) As of the Initial Closing Date, the Company shall have
reserved out of its authorized and unissued Common Stock, solely for the
purpose of effecting the conversion of the Preferred Shares, at least
5,624,000 shares of Common Stock.
(ix) The Irrevocable Transfer Agent Instructions, in the form of
Exhibit D attached hereto, shall have been delivered to and acknowledged
in writing by the Company's transfer agent.
(x) The Company shall have delivered to such Buyer a certificate
evidencing the incorporation and good standing of the Company and each
subsidiary in such corporation's state of incorporation issued by the
Secretary of State of such state of incorporation as of a date within 10
days of the Initial Closing.
(xi) The Company shall have delivered to such Buyer a secretary's
certificate certifying as to (a) the resolutions, (b) the Certificate of
Incorporation and (c) Bylaws, each as in effect at the Initial Closing.
(xii) The Company shall have delivered to such Buyer such other
documents relating to the transactions contemplated by the Transaction
Documents as such Buyer or its counsel may reasonably request.
b. Additional Closing Dates. The obligation of each Buyer
hereunder to purchase the Additional Preferred Shares at each of the Additional
Closings is subject to the
-24-
21
satisfaction, at or before the Additional Closing Dates, of each of the
following conditions, provided that these conditions are for each Buyer's sole
benefit and may be waived by such Buyer at any time in its sole discretion:
(i) The Certificate of Designations shall be in full force and
effect and shall not have been amended since the Initial Closing Date,
and a copy thereof certified by the Secretary of State of the State of
Delaware shall have been delivered to such Buyer.
(ii) The Common Stock shall be authorized for quotation on the
Nasdaq National Market, NYSE or AMEX, trading in the Common Stock
issuable upon conversion of the Additional Preferred Shares to be traded
on the Nasdaq National Market, NYSE or AMEX shall not have been
suspended by the SEC, The Nasdaq Stock Market, Inc., NYSE or AMEX and
all of the Conversion Shares issuable upon conversion of the Additional
Preferred Shares to be sold at such Additional Closing shall be listed
upon the Nasdaq National Market, NYSE or AMEX.
(iii) The representations and warranties of the Company shall be
true and correct in all material respects (except to the extent that any
of such representations and warranties is already qualified as to
materiality in Section 3 above, in which case, such representations and
warranties shall be true and correct without further qualification) as
of the date when made and as of the respective Additional Closing Date
as though made at that time (except for representations and warranties
that speak as of a specific date) and the Company shall have performed,
satisfied and complied in all material respects with the covenants,
agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the
respective Additional Closing Date. Such Buyer shall have received a
certificate, executed by the Chief Executive Officer of the Company,
dated as of such Additional Closing Date, to the foregoing effect and as
to such other matters as may be reasonably requested by such Buyer
including, without limitation, an update as of such Additional Closing
Date regarding the representation contained in Section 3(c) above.
(iv) Such Buyer shall have received the opinion of the Company's
counsel dated as of such Additional Closing Date, in form, scope and
substance reasonably satisfactory to such Buyer and in substantially the
form of Exhibit C attached hereto.
(v) The Company shall have executed and delivered to such Buyer
the Stock Certificates (in such denominations as such Buyer shall
request) for the Additional Preferred Shares being purchased by such
Buyer at such Additional Closing.
(vi) The Board of Directors of the Company shall have adopted,
and shall not have amended, the Resolutions in a form reasonably
acceptable to such Buyer.
(vii) As of such Additional Closing Date, the Company shall have
reserved out of its authorized and unissued Common Stock, solely for the
purpose of effecting the conversion of the Preferred Shares, a number of
shares of Common Stock equal to at least 150% of the number of shares of
Common Stock which would be issuable upon conversion
-25-
22
in full of the then outstanding Preferred Shares, including for such
purposes any Preferred Shares to be issued at such Additional Closing.
(viii) The Irrevocable Transfer Agent Instructions, in the form
of Exhibit D attached hereto, shall have been delivered to and
acknowledged in writing by the Company's transfer agent.
(ix) The Company shall have delivered to such Buyer a certificate
evidencing the incorporation and good standing of the Company and each
subsidiary in such corporation's state of incorporation issued by the
Secretary of State of such state of incorporation as of a date within 10
days of such Additional Closing.
(x) The Company shall have delivered to such Buyer a secretary's
certificate certifying as to (a) the resolutions, (b) the Certificate of
Incorporation and (c) Bylaws, each as in effect at the Additional
Closing.
(xi) During the period beginning on the Additional Share Notice
Date and ending on and including the Additional Closing Date, the
Company shall have delivered Conversion Shares upon conversion of the
Preferred Shares on a timely basis as set forth in Section 2(f)(ii) of
the Certificate of Designations.
(xii) The Company shall have delivered to such Buyer such other
documents relating to the transactions contemplated by this Agreement as
such Buyer or its counsel may reasonably request.
c. Put Closing Date. The obligation of each Buyer hereunder to
purchase the Put Preferred Shares at the Put Closing is subject to the
satisfaction, at or before the Put Closing Date, of each of the following
conditions, provided that these conditions are for each Buyer's sole benefit and
may be waived by such Buyer at any time in its sole discretion:
(i) The Company shall have complied with the requirements of
Section 1(d) and all of the Put Notice Conditions set forth in Section
1(e) shall have been satisfied.
(ii) The Certificate of Designations shall be in full force and
effect and shall not have been amended since the Put Closing Date, and a
copy thereof certified by the Secretary of State of the State of
Delaware shall have been delivered to such Buyer.
(iii) The Common Stock shall be authorized for quotation on the
Nasdaq National Market, NYSE or AMEX, trading in the Common Stock
issuable upon conversion of the Put Preferred Shares to be traded on the
Nasdaq National Market, NYSE or AMEX shall not have been suspended by
the SEC, The Nasdaq Stock Market, Inc., NYSE or AMEX and all of the
Conversion Shares issuable upon conversion of the Put Preferred Shares
to be sold at the Put Closing shall be listed upon the Nasdaq National
Market, NYSE or AMEX.
-26-
23
(iv) The representations and warranties of the Company shall be
true and correct in all material respects (except to the extent that any
of such representations and warranties is already qualified as to
materiality in Section 3 above, in which case, such representations and
warranties shall be true and correct without further qualification) as
of the date when made and as of the Put Closing Date as though made at
that time (except for representations and warranties that speak as of a
specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and
conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Put Closing
Date. Such Buyer shall have received a certificate, executed by the
Chief Executive Officer of the Company, dated as of the Put Closing
Date, to the foregoing effect and as to such other matters as may be
reasonably requested by such Buyer including, without limitation, an
update as of the Put Closing Date regarding the representation contained
in Section 3(c) above.
(v) Such Buyer shall have received the opinion of the Company's
counsel dated as of the Put Closing Date, in form, scope and substance
reasonably satisfactory to such Buyer and in substantially the form of
Exhibit C attached hereto.
(vi) The Company shall have executed and delivered to such Buyer
the Stock Certificates (in such denominations as such Buyer shall
request) for the Put Preferred Shares being purchased by such Buyer at
the Put Closing.
(vii) The Board of Directors of the Company shall have adopted,
and shall not have amended, the Resolutions in a form reasonably
acceptable to such Buyer.
(viii) As of the Put Closing Date, the Company shall have
reserved out of its authorized and unissued Common Stock, solely for the
purpose of effecting the conversion of the Preferred Share, a number of
shares of Common Stock equal to at least 150% of the number of shares of
Common Stock which would be issuable upon conversion of the then
outstanding Preferred Shares, including for such purposes any Preferred
Shares to be issued at such Put Closing.
(ix) The Irrevocable Transfer Agent Instructions, in the form of
Exhibit D attached hereto, shall have been delivered to and acknowledged
in writing by the Company's transfer agent.
(x) The Company shall have delivered to such Buyer a certificate
evidencing the incorporation and good standing of the Company and each
subsidiary in such corporation's state of incorporation issued by the
Secretary of State of such state of incorporation as of a date within 10
days of the Put Closing.
(xi) The Company shall have delivered to such Buyer a secretary's
certificate certifying as to (a) the resolutions, (b) the Certificate of
Incorporation and (c) Bylaws, each as in effect at the Put Closing.
-27-
24
(xii) The Company shall have delivered to such Buyer such other
documents relating to the transactions contemplated by this Agreement as
such Buyer or its counsel may reasonably request.
8. INDEMNIFICATION. In consideration of each Buyer's execution and
delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company's other obligations under the Transaction
Documents, the Company shall defend, protect, indemnify and hold harmless each
Buyer and each other holder of the Securities and all of their officers,
directors, employees and agents (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement)
(collectively, the "INDEMNITEES") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements (the
"INDEMNIFIED LIABILITIES"), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents, the
Certificate of Designations or any other certificate, instrument or document
contemplated hereby or thereby, (b) any breach of any covenant, agreement or
obligation of the Company contained in the Transaction Documents, the
Certificate of Designations or any other certificate, instrument or document
contemplated hereby or thereby, or (c) any cause of action, suit or claim
brought or made against such Indemnitee and arising out of or resulting from the
execution, delivery, performance or enforcement of this Agreement or any other
instrument, document or agreement executed pursuant hereto by any of the
Indemnitees, any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of the issuance of the Securities or
the status of such Buyer or holder of the Securities as an investor in the
Company. To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
9. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York without regard
to the principles of conflict of laws. Each party hereby irrevocably submits to
the non-exclusive jurisdiction of the state and federal courts sitting the City
of New York, borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability
-28-
25
shall not affect the validity or enforceability of the remainder of this
Agreement in that jurisdiction or the validity or enforceability of any
provision of this Agreement in any other jurisdiction.
b. Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. In the event any signature page is
delivered by facsimile transmission, the party using such means of delivery
shall cause four (4) additional original executed signature pages to be
physically delivered to the other party within five (5) days of the execution
and delivery hereof.
c. Headings. The headings of this Agreement are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Agreement.
d. Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
e. Entire Agreement; Amendments. This Agreement supersedes all
other prior oral or written agreements between the Buyers, the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the holders of at least two-thirds (2/3) of the Preferred Shares
then outstanding, and no provision hereof may be waived other than by an
instrument in writing signed by the party against whom enforcement is sought. No
such amendment shall be effective to the extent that it applies to less than all
of the holders of the Preferred Shares then outstanding.
f. Notices. Any notices consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically generated and kept on file by the
sending party); (iii) three (3) days after being sent by U.S. certified mail,
return receipt requested, or (iv) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:
-29-
26
If to the Company:
Cell Genesys, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Chief Financial Officer
With a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
If to the Transfer Agent:
Boston Equiserve
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxx Xxxxxx, Mail Stop 450262
If to a Buyer, to its address and facsimile number on the Schedule of
Buyers, with copies to such Buyer's representatives as set forth on the Schedule
of Buyers.
Each party shall provide five (5) days' prior written notice to the
other party of any change in address or facsimile number.
g. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Preferred Shares. The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the holders of two-thirds (2/3) of the Preferred Shares then
outstanding including by merger or consolidation, except pursuant to a Major
Transaction (as defined in Section 3(c) of the Certificate of Designations) in
compliance with Section 3 of the Certificate of Designations. A Buyer may assign
some or all of its rights hereunder to affiliates or associates of such Buyer,
without the consent of the Company, and to others, with the consent of the
Company; provided, however, that any such assignment shall not release such
Buyer from its obligations hereunder unless such obligations are assumed by such
assignee and the Company has consented to such assignment and assumption.
-30-
27
h. No Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
i. Survival. Unless this Agreement is terminated under Section
9(l), the representations and warranties of the Company and the Buyers contained
in Sections 2 and 3, the agreements and covenants set forth in Sections 4, 5 and
9, and the indemnification provisions set forth in Section 8, shall survive each
of the Closings. Each Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.
j. Publicity. The Company and one representative selected by the
Buyers shall have the right to approve before issuance any press releases or any
other public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior
approval of any Buyer, to make any press release or other public disclosure with
respect to such transactions as is required by applicable law and regulations
(although each Buyer shall be consulted by the Company in connection with any
such press release or other public disclosure prior to its release and shall be
provided with a copy thereof).
k. Further Assurances. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
l. Termination. In the event that the Initial Closing shall not
have occurred with respect to a Buyer on or before three (3) business days from
the date hereof due to the Company's or such Buyer's failure to satisfy the
conditions set forth in Sections 6 and 7 above (and the nonbreaching party's
failure to waive such unsatisfied condition(s)), the nonbreaching party shall
have the option to terminate this Agreement with respect to such breaching party
at the close of business on such date without liability of any party to any
other party; provided, however, that if this Agreement is terminated pursuant to
this Section 9(l), the Company shall remain obligated to reimburse the
non-breaching Buyers for the expenses described in Section 4(i) above.
m. Placement Agent. Each of the Company and the Buyers, on their
own behalf, acknowledges that it has not engaged a placement agent in connection
with the sale of the Preferred Shares.
n. No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
-31-
28
IN WITNESS WHEREOF, the Buyers and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first written
above.
COMPANY: BUYERS:
CELL GENESYS, INC. XXXXXX PARTNERS
By: /s/ XXXXXXXX XXXXXX XXXXX By: /s/ XXXXX XXXXXXXX
---------------------------- --------------------------
Name: Xxxxxxxx Xxxxxx Xxxxx Name: Xxxx Xxxxx
--------------------------
Its: Senior V.P. and C.F.O. Its: Officer
--------------------------
OLYMPUS SECURITIES, LTD.
By: /s/ XXXXX XXXXXXXX
----------------------------------------
Name: Xxxx Xxxxx
Its: Alternate Director
THEMIS PARTNERS L.P.
By: Promethean Investment Group L.L.C.
Its: General Partner
By: /s/ XXXXX X. X'XXXXX, XX.
----------------------------------------
Name: Xxxxx X. X'Xxxxx, Xx.
Its: President
HERACLES FUND
By: Promethean Investment Group L.L.C.
Its: Investment Advisor
By: /s/ XXXXX X. X'XXXXX, XX.
----------------------------------------
Name: Xxxxx X. X'Xxxxx, Xx.
Its: President
29
XXXXXXXX, L.P.
By: Xxxxxx, Xxxxxx & Co., L.P.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Chief Operating Officer
GAM ARBITRAGE INVESTMENTS, INC.
By: Xxxxxx, Xxxxxx & Co., L.P.
Its: Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Chief Operating Officer
AG SUPER FUND INTERNATIONAL
PARTNERS, L.P.
By: Xxxxxx, Xxxxxx & Co., L.P.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Chief Operating Officer
RAPHAEL, L.P.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Chief Operating Officer
30
RAMIUS FUND, LTD.
By: AG Ramius Partners, L.L.C.
Its: Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Managing Officer
HALIFAX FUND, L.P.
By: The Palladin Group
Its: Investment Manager
By: Palladin Capital Management LLC
Its: General Partner
By: /s/ Xxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxx
Its: Authorized Representative
COLONIAL PENN LIFE INSURANCE
COMPANY
By: The Palladin Group
Its: Investment Manager
By: Palladin Capital Management LLC
Its: General Partner
By: /s/ Xxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxx
Its: Authorized Representative
31
SCHEDULE OF BUYERS
NUMBER OF
INITIAL
INVESTOR ADDRESS PREFERRED INVESTOR'S REPRESENTATIVES' ADDRESS
INVESTOR NAME AND FACSIMILE NUMBER SHARES AND FACSIMILE NUMBER
------------------- ------------------------------ --------- ------------------------------------
Xxxxxx Partners c/o Leeds Management Services 247 Citadel Investment Group, L.L.C.
000 Xxxxx Xxxxxx, 0xx Xxxxx 000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxx XX00 Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxx Attention: Xxxxxxxx Xxxxx
Facsimile: (000) 000-0000 Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Olympus Securities, c/o Leeds Management Services 303 Citadel Investment Group, L.L.C.
Ltd. 000 Xxxxx Xxxxxx, 0xx Xxxxx 000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxx XX00 Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxx Attention: Xxxxxxxx Xxxxx
Facsimile: (000) 000-0000 Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Themis Partners L.P. c/o Promethean Investment Group,
L.L.C 175 Promethean Investment Group, L.L.C.
00 Xxxx 00xx Xxxxxx, Xxxxx 0000 00 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 10019 Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. X'Xxxxx, Xx. Attn: Xxxxx X. X'Xxxxx, Xx.
Facsimile: 000-000-0000 Xxxxxx Xxxxxxx
Facsimile: 000-000-0000
Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: 312-902-1061
Heracles Fund Bank of Bermuda (Cayman) Limited 175 Promethean Investment Group, L.L.C.
X.X. Xxx 000 40 West 57th Street, Suite 1520
3rd Floor British Xxxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
Xx. Xxx'x Drive Attn: Xxxxx X. X'Xxxxx, Xx.
Georgetown, Grand Cayman Xxxxxx Xxxxxxx
Cayman Island, BWI Facsimile: 000-000-0000
Attn: Xxxxx X. Xxxxxxxx
Facsimile: 000-000-0000 Xxxxxx Xxxxxx & Zavis
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: 312-902-1061
Xxxxxxxx, L.P. c/o Xxxxxx, Xxxxxx & Co., L.P. 365 Xxxxxx, Xxxxxx & Co., L.P.
000 Xxxx Xxxxxx - 26th Floor 000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxx Attn: Xxxx Xxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
32
NUMBER OF
INITIAL
INVESTOR ADDRESS PREFERRED INVESTOR'S REPRESENTATIVES' ADDRESS
INVESTOR NAME AND FACSIMILE NUMBER SHARES AND FACSIMILE NUMBER
-------------------- ------------------------------ --------- --------------------------------------
GAM Arbitrage c/o Xxxxxx, Xxxxxx & Co., L.P. 25 Xxxxxx, Xxxxxx & Co., L.P.
Investments, Inc. 000 Xxxx Xxxxxx - 26th Floor 000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxx Attn: Xxxx Xxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
AG Super Fund c/o Xxxxxx, Xxxxxx & Co., L.P. 25
International 000 Xxxx Xxxxxx - 26th Floor
Partners, L.P. Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxx
Facsimile: 000-000-0000
Raphael, L.P. c/o Xxxxxx, Xxxxxx & Co., X.X. 00 Xxxxxx, Xxxxxx & Co., L.P.
000 Xxxx Xxxxxx - 26th Floor 000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxx Attn: Xxxx Xxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
Ramius Fund, Ltd. c/o Xxxxxx, Xxxxxx & Co., X.X. 00 Xxxxxx, Xxxxxx & Co., L.P.
000 Xxxx Xxxxxx - 26th Floor 000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxx Attn: Xxxx Xxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
Halifax Fund, L.P. c/o CITCO Fund Services, Ltd. 500 The Palladin Group
Corporate Center, Xxxx Xxx Xxxx 00 Xxxx 00xx Xxxxxx
P.O. Box 31106 Suite 1500
SMB New York, New York 10019
Grand Cayman, Cayman Islands Attn: Xxxxxx Xxxxxx
Attn: Xxxxxxx Xxxxxxx Facsimile: 000-000-0000
Facsimile: (000) 000-0000
Colonial Penn Life c/o The Palladin Group 50 The Palladin Group
Insurance Company 00 Xxxx 00xx Xxxxxx 40 West 57th Street
Suite 1520 Suite 1500
New York, New York 10019 Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx Attn: Xxxxxx Xxxxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
33
SCHEDULE OF UNDERWRITERS
ABN AMRO
X.X. Xxxxxxx & Sons Inc.
Bancamerica Xxxxxxxxx
XX Xxxx Xxxxx
Xxxxx & Co.
Cruttendon Xxxx Incorporated
CS First Boston
Xxxx Xxxxxxxx Incorporated
Xxxx Xxxxxx
Deutsche Xxxxxx Xxxxxxxx
Xxxxxxxxx Xxxxxx & Xxxxxxxx
Xxxxxxxxxx & Co. Inc.
Xxxxxx Xxxx Incorporated
Genesis Merchant Securities
Xxxxxxx Xxxxx & Co.
Xxxxxxxxx & Xxxxx
Invermed Associates
Xxxxxxxx & Company, Inc.
X.X. Xxxxxx & Company
Xxxxxx Brothers
Xxxxxxx Xxxxx
Xxxxxxxxxx Securities
Xxxxxx Xxxxxxx Co., Inc.
Xxxxxxx & Company, Inc.
Xxxxxxxxxxx & Co.
Pacific Growth Equities Inc.
Xxxxx Xxxxxx
Xxxxx Jaffray Inc.
Prudential Bache Securities
Punk Xxxxxx & Xxxxx
Xxxxxxx Xxxxx & Associates, Inc.
Salomon Brothers
SBC Warburg/Xxxxxx Read
Xxxxx Xxxxxx
SoundView Financial Group, Inc.
Sutro & Co. Incorporated
UBS Securities, Inc.
Unterberg Harris
Vector Securities
Xxxxx, Xxxxx & Company
Wedbush Xxxxxx Securities
34
SCHEDULES
SCHEDULE 3(a) ORGANIZATION AND QUALIFICATION
Cell Genesys, Inc.
Abgenix, Inc.
Somatix Therapy Corporation
SCHEDULE 3(c) CAPITALIZATION
CELL GENESYS, INC.
Included in outstanding shares are 2 million shares owned by Hoechst Xxxxxx
Xxxxxxx; under the October 1995 collaboration agreement, registration rights are
triggered for these shares and the 750,000 share warrant at the earlier of
signing two additional collaboration agreements, or October 2000, and upon the
filing of an S1, S2 or S3 registration statement.
GenPharm Convertible Note $15,000,000
-Convertible at $9.00 per share
-Reset provision after 2/28/98 at 115% of average closing price
30 days preceding
-Registration rights (including piggyback rights)
-Notice requirement under piggyback rights
WARRANTS OUTSTANDING: WARRANTS STRIKE PRICE
--------------------- -------- ------------
Hoechst Xxxxxx Xxxxxxx 750,000 13.00
Xxxx Xxxxx Special Investment Trust, Inc. 58,587 10.39
Westcoast & Co. 146,608 10.39
Xxxxxx X. Xxxxxxxx 1,466 10.39
Quasar International Partners, C.V. 11,642 10.39
Oracle Institutional Partners, L.P. 3,018 10.39
Oracle Partners, L.P. 75,460 10.39
Xxx Oracle Fund, Inc. 19,766 10.39
Xxxxx X. Xxxxxxxx 5,975 10.39
Xxxxxx X. Xxxxx 5,390 10.39
Aeneas Venture Corporation 80,850 10.39
Phoenix Partners, L.P. 27,489 10.39
Betje Partners, L.P. 8,624 10.39
Morgens, Waterfall, Vintidiadis Investments 17,787 10.39
Xxxxxxxx & Co. 13,475 10.39
SBSF Biotechnology Fund, L.P. 40,425 10.39
Warburg Pincus Emerging Growth Fund 80,850 10.39
WHI Somatix Partners 26,950 10.39
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Inc. 5,792 3.01
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Inc. 2,234 5.04
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Inc. 10,095 3.01
35
SCHEDULE 3(c) CAPITALIZATION CONTINUED
WARRANTS OUTSTANDING: WARRANTS STRIKE PRICE
--------------------- -------- ------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Inc. 2,234 5.04
Xxxx Xxxxx 5,879 3.01
Xxxx Xxxxx 2,266 5.04
Xxxx Xxxxx 2,008 3.01
Xxxxxx Xxxxxxxxx 10,241 3.01
Xxxxxx Xxxxxxxxx 2,266 5.04
Xxxxxx Xxxxxxxxx 2,008 3.01
Xxxxxx Xxxxxx 6,620 0.03
Xxxxx Xxxxx 16,550 0.03
TBD Ltd. 33,101 0.03
Aberlyn Capital Management Limited Partnership 4,812 18.18
Financing For Science International 7,434 18.33
All warrants have registration rights. Excluding the Hoechst Xxxxxx Xxxxxxx
warrant, the warrants are subject to certain registration rights pursuant to the
Somatix acquisition. The company plans to register the shares pursuant to these
warrants under the S3 registration statement to be filed for the convertible
preferred financing.
ABGENIX, INC.
Warrants $6.00 per share 121,667 shares of Series A Preferred Stock
Held by Cell Genesys, Inc.
$4 million convertible promissory note convertible at $6.00 per share
Convertible at earlier 180 days after Abgenix IPO, July 14, 1999, or 20 business
days after
Cell Genesys receives Abgenix notice to exercise prepayment option
Due July 14, 2000
Held by Cell Genesys, Inc.
$5 million convertible line of credit convertible at $6.00 per share
Due at earlier of Abgenix IPO or June 30, 1998
Held by Cell Genesys, Inc.
Potential $4.5 million convertible note
Convertible at Abgenix option, post IPO, at IPO price or fair market value
Guaranteed by Cell Genesys until IPO
Held by potential corporate partner
Potential private and public equity financings by Abgenix, Inc.
Potential redemption obligation under potential terms of private equity
financings by Abgenix, Inc.
36
SCHEDULE 3(e) NO CONFLICTS
None
SCHEDULE 3(g) ABSENCE OF CERTAIN CHANGES
GenPharm Cross-License and Settlement Agreement March 27, 1997
Acquisition of Somatix Therapy Corporation May 30, 1997
SCHEDULE 3(h) ABSENCE OF LITIGATION
The Company is a party to three ongoing U.S. Patent Office interference
proceedings:
- Gene activation technology - This is a two-way interference
involving Cell Genesys and Ares Serono. The Company's expenses
in this interference are partly reimbursed by Hoechst Xxxxxx
Xxxxxxx, a licensee to certain applications of Cell Genesys
technology in this area.
- Ex vivo gene therapy - This is a three-way interference
involving Cell Genesys, Novartis and a third party. The
Company's involvement in this interference is as a result of the
acquisition of Somatix Therapy Corporation.
- Chimeric receptor technology - This is currently a two-way
interference involving Cell Genesys and the Weizmann Institute
of Science (Rehovot, Israel). Previously, Cell
Genesys, Massachusetts General Hospital and Hoechst Xxxxxx
Xxxxxxx cross-licensed certain issued and pending patent claims
involving chimeric receptor technology.
Given the size and breadth of its intellectual property portfolio in gene
therapy, the Company anticipates that it may be a party to other interference
proceedings in the future.
SCHEDULE 3(j) NO UNDISCLOSED EVENT, LIABILITIES, DEVELOPMENTS OR CIRCUMSTANCES
Under the collaborative agreement with Hoechst Xxxxxx Xxxxxxx dated October
0000, Xxxxxxx Xxxxxx Xxxxxxx has the ability to terminate its commitment at any
time two years after its anniversary date; under termination, Cell Genesys is
entitled to certain wind down payments Cell Genesys' Officer Change In Control
Agreements approved by Board of Directors 10/8/97 Potential private and public
equity financings by Abgenix, Inc.
SCHEDULE 3(n) INTELLECTUAL PROPERTY RIGHTS
The Company is a party to three ongoing U.S. Patent Office interference
proceedings:
- Gene activation technology - This is a two-way interference
involving Cell Genesys and Ares Serono. The Company's expenses
in this interference are partly reimbursed by Hoechst Xxxxxx
Xxxxxxx, a licensee to certain applications of Cell Genesys
technology in this area.
- Ex vivo gene therapy - This is a three-way interference
involving Cell Genesys, Novartis and a third party. The
Company's involvement in this interference is as a result of the
acquisition of Somatix Therapy Corporation.
- Chimeric receptor technology - This is currently a two-way
interference involving Cell Genesys and the Weizmann Institute
of Science (Rehovot, Israel). Previously, Cell
37
Genesys, Massachusetts General Hospital and Hoechst Xxxxxx
Xxxxxxx cross-licensed certain issued and pending patent claims
involving chimeric receptor technology.
Given the size and breadth of its intellectual property portfolio in gene
therapy, the Company anticipates that it may be a party to other interference
proceedings in the future.
SCHEDULE 3(p) TITLE
Cell Genesys equipment leasehold leaselines
Abgenix equipment/leasehold leaselines
Cell Genesys Silicon Valley Bank loan for leasehold improvements
Abgenix Silicon Valley Bank loan for leasehold improvements
SCHEDULE 3(u) TAX STATUS
None
SCHEDULE 4(d) USE OF PROCEEDS
The net proceeds to the Company from the sale of the Preferred Stock offered
hereby are estimated to be approximately $20 million and will be expended for
the purposes of research, clinical trials and manufacturing, technology
licensing and acquisitions, retirement of debt, redemption of the Company's and
subsidiary's securities and general corporate purposes.
