1
Exhibit 99.1
FORM OF SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of January
__, 1996 by and among NEORX CORPORATION, a Washington corporation, with
headquarters located 000 Xxxx Xxxxxxxx, Xxxxxxx, XX 00000-0000 (the "COMPANY"),
and the undersigned (the "BUYER").
WHEREAS:
A. The Company and the Buyer are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Rule 506 under 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 Buyer wishes to purchase, in the amounts and upon the
terms and conditions stated in this Agreement, (i) shares of the Company's
common stock, par value $.02 per share (the "COMMON STOCK"), and (ii) shares of
the Company's preferred stock, $.02 par value per share (the "PREFERRED
STOCK"); and
C. Contemporaneous with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement (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;
NOW THEREFORE, the Company and the Buyer hereby agrees as follows:
1. PURCHASE AND SALE OF COMMON STOCK AND PREFERRED STOCK.
a. Purchase of Common Stock. The Company shall issue and sell to
the Buyer and the Buyer shall purchase 47,559 shares of Common Stock (the
"COMMON SHARES") at a per share purchase price of $6.308.
b. Purchase of Preferred Stock. The Company shall issue and sell
to the Buyer and the Buyer shall purchase 6,000 shares of Series 2 Convertible
Preferred Stock (the "PREFERRED SHARES"), in accordance with the terms of the
Articles of Amendment, attached hereto as EXHIBIT A (the "ARTICLES OF
AMENDMENT"), at a per
2
share purchase price for the Preferred Shares of One Hundred Dollars ($100.00).
The Common Shares and the Preferred Shares are hereafter collectively referred
to as the "SECURITIES")
c. Form of Payment. The Buyer shall pay the purchase price for
the Common Shares and the Preferred Shares (the "PURCHASE PRICE") by wire
transfer of United States Dollars to the Company.
On the Closing Date (as defined below), the Company shall deliver to
First Interstate Bank of Washington, N.A., as transfer agent and registrar for
the Company, irrevocable instructions to promptly deliver stock certificates,
duly executed on behalf of the Company, representing the Common Shares and the
Preferred Shares (the "STOCK CERTIFICATES") to the Buyer.
e. Closing Date. The date and time of the issuance and sale of
the Common Shares and the Preferred Shares (the "CLOSING DATE") shall be 12:00
noon Eastern Standard Time on January 30, 1996.
2. BUYER'S REPRESENTATIONS AND WARRANTIES
The Buyer represents and warrants to the Company that:
a. Investment Purpose. The Buyer is purchasing the Securities
for its own account for investment only and not with a view towards the public
sale or distribution thereof except pursuant to sales registered under the 0000
Xxx.
b. Accredited Investor Status. The Buyer is an "accredited
investor" as that term is defined in Rule 501(a)(3) of Regulation D.
c. Reliance on Exemptions. The 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 upon the truth and accuracy of,
and the Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Securities.
d. Information. The 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 the Buyer. The Buyer and its advisors, if any,
have been afforded the opportunity to ask questions of the Company and have
received complete and satisfactory answers
-2-
3
to any such inquiries. The Buyer understands that its investment in the
Securities involves a high degree of risk.
e. Governmental Review. The 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.
f. Transfer or Resale. The Buyer understands that (i) except as
provided in the Registration Rights Agreement, the Common Shares, the Preferred
Shares, and the shares of Common Stock that would be issuable to the Buyer upon
conversion of the Preferred Shares (the "CONVERSION SHARES"), and the shares of
Common Stock that may be issued to the Buyer pursuant to Section 1 of the
Articles of Amendment (the "DIVIDEND SHARES"), have not been and are not being
registered under the 1933 Act or any state securities laws, and may not be
transferred unless (a) subsequently registered thereunder, or (b) the Buyer
shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect that
the securities to be sold or transferred may be sold or transferred pursuant to
an exemption from such registration; (ii) any sale of such securities made in
reliance on Rule 144 promulgated under the 1933 Act may be made only in
accordance with the terms of said Rule and further, if said Rule is not
applicable, any resale of such 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 (other than pursuant to the
Registration Rights Agreement) under the 1933 Act or any state securities laws
or to comply with the terms and conditions of any exemption thereunder.
g. Legends. The Buyer understands that the Preferred Shares and,
until such time as the Common Shares, the Conversion Shares and the Dividend
Shares (collectively, the "REGISTRABLE SECURITIES") have been registered under
the 1933 Act as contemplated by the Registration Rights Agreement, the stock
certificates for the Registrable Securities may 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. The
securities have been acquired for investment and may not be
sold, transferred or assigned in the absence of an effective
registration statement for the securities under said Act, or
an opinion of
-3-
4
counsel, reasonably satisfactory in form, scope and substance
to the Company, that registration is not required under said
Act.
h. Authorization; Enforcement. This Agreement has been duly and
validly authorized, executed and delivered on behalf of the Buyer and is a
valid and binding agreement of the Buyer enforceable in accordance with its
terms, subject as to enforceability to general principles of equity and to
bankruptcy, insolvency, moratorium, and other similar laws affecting the
enforcement of creditors' rights generally.
i. Residency. The Buyer is a resident of that state or country
specified in its address on the signature page hereof.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Buyer that:
a. Organization and Qualification. The Company is a corporation
duly organized and existing in good standing under the laws of the jurisdiction
in which it is incorporated, and has the requisite corporate power to own its
properties and to carry on its business as now being conducted. The Company
has no subsidiaries. The Company 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 and where
the failure so to qualify would have a Material Adverse Effect. "MATERIAL
ADVERSE EFFECT" means any material adverse effect on the operations, properties
or financial condition of the Company.
b. Authorization; Enforcement. (i) The Company has the requisite
corporate power and authority to enter into and perform this Agreement and the
Registration Rights Agreement, and to issue the Registrable Securities and the
Preferred Shares in accordance with the terms hereof and thereof, (ii) the
execution and delivery of this Agreement by the Company and the consummation by
it of the transactions contemplated hereby have been duly authorized by the
Company's Board of Directors and no further consent or authorization of the
Company, its Board or Directors, or its stockholders is required, (iii) this
Agreement has been duly executed and delivered by the Company, and (iv) this
Agreement constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally,
the enforcement of creditors' rights and remedies or by other equitable
principles of general application.
-4-
5
c. Capitalization. As of January 30, 1996, the authorized
capital stock of the Company consists of (i) 60,000,000 shares of Common Stock
of which 14,963,176 shares were issued and outstanding, and (ii) 3,000,000
shares of Preferred Stock of which 1,120,000 shares have been designated as
$2.4375 Convertible Exchangeable Preferred Stock, Series 1, of which 208,240
were issued and outstanding, and 50,000 shares have been designated as Series 2
Convertible Preferred Stock, of which 40,000 are issued and outstanding and
6,000 will be issued and outstanding under this Agreement. All of such
outstanding shares have been validly issued and are fully paid and
nonassessable. No shares of Common Stock or Preferred Stock are subject to
preemptive rights or any other similar rights of the stockholders of the
Company or any liens or encumbrances. Except as disclosed in SCHEDULE 2(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 arrangements by which the Company is or may
become bound to issue additional shares of capital stock of the Company, and
(ii) there are no agreements or arrangements under which the Company is
obligated to register the sale of any of its securities under the 1933 Act
(except the Registration Rights Agreement). The Company has furnished to the
Buyer true and correct copies of the Company's Articles of Incorporation, as
amended, as in effect on the date hereof ("ARTICLES OF INCORPORATION") and the
Company's Bylaws, as in effect on the date hereof (the "BYLAWS"). The Company
shall provide the Buyer with a written update of this representation signed by
the Company's Chief Executive or Chief Financial Officer on behalf of the
Company as of the Closing Date.
d. Issuance of Shares. The Registrable Securities and the
Preferred Shares are duly authorized and, upon issuance in accordance with the
terms hereof and thereof, shall be validly issued, fully paid and
non-assessable, and free from all taxes, liens and charges with respect to the
issue thereof.
e. No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby will not (i) result in a violation of the
Articles of Incorporation or Bylaws or (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 is a party, or result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations) applicable to the Company or by which any property or
asset of the Company is bound or affected (except for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not,
-5-
6
individually or in the aggregate, have a Material Adverse Effect). The
business of the Company is not being conducted, and shall not be conducted
through the latest of (i) the Closing Date or (ii) the conversion or redemption
of the last of the Preferred Shares, in violation of any law, ordinance or
regulation of any governmental entity, except for possible violations which
either singly or in the aggregate do not have a Material Adverse Effect.
Except as required under the 1933 Act and any applicable state securities laws,
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 this
Agreement in accordance with the terms hereof.
f. SEC Documents, Financial Statements. Since January 1, 1993,
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 Exchange Act of 1934, as amended (the "1934 ACT") (all of
the foregoing filed prior to the date hereof and all exhibits included therein
and financial statements and schedules thereto and documents (other than
exhibits) incorporated by reference therein, being hereinafter referred to
herein as the "SEC DOCUMENTS"). The Company has delivered to the Buyer true
and complete copies of the SEC Documents, except for such exhibits, schedules
and incorporated 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 include
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 Buyer and 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
-6-
7
statements therein, in the light of the circumstance under which they are made,
not misleading.
g. Absence of Certain Chances. Since September 30, 1995, there
has been no material adverse change and no material adverse development in the
business, properties, operations, financial condition, results of operations or
prospects of the Company.
h. Absence of Litigation. Except as set forth in its Form 10-Q
for the quarter ended September 30, 1995, there is no action, suit, proceeding,
inquiry or investigation before or by any court, public board or body pending
or, to the knowledge of the Company, threatened against or affecting the
Company, wherein an unfavorable decision, ruling or finding would have a
Material Adverse Effect or which would adversely affect the validity or
enforceability of, or the authority or ability of the Company to perform its
obligations under, this Agreement or any of the documents contemplated herein.
4. COVENANTS
a. Best Efforts. The parties shall use their best efforts timely
to satisfy each of the conditions described in Section 6 and 7 of this
Agreement.
b. Form D; Blue Sky Laws. 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 the Buyer promptly after such filing. The Company shall, on or
before the Closing Date, 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 Buyer at the closing 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 Buyer on
or prior to the Closing Date.
c. Reporting Status. Until the earlier of (i) the date as of
which the Investors may sell all the Registrable Securities without restriction
pursuant to Rule 144(k) promulgated under the 1933 Act, or (ii) the date on
which (A) the Investors have sold all the Registrable Securities 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 permit such termination. The Investors shall give
notice to the Company when they have sold all of the Registrable Securities.
-7-
8
d. Use of Proceeds. The Company will use the proceeds from the
sale of the Common Shares and the Preferred Shares for the Company's internal
working capital purposes and shall not directly or indirectly, use such
proceeds for any loan to or investment in any other corporation, partnership,
enterprise or other person.
e. Expenses. Each party shall pay its respective expenses
incurred in connection with the negotiation, preparation, execution, delivery
and performance of this Agreement and Registration Rights Agreement.
f. Financial Information. The Company agrees to send the
following reports to the Buyer until the Buyer transfers, assigns, or sells all
of the Registrable Securities: (i) within five (5) days after the filing with
the SEC, a copy of its Annual Report on Form 10-K, its Quarterly Reports on
Form 10-Q and any Current Reports on Form 8-K; and (ii) within one day after
release, copies of all press releases issued by the Company or any of its
subsidiaries.
g. Reservation of Shares. The Company shall at times have
authorized, and reserved for the purpose of issuance, a sufficient number of
shares of Common Stock to provide for the conversion of the Preferred Shares
and issuance of the Dividend Shares.
h. Listing. The Company shall promptly secure the listing of the
Registrable Securities upon each national securities exchange or automated
quotation system, if any, 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 shares of
Registrable Securities from time to time issuable under the terms of this
Agreement and the Registration Rights Agreement.
5. TRANSFER AGENT INSTRUCTIONS
The Company shall irrevocably instruct its transfer agent to issue
certificates for the Conversion Shares and Dividend Shares in such amounts as
specified from time to time by the Company to the transfer agent. Prior to
registration of the Registrable Securities 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 such
instructions referred to in this Section 5, and stop transfer instructions to
give effect to Section 2(f) hereof prior to registration of the Registrable
Securities under the 1933 Act, will be given by the Company to its transfer
agent and that the Registrable Securities and the Preferred Shares 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 shall affect in any way the Buyer's obligations and
agreement
-8-
9
to comply with all applicable securities laws upon resale of the Registrable
Securities and the Preferred Shares. If the Buyer provides the Company with an
opinion of counsel, reasonably satisfactory in form, scope and substance to the
Company, that registration of a resale by the Buyer of any of the Registrable
Securities or the Preferred Shares is not required under the 1933 Act, the
Company shall permit the transfer, and, in the case of the Common Shares, the
Preferred Shares, the Conversion Shares or the Dividend Shares, promptly
instruct its transfer agent to issue one or more certificates in such name and
in such denominations as specified by the Buyer.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL
The obligation of the Company hereunder to sell the Common Shares and
the Preferred Shares is subject to the satisfaction, at or before the 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:
a. The parties shall have executed this Agreement and the
Registration Rights Agreement, and delivered the same to each other.
b. The Buyer shall have delivered the Purchase Price to the
Company.
c. The representations and warranties of the Buyer shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and the Buyer shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Buyer at or prior to the Closing Date.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE
The obligation of the Buyer hereunder to purchase the Common Shares
and the Preferred Shares is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for the Buyer's sole benefit and may be waived by the Buyer at
any time in its sole discretion:
a. The parties shall have executed this Agreement and the
Registration Rights Agreement, and delivered the same to each other.
b. Until the Closing Date, the Common Stock shall be authorized
for quotation on Nasdaq-NMS, and trading in the Common Stock (or on Nasdaq-NMS
generally) shall not have been suspended by the SEC or Nasdaq.
-9-
10
c. The representations and warranties of the Company shall be
true and correct in all material respects as of the date when made and as of
the 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 this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date. The Buyer
shall have received a certificate, executed by the chief financial officer of
the Company, dated as of the Closing Date, to the foregoing effect and as to
such other matters as may be reasonably requested by the Buyer.
d. The Buyer shall have received opinions of the Company's
counsel and General Counsel, each dated as of the Closing Date, in form, scope
and substance reasonably satisfactory to the Buyer and in substantially the
same forms as EXHIBITS B AND C, respectively, attached hereto.
e. The Buyer shall have received the officer's certificate
described in Section 3(c) above, dated as of the Closing Date.
8. GOVERNING LAW; MISCELLANEOUS
a. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Washington without
regard to the principles of conflict of laws.
b. Counterparts. This Agreement may be executed in two or more
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 two
(2) 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 or the validity or enforceability of this Agreement
in any other jurisdiction.
e. Entire Agreement; Amendments. This Agreement and the
instruments referenced herein contain the entire understanding of the parties
with respect to the
-10-
11
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor the Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision
of this Agreement may be waived or amended other than by an instrument in
writing signed by the party to be charged with enforcement.
f. Notices. Any notices required or permitted to be given under
the terms of this Agreement shall be sent by mail or delivered personally or by
courier and shall be effective five days after being placed in the mail, if
mailed, or upon receipt, if delivered personally or by courier, in each case
addressed to a parry. The addresses for such communications shall be:
If to the Company:
NeoRx Corporation
000 Xxxx Xxxxxxxx
Xxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
With copy to:
Xxxxxxx Coie
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx XxXxxx, Esq.
If to the Buyer, at the address on the signature page.
Each party shall have provide notice to the other party of any change in
address.
g. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and assigns.
Neither the Company nor the Buyer shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other (which
consent may be withheld for any reason in the sole discretion of the party from
whom consent is sought). Notwithstanding the foregoing, the Buyer may assign
its rights hereunder to any of its "affiliates," as that term is defined under
the 1934 Act, without the consent of the Company.
-11-
12
h. 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. The representations and warranties of the Company
and the Buyer contained in Sections 2 and 3 and the agreements and covenants
set forth in Sections 4, 5, 8(g), 8(h) and 8(k), and this subsection shall
survive the closing.
k. Publicity. The Company and the Buyer 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 the Buyer, to make any
press release with respect to such transactions as is required by applicable
law and regulations (although the Buyer shall be consulted by the Company in
connection with any such press release prior to its release and shall be
provided with a copy thereof).
l. 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.
m. Termination. In the event that the closing shall not have
occurred on or before five (5) days from the date hereof, this Agreement shall
terminate at the close of business on such date.
-12-
13
IN WITNESS WHEREOF, the Buyer and the Company have caused this
Agreement to be duly executed as of the day and year first above written.
NEORX CORPORATION
By
-------------------------------------
-------------------------------------
Senior Vice President
BUYER
By
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
Address:
-13-
