Exhibit 99.1
AMENDED AND RESTATED
PREFERRED EXCHANGE AGREEMENT
THIS AMENDED AND RESTATED PREFERRED EXCHANGE AGREEMENT (this
"AGREEMENT") is entered into effective the 12th day of April, 2005 by and among
Epimmune Inc., a Delaware corporation (the "COMPANY"), and X.X. Xxxxxx LLC, a
Delaware limited liability company ("HOLDER").
RECITALS
WHEREAS, Holder is the beneficial owner of 859,666 shares of the
Company's Series S preferred stock and 549,622 shares of the Company's Series
S-1 preferred stock (collectively, the "PREFERRED SHARES"), which Preferred
Shares represent all of the outstanding shares of preferred stock of the
Company;
WHEREAS, the Company has entered into that certain Share Exchange
Agreement, dated March 15, 2005, by and among the Company and certain
shareholders of Immuno-Designed Molecules, S.A. ("IDM") (the "SHARE EXCHANGE
AGREEMENT");
WHEREAS, it is a condition to the closing of the transactions under the
Share Exchange Agreement (the "CLOSING") that the Preferred Shares be exchanged
(the "EXCHANGE") for shares of common stock of the Company (the "COMMON
SHARES");
WHEREAS, the Company and Holder have entered into that certain
Preferred Exchange Agreement, dated March 15, 2005 (the "PRIOR AGREEMENT");
WHEREAS, the Company and Holder desire to amend and restate the Prior
Agreement in its entirety as set forth herein; and
WHEREAS, Holder desires to effect the Exchange on the terms and subject
to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of foregoing and the mutual covenants
and promises contained in this Agreement, and for other valuable consideration
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. TERMS OF EXCHANGE.
1.1 EXCHANGE OF PREFERRED SHARES. Subject to the terms and conditions
herein, immediately prior to the Closing, all of the Preferred Shares
shall be exchanged for a total of 1,949,278 Common Shares (as adjusted
to reflect the effect of any stock split, reverse stock split, stock
dividend, reorganization, recapitalization, reclassification,
consolidation, combination or like change with respect to the
1.
Common Shares occurring on or after the date of this Agreement and prior
to the Closing).
1.2 REVIEW OF SHARE EXCHANGE AGREEMENT. The Company has provided Holder with
a substantially final draft of the Share Exchange Agreement, which is
marked "DRAFT 2/15/05" (the "FORM SHARE EXCHANGE AGREEMENT").
1.3 WAIVER AND TERMINATION OF RIGHT OF FIRST REFUSAL. Holder hereby waives
any and all rights under Section 4 of that certain Investor Rights
Agreement, dated July 1, 1999, between the parties hereto (the "INVESTOR
RIGHTS AGREEMENT") and agrees that Section 4 of the Investor Rights
Agreement is hereby terminated and of no further force and effect.
1.4 DELIVERY OF CERTIFICATES. Within 10 days following the date hereof,
Holder shall deliver to the Company the certificates representing the
Preferred Shares, each duly endorsed for transfer and free and clear of
any liens, security interests, encumbrances or adverse claims, to be
held by the Company pending the Closing. As soon as reasonably
practicable, and in any event within 10 days following the Closing, the
Company shall issue to Holder one or more stock certificates
representing the Common Shares issuable to the Holder pursuant to
Section 1.1 hereof.
1.5 CONDITIONS TO EXCHANGE. The obligations of the Company and Holder
hereunder to complete the exchange of Preferred Shares for Common
Shares, shall be subject to satisfaction of the following conditions:
(A) the delivery by Holder to the Company of stock certificates
representing the Preferred Shares in accordance with Section 1.4
above;
(B) the common stock of the Company is listed for trading on the Nasdaq
National Market (the "NASDAQ"); and
(C) all of the conditions (other than the condition relating to the
consummation of the Exchange) to the consummation of the
transactions contemplated by the Share Exchange Agreement
(substantially in accordance with the terms set forth in the Form
Share Exchange Agreement, as may be amended from time to time in
accordance with Section 4.1 hereof) shall have been satisfied or
waived and the Closing shall occur immediately following the
Exchange.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents
and warrants to Holder as follows:
2.1 CORPORATE POWER. The Company has all requisite legal and corporate power
to execute and deliver this Agreement, to issue the Company Shares in
exchange for the Preferred Shares and to carry out and perform its
obligations under the terms of this Agreement.
2.
2.2 AUTHORIZATION. The Common Shares to be issued by the Company upon
exchange of the Preferred Shares, when issued in compliance with the
provisions of this Agreement, will be validly issued and will be fully
paid and nonassessable.
2.3 VALID OBLIGATION; NO CONFLICTS. This Agreement has been duly executed
and delivered by the Company, and constitutes a valid and legally
binding obligation of the Company, enforceable in accordance with its
terms. The execution and performance by the Company of this Agreement
does not contravene, violate or conflict with or result in a breach of
any contractual obligation of the Company or any judgment, injunction or
order of any nature binding upon the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE HOLDER. Holder hereby represents and
warrants to the Company as follows:
3.1 CORPORATE POWER. Holder has all requisite legal and corporate power to
execute and deliver this Agreement and to deliver the Preferred Shares,
free and clear of all liens, encumbrances, equities, claims,
restrictions, security interests, voting trusts or other defects of
title, in exchange for the Common Shares and to carry out and perform
its obligations under the terms of this Agreement.
3.2 AUTHORIZATION; TITLE. All corporate action on the part of Holder
necessary for the exchange of Preferred Shares for Common Shares has
been taken. Holder has good and marketable title to the Preferred Shares
to be exchanged pursuant to this Agreement, free and clear of all liens,
encumbrances, equities, claims, restrictions, security interests, voting
trusts or other defects of title. Upon delivery to the Company of the
stock certificates representing the Preferred Shares, the Company shall
acquire good and valid title to Preferred Shares free and clear of all
liens, security interests, encumbrances and adverse claims other than
those created by the Company.
3.3 VALID OBLIGATION; NO CONFLICTS. This Agreement has been duly executed
and delivered by Holder, and constitutes a valid and legally binding
obligation of Holder, enforceable in accordance with its terms. The
execution and performance by Holder of this Agreement does not
contravene, violate or conflict with or result in a breach of any
contractual obligation of Holder or any judgment, injunction or order of
any nature binding upon Holder.
3.4 PURCHASE ENTIRELY FOR OWN ACCOUNT. Holder is acquiring the Common Shares
pursuant to this Agreement for investment for Holder's own account, not
as a nominee or agent, and not with a view to the resale or distribution
of any part thereof, and Holder has no present intention of selling,
granting any participation in, or otherwise distributing the same.
Holder further represents that Holder does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer
or grant participation to such person or to any third person, with
respect to any of the Common Shares.
3.
3.5 DISCLOSURE OF INFORMATION. Holder has received all the information that
it has requested and that it considers necessary or appropriate for
deciding whether to enter into this Agreement and to acquire the Common
Shares. Holder further represents that it has had an opportunity to ask
questions and receive answers from the Company regarding such
information.
3.6 INVESTMENT EXPERIENCE. Holder is an investor in securities of companies
in the development stage and acknowledges that it is able to fend for
itself, can bear the economic risk of its investment and has such
knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the
Common Shares. Holder also represents it has not been organized solely
for the purpose of acquiring the Common Shares.
3.7 ACCREDITED INVESTOR. Holder is an "accredited investor" as such term is
defined in Rule 501 of the General Rules and Regulations prescribed by
the SEC pursuant to the Securities Act of 1933, as amended (the
"SECURITIES ACT").
3.8 RESTRICTED SECURITIES. Holder understands that (a) the Common Shares
have not been registered under the Securities Act by reason of a
specific exemption therefrom, that such securities must be held by it
indefinitely and that Holder must, therefore, bear the economic risk of
such investment indefinitely, unless in each case a subsequent
disposition thereof is registered under the Securities Act or is exempt
from such registration; (b) each certificate representing the Common
Shares will be endorsed with the legend set forth in Section 5.2 below;
and (c) the Company will instruct any transfer agent not to register the
transfer of the Common Shares (or any portion thereof) unless the
conditions specified in the foregoing legends are satisfied, until such
time as a transfer is made, pursuant to the terms of this Agreement, and
in compliance with Rule 144 or pursuant to a registration statement or,
if the opinion of counsel referred to above is to the further effect
that such legend is not required any longer in order to establish or
enforce compliance with any provisions of the Securities Act or this
Agreement.
4. COVENANTS.
4.1 MATERIAL AMENDMENTS TO THE SHARE EXCHANGE AGREEMENT. Prior to the
Closing, Holder shall have the right to review, and the Company shall
deliver to Holder a copy of, any material change to the Form Share
Exchange Agreement provided under Section 1.2 made prior to execution of
the Share Exchange Agreement and any material amendment to the Share
Exchange Agreement made after it is signed. Holder shall have five
business days after delivery of such change to Holder in accordance with
this Section 4.1 to object in writing to any material change to the Form
Share Exchange Agreement or amendment to the Share Exchange Agreement.
In the event that Holder fails to deliver such written objection to the
Company within the specified time limit, Holder shall be deemed to have
accepted such change or amendment and the Form Share Exchange Agreement
shall be deemed to include such change or amendment.
4.
4.2 USE OF CERTAIN FUNDS. The Company shall not use any cash raised in the
financing completed by IDM on December 23, 2004 to make or pay any cash
distribution or cash dividend to: (a) the stockholders of the Company;
(b) Medarex, Inc.; (c) Sanofi-Aventis, S.A.; or (d) the shareholders,
investors, officers, directors or employees of IDM; provided, however,
that nothing in this Section 4.2 shall prevent the Company from paying:
(x) any amounts due to Medarex, Inc. or Sanofi-Aventis, S.A. in
connection with any commercial arrangements between either Medarex, Inc.
or Sanofi-Aventis, S.A., on the one hand, and IDM, on the other hand, or
(y) payment of salaries and bonuses to employees of the Company in the
ordinary course of business.
4.3 REGISTRATION RIGHTS. The Company shall register the Common Shares for
resale under the Resale Registration Statement (as defined in the Share
Exchange Agreement), on the same terms and subject to the same
conditions as set forth in Section 6.07 of the Share Exchange Agreement.
For purposes of such Section 6.07 only, Holder shall be deemed a
"Principal Company Shareholder" and the Common Shares shall be deemed
"Issuer Common Stock" issued pursuant to the Share Exchange Agreement.
The rights under this Section 4.3 shall be in lieu of any rights under
Section 2 of the Investor Rights Agreement and Holder agrees that upon
the date that the Resale Registration Statement becomes effective,
Section 2 of the Investor Rights Agreement shall terminate and be of no
further force and effect.
4.4 NASDAQ LISTING. The Company shall use commercially reasonable efforts
to: (a) maintain trading of its shares of common stock on the Nasdaq;
and (b) meet the Nasdaq minimum listing standards in effect from time to
time.
5. MISCELLANEOUS.
5.1 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of California,
without reference to conflicts of laws principles.
5.2 LEGENDS. Each certificate representing Common Shares issued under this
Agreement shall be endorsed with the following legends (in addition to
any legend required under applicable state securities laws):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO
THE SECURITIES UNDER SAID ACT OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.
5.3 TERMINATION. This Agreement shall terminate in its entirety and be of no
further force and effect upon the earlier of: (i) the date that Holder
no longer beneficially
5.
owns any of the Common Shares issued in the Exchange; or (ii) the two
year anniversary of this Agreement.
5.4 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon,
the successors, assigns, heirs, executors and administrators of the
parties hereto.
5.5 ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement among the parties with regard to the
subjects hereof.
5.6 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
5.7 SEVERABILITY. In the case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
5.8 FURTHER ASSURANCES. Each party to this Agreement covenants and agrees to
execute and deliver such other agreements and writings and to perform
such other acts as may be necessary for the consummation of the matters
contemplated by this Agreement.
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6.
IN WITNESS WHEREOF, this AMENDED AND RESTATED PREFERRED EXCHANGE
AGREEMENT has been executed and delivered as of the date first written above.
EPIMMUNE INC. X.X. XXXXXX LLC
By:/s/ Xxxxxx De Vaere By:/s/ Xxxx Xxxxxx
-------------------------------------- --------------------------------
Name: Xxxxxx De Vaere Name: Xxxx Xxxxxx
Title: VP, Finance & Administration and Title: President and Chief
Chief Financial Officer Executive Officer
