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EXHIBIT 4.1
COMMON STOCK
PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made as of November 7, 1997 (the
"Effective Date"), by and between CYTEL CORPORATION, a Delaware corporation with
its principal place of business at 0000 Xxxx Xxxxxxx Xxxxx, Xxx Xxxxx,
Xxxxxxxxxx 00000 (the "Company"), and the purchaser whose name and address is
set forth on the signature page hereof (the "Purchaser").
AGREEMENT
In consideration of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Company and the Purchaser hereby agree as follows:
SECTION 1. AUTHORIZATION OF SALE OF THE SECURITIES. Subject to the
terms and conditions of this Agreement, the Company has, or before the Closing
(as defined below) will have, authorized the sale and issuance of up to
5,000,000 shares of its Common Stock (the "Common Stock") pursuant to the
Agreements (as defined below). The shares of Common Stock sold to the Purchaser
hereunder shall be referred to herein as the "Shares."
SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SHARES.
2.1 SALE OF SHARES. At the Closing (as defined in Section 3), the
Company will sell to the Purchaser, and the Purchaser will purchase from the
Company, at a purchase price of $1.75 per Share, the number of Shares set forth
below:
NUMBER OF SHARES TO BE AGGREGATE
PURCHASED PURCHASE PRICE
------------------------ ----------------
2.2 SEPARATE AGREEMENTS. The Company proposes to enter the same form of
purchase agreement with certain other investors (the "Other Purchasers") and
expects to complete sales of Shares to them. The Purchaser and the Other
Purchasers are hereinafter sometimes collectively referred to as the
"Purchasers," and this Agreement and the agreements executed by the Other
Purchasers are hereinafter sometimes collectively referred to as the
"Agreements."
2.3 ACCEPTANCE OF PROPOSED PURCHASE OF SHARES. The Company shall have
no obligation hereunder with respect to the Purchaser until the Company shall
execute and deliver to the Purchaser an executed copy of this Agreement. If this
Agreement is not executed and delivered by the Company, this Agreement shall be
of no further force and effect.
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SECTION 3. CLOSING AND DELIVERY.
3.1 CLOSING. The Closing of the purchase and sale of the Shares
pursuant to this Agreement (the "Closing") shall be held as soon as practicable
after the satisfaction or waiver of all conditions to Closing set forth in
Sections 7 and 8 hereof, at the offices of Xxxxxx Godward LLP, 0000 Xxxxxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxxxxx 00000, or on such other date and place as may be
agreed to by the Company and the Purchaser. The Company shall give at least five
(5) business days prior written notice to the Purchaser, in a manner provided
for in Section 11 hereof, of the date, time and location of the Closing. At or
prior to the Closing, the Purchaser shall execute any related agreements or
other documents required to be executed hereunder, dated as of the date of the
Closing (the "Closing Date").
3.2 DELIVERY OF THE SHARES AT THE CLOSING. At the Closing, the Company
shall deliver to the Purchaser stock certificates registered in the name of the
Purchaser, and/or in such nominee name(s) as designated by the Purchaser,
representing the number of Shares to be purchased by the Purchaser at the
Closing as set forth in Section 2.1 against payment of the purchase price for
such Shares. The name(s) in which the stock certificates are to be issued to the
Purchaser are set forth in the Stock Certificate Questionnaire in the form
attached hereto as Appendix I, as completed by the Purchaser.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
Except as set forth on the Schedule of Exceptions attached hereto as
Exhibit A, the Company hereby represents and warrants as of the date hereof to,
and covenants with, the Purchaser as follows:
4.1 ORGANIZATION AND STANDING. The Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
State of Delaware, has full corporate power and authority to own or lease its
properties and conduct its business as presently conducted and as described in
the Confidential Offering Memorandum, dated July 8, 1997, as amended and
supplemented by the Supplement, dated November 6, 1997 (the "Memorandum"), and
is duly qualified as a foreign corporation and in good standing in all
jurisdictions in which the character of the property owned or leased or the
nature of the business transacted by it makes qualification necessary (except
where the failure to be so qualified would not have a material adverse effect on
the business, properties, financial condition or results or operations of the
Company). The Company's only operating subsidiary is Epimmune Inc. Epimmune Inc.
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware.
4.2 CORPORATE POWER; AUTHORIZATION. The Company has all requisite
corporate power, and has taken all requisite corporate action, to execute and
deliver this Agreement, sell and issue the Shares and carry out and perform all
of its obligations under this Agreement. This Agreement constitutes the legal,
valid and binding obligation of the Company, enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the
enforcement of creditors'
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rights generally, (ii) as limited by equitable principles generally, including
any specific performance, and (iii) as to those provisions of Section 9.3
relating to indemnity or contribution. The execution and delivery of this
Agreement does not, and the performance of this Agreement and the compliance
with the provisions hereof and the issuance, sale and delivery of the Shares by
the Company will not, conflict with, or result in a breach or violation of the
terms, conditions or provisions of, or constitute a default under, or result in
the creation or imposition of any lien pursuant to the terms of, the Certificate
of Incorporation or Bylaws of the Company or any statute, law, rule or
regulation applicable to the Company or any state or federal order, judgment or
decree applicable to the Company or any indenture, mortgage, lease or other
agreement or instrument to which the Company or any of its properties is
subject, where such conflict, breach or violation would have a material adverse
effect on the Company.
4.3 ISSUANCE AND DELIVERY OF THE SHARES. The Shares, when issued and
paid for in compliance with the provisions of this Agreement, will be validly
issued, fully paid and nonassessable and will not be issued in violation of any
preemptive right.
4.4 CONFIDENTIAL OFFERING MEMORANDUM; SEC DOCUMENTS; FINANCIAL
STATEMENTS. Each complete or partial statement or report included as an appendix
to the Memorandum is a true and complete copy of or excerpt from such document
as filed by the Company with the United States Securities and Exchange
Commission (the "SEC"). The Company has filed in a timely manner all documents
that the Company was required to file with the SEC under Sections 13, 14(a) and
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
during the twelve (12) months preceding the date of this Agreement. As of their
respective filing dates (or, if amended, when amended), all documents filed by
the Company with the SEC (the "SEC Documents") complied in all material respects
with the requirements of the Exchange Act. Neither the Memorandum nor any of the
SEC Documents as of their respective dates contained any untrue statement of
material fact or omitted to state a material fact required (under the federal
securities laws in connection with the sale of the Shares) to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The financial statements of the
Company included in the SEC Documents and the Memorandum (the "Financial
Statements") comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto. The Financial Statements have been prepared in accordance
with generally accepted accounting principles consistently applied and fairly
present the financial position of the Company at 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, recurring adjustments).
4.5 INTELLECTUAL PROPERTY. Except as set forth in the Memorandum, the
Company owns or possesses adequate rights to use all material patents, patent
rights, inventions, trade secrets and know-how described or referred to in the
Memorandum as owned or used by it or that are necessary for the conduct of its
business as presently conducted and as described in the Memorandum. Except as
set forth in the Memorandum, the Company has not received any notice of, nor has
any knowledge of, any infringement of or conflict with asserted rights of others
with respect to any patent, patent right, invention, trade secret or know-how
that, individually or
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in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the business, properties, financial
condition or results or operations of the Company.
4.6 CAPITALIZATION. All of the Company's outstanding shares of capital
stock have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and were not issued in violation of or subject to any
preemptive right or other rights to subscribe for or purchase securities. The
actual authorized and outstanding capital stock of the Company as of November 5,
1997 is as set forth in the Memorandum. Except as set forth in the Memorandum,
there are no outstanding options to purchase, or any preemptive rights or other
rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell shares of the
Company's capital stock or any such options, rights, convertible securities or
obligations.
4.7 LITIGATION. Except as set forth in the Memorandum, there is no
pending or, to the Company's knowledge, threatened, action, suit or other
proceeding to which the Company is a party or to which its property or assets
are subject.
4.8 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state, or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
this Agreement except for (a) compliance with the securities and blue sky laws
in the states and other jurisdictions in which shares of Common Stock are
offered and/or sold, which compliance will be effected in accordance with such
laws, and (b) the filing of a registration statement and all amendments thereto
with the SEC as contemplated by Section 9.1 of this Agreement.
4.9 NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed herein or
in the Memorandum, since June 30, 1997, there have not been any changes in the
assets, liabilities, financial condition or operations of the Company from that
reflected in the Company's Form 10-Q for the period ended June 30, 1997 except
changes in the ordinary course of business or which have not been, either
individually or in the aggregate, materially adverse.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.
5.1 The Purchaser represents and warrants to and covenants with the
Company that:
(a) The Purchaser, taking into account the personnel and
resources it can practically bring to bear on the purchase of the Shares
contemplated hereby, either alone or together with the advice of the Purchaser's
representative, is knowledgeable, sophisticated and experienced in making, and
is qualified to make, decisions with respect to investments in shares presenting
an investment decision like that involved in the purchase of the Shares,
including investments in securities issued by the Company, and has requested,
received, reviewed and considered, either alone or with the Purchaser's
representative, all information the Purchaser
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deems relevant (including the Memorandum and any SEC Documents) in making an
informed decision to purchase the Shares.
(b) The Purchaser is acquiring the Shares being acquired by
the Purchaser pursuant to this Agreement in the ordinary course of its business
and for its own account for investment only and with no present intention of
distributing any of such Shares or any arrangement or understanding with any
other persons regarding the distribution of such Shares, except in compliance
with Section 5.1(c).
(c) The Purchaser will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the securities
purchased hereunder except in compliance with the Securities Act of 1933, as
amended (the "Securities Act"), applicable blue sky laws, and the rules and
regulations promulgated thereunder.
(d) The Purchaser has completed or caused to be completed the
subscription documents enclosed with this Agreement, including the Registration
Questionnaire, for use in preparation of the Registration Statement to be filed
by the Company, and the answers thereto are true and correct as of the date
hereof and will be true and correct as of the effective date of the applicable
Registration Statement (provided that the Purchaser shall be entitled to update
such information by providing notice thereof to the Company prior to the
effective date of such Registration Statement).
(e) The Purchaser has, in connection with its decision to
purchase the Securities, relied with respect to the Company and its affairs
solely upon the SEC Documents and the other information delivered to the
Purchaser by the Company as described in Sections 4.4 and 5.1(a) above and the
representations and warranties of the Company contained herein.
(f) The Purchaser is an "accredited investor" within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act or a
Qualified Institutional Buyer within the meaning of Rule 144A promulgated under
the Securities Act.
(g) The Purchaser has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement. Upon the execution and
delivery of this Agreement by the Purchaser, this Agreement shall constitute a
valid and binding obligation of the Purchaser, enforceable in accordance with
its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the
enforcement of creditors' rights generally, (ii) as limited by equitable
principles generally, including any specific performance, and (iii) as to those
provisions of Section 9.3 relating to indemnity or contribution.
(h) The Purchaser, together with the Purchaser's Affiliates
and Associates (as defined in Rule 12b-2 of the General Rules and Regulations
promulgated under the Exchange Act), is not, and will not by virtue of the
transactions contemplated by this Agreement be, a
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Beneficial Owner (as defined in that certain Rights Agreement dated March 19,
1993) of 15% or more of the outstanding shares of Common Stock of the Company.
5.2 The Purchaser represents and warrants to and covenants with the
Company that it has not engaged and will not engage in any short sales of the
Company's Common Stock prior to the effectiveness of the Registration Statement,
except to the extent that any such short sale is fully covered by shares of
Common Stock of the Company other than the Shares.
5.3 The Purchaser understands that nothing in the Memorandum, this
Agreement or any other materials presented to the Purchaser in connection with
the purchase and sale of the Shares constitutes legal, tax or investment advice
and that no independent legal counsel has reviewed these documents and materials
on the Purchaser's behalf. The Purchaser has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Shares.
SECTION 6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchaser herein and in the certificates for the securities delivered
pursuant hereto shall survive the execution of this Agreement, the delivery to
the Purchaser of the Shares being purchased and the payment therefor.
SECTION 7. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING. The
Company's obligation to complete the sale and issuance of the Shares and deliver
the Shares to the Purchaser shall be subject to the following conditions to the
extent not waived by the Company:
7.1 RECEIPT OF PAYMENT. The Escrow Agent (as defined in that certain
Escrow Agreement of even date herewith) shall have received payment, by check or
wire transfer of immediately available funds, in the full amount of the purchase
price for the number of Shares being purchased by the Purchaser at the Closing
as set forth in Section 2.1.
7.2 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Purchaser in Section 5 hereof shall be true and correct
when made, and shall be true and correct on the Closing Date.
SECTION 8. CONDITIONS TO PURCHASERS' OBLIGATIONS AT THE CLOSING. The
Purchaser's obligation to accept delivery of the Shares and to pay for the
Shares shall be subject to the following conditions to the extent not waived by
such Purchaser:
8.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 4 hereof shall be true and correct
when made. At the Closing, the President of the Company shall deliver a
certificate certifying that the representations and warranties made by the
Company in Section 4 are true and correct as of the date of the Closing.
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8.2 LEGAL OPINION. Purchasers shall have received from Xxxxxx Godward
LLP, counsel to the Company, an opinion letter addressed to the Purchasers,
dated as of the Closing Date, in the form attached hereto as Exhibit B.
8.3 NO GENERAL SOLICITATION; BLUE SKY. The Company shall have received
such assurances as it may reasonably request from BT Alex. Xxxxx Incorporated
(the "Placement Agent") that the Shares were not offered or sold by any form of
general solicitation or advertising and a list from the Placement Agent of
states where Shares are being sold.
SECTION 9. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES
ACT
9.1 REGISTRATION PROCEDURES AND EXPENSES. The Company is obligated to
do the following:
(a) As soon as practicable following the Closing and in any
event no later than forty-five (45) days following the Closing, the Company
shall prepare and file with the SEC one or more registration statements in order
to register with the SEC the resale by the Purchasers, from time to time, of the
Shares through Nasdaq or the facilities of any national securities exchange on
which the Company's Common Stock is then traded, or in privately negotiated
transactions (a "Registration Statement"). The Company shall use its best
efforts to cause such Registration Statement to be declared effective as soon
thereafter as reasonably possible.
(b) The Company shall prepare and file with the SEC (i) such
amendments and supplements to the Registration Statement and the prospectus used
in connection therewith, (ii) such SEC Documents and (iii) such other filings
required by the SEC, in each case as may be necessary to keep the Registration
Statement continuously effective and not misleading until the earliest of (A)
the second anniversary date of the Closing, (B) such date as all of the Shares
held by all of the Purchasers have been resold or (C) such time as all of the
Shares held by the Purchasers can be sold within a given three-month period
pursuant to Rule 144 under the Securities Act. Notwithstanding the foregoing,
if, at any time following the effectiveness of the Registration Statement, the
Company shall have determined that the Company may be required to disclose any
material corporate development, the Company may suspend the effectiveness of the
Registration Statement until such time as an amendment to the Registration
Statement has been filed by the Company and declared effective by the SEC or
until such time as the Company has filed an appropriate report with the SEC
pursuant to the Exchange Act, which suspension shall endure for such period as
deemed necessary by the Company upon advice of counsel (a "Suspension Period"),
by giving notice to the Purchasers. The Company will use its best efforts to
minimize the length of any Suspension Period. The Purchaser agrees that, upon
receipt of any notice from the Company of a Suspension Period, the Purchaser
will not sell any Shares pursuant to the Registration Statement until (i) the
Purchaser is advised in writing by the Company that the use of the applicable
prospectus may be resumed, (ii) the Purchaser has received copies of any
additional or supplemental or amended prospectus, if applicable, and (iii) the
Purchaser has
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received copies of any additional or supplemental filings which are incorporated
or deemed to be incorporated by reference in such prospectus.
(c) In order to facilitate the public sale or other
disposition of all or any of the shares by the Purchaser, the Company shall
furnish to the Purchaser with respect to the Shares registered under the
Registration Statement such number of copies of prospectuses, prospectus
supplements and preliminary prospectuses as the Purchaser reasonably requests in
conformity with the requirements of the Securities Act.
(d) The Company shall file any documents required of the
Company for normal blue sky clearance in states specified in writing by the
Purchaser; provided, however, that the Company shall not be required to qualify
to do business or consent to service of process in any jurisdiction in which it
is not now so qualified or has not so consented.
(e) Other than fees and expenses, if any, of counsel or other
advisers to the Purchasers, which fees and expenses shall be borne by the
Purchasers except as referred to in Section 12.8 below, the Company shall bear
all expenses (exclusive of any brokerage fees, underwriting discounts and
commissions) in connection with the procedures in paragraphs (a) through (d) of
this Section 9.1 and if requested by holders of at least a majority of the
Shares, the fees and expenses, if any, of one counsel to the Selling
Stockholders (as defined in Section 9.4) in an amount not exceeding $5,000.
(f) With a view to making available to the Purchasers the
benefits of Rule 144 promulgated under the Securities Act ("Rule 144") and any
other rule or regulation of the SEC that may at any time permit a Purchaser to
sell Shares to the public without registration or pursuant to registration, the
Company covenants and agrees to: (i) make and keep public information available,
as those terms are understood and defined in Rule 144, until the earlier of (A)
the second anniversary of the Closing Date or (B) such date as all of the Shares
shall have been resold; (ii) file with the SEC in a timely manner all reports
and other documents required of the Company under the Exchange Act; and (iii)
furnish to any Purchaser upon request, as long as the Purchaser owns any Shares,
(A) a written statement by the Company that it has complied with the reporting
requirements of the Exchange Act, (B) a copy of the most recent annual or
quarterly report of the Company, and (C) such other information as may be
reasonably requested in order to avail any Purchaser of any rule or regulation
of the SEC that permits the selling of any such Shares without registration
under the Securities Act.
9.2 TRANSFER OF SECURITIES AFTER REGISTRATION. The Purchaser agrees
that it will not effect any disposition of the Shares that would constitute a
sale within the meaning of the Securities Act, except:
(a) pursuant to the Registration Statement, in which case the
Purchaser shall submit the certificates evidencing the Shares to the Company's
transfer agent, accompanied by a separate "Purchaser's Certificate" (i) in the
form of Appendix I attached hereto, (ii) executed by such Purchaser or by an
officer of, or other authorized person designated by, such Purchaser, and
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(iii) to the effect that (A) the Shares have been sold in accordance with the
Registration Statement and (B) the requirement of delivering a current
prospectus has been satisfied; or
(b) the Purchaser shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and if
reasonably requested by the Company, the Purchaser shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such Shares under the
Securities Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
9.3 LEGENDS. Each certificate representing Shares shall (unless
otherwise permitted by the provisions of the Agreement) be stamped or otherwise
imprinted with a legend substantially similar to the following (in addition to
any legend required under applicable state securities laws or as provided
elsewhere in this Agreement):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL OR BASED ON
OTHER WRITTEN EVIDENCE IN THE FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS IN COMPLIANCE THEREWITH.
9.4 INDEMNIFICATION. As used in this Section 9.3 the following terms
shall have the following respective meanings:
(a) "SELLING STOCKHOLDER" shall mean the Purchaser and any
transferee of the Purchaser who is entitled to resell Shares pursuant to the
Registration Statement;
(b) "REGISTRATION STATEMENT" shall include any final
prospectus, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 9.1; and
(c) "UNTRUE STATEMENT" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
The Company agrees to indemnify and hold harmless each Selling
Stockholder from and against any losses, claims, damages or liabilities to which
such Selling Stockholder may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any failure to
comply with the covenants and agreements contained in Section 9.1 or 9.2 hereof,
or any
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Untrue Statement on or after the effective date of the Registration Statement,
or on or after the date of any prospectus or prospectus supplement or the date
of any sale by Purchaser thereunder, or arise out of any failure by the Company
to fulfill any undertaking included in the Registration Statement and the
Company will reimburse such Selling Stockholder for any reasonable legal or
other expenses reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim; provided, however, that the Company
shall not be liable to such Selling Stockholder in any such case to the extent
that such loss, claim, damage or liability arises out of, or is based upon, an
Untrue Statement made in such Registration Statement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Selling Stockholder specifically for use in preparation of the Registration
Statement, or the failure of such Selling Stockholder to comply with the
covenants and agreements contained in Section 9.1 or 9.2 hereof respecting sale
of the Shares or any statement or omission in any Prospectus that is corrected
in any subsequent prospectus that was delivered to the Selling Stockholder prior
to the pertinent sale or sales by the Selling Stockholder.
The Purchaser agrees to indemnify and hold harmless the Company (and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, each officer of the Company who signs the Registration
Statement and each director of the Company) from and against any losses, claims,
damages or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any failure to
comply with the covenants and agreements contained in Section 9.1 or 9.2 hereof
respecting sale of the Shares, or any Untrue Statement contained in the
Registration Statement on or after the effective date thereof, or in any
prospectus supplement as of its issue date or date of any sale by the Purchaser
thereunder, if such Untrue Statement was made in reliance upon and in conformity
with written information furnished by or on behalf of the Purchaser specifically
for use in preparation of the Registration Statement, and the Purchaser will
reimburse the Company (or such officer, director or controlling person), as the
case may be, for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding or
claim; provided that in no event shall any indemnity by the Purchaser under this
Section 9.3 exceed the gross proceeds received by the Purchaser from the sale of
Shares covered by such Registration Statement.
Promptly after receipt by any indemnified person of a notice of a claim
or the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 9.3, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, and, subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person and such
indemnifying person shall have been notified thereof, such indemnifying person
shall be entitled to participate therein, and, to the extent it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to such
indemnified person of its election to assume the defense thereof, such
indemnifying person shall not be liable to such indemnified person for any legal
expenses subsequently incurred by such indemnified person in connection with the
defense thereof; provided, however, that if there exists or shall exist a
conflict of interest that would make it
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inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel for all indemnified parties.
9.5 TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions precedent
imposed by Section 4, Section 5 or this Section 9 upon the transferability of
the Shares shall cease and terminate as to any particular number of the Shares
when such Shares shall have been sold or otherwise disposed of in accordance
with the intended method of disposition set forth in the Registration Statement
covering such Shares or at such time as an opinion of counsel satisfactory to
the Company shall have been rendered to the effect that such conditions are not
necessary in order to comply with the Securities Act.
9.6 INFORMATION AVAILABLE. So long as the Registration Statement is
effective covering the resale of Shares owned by the Purchaser, the Company will
furnish to the Purchaser:
(a) as soon as practicable after available (but in the case of
the Company's Annual Report to Stockholders, within 120 days after the end of
each fiscal year of the Company), one copy of (i) its Annual Report to
Stockholders (which Annual Report shall contain financial statements audited in
accordance with generally accepted auditing standards certified by a national
firm of certified public accountants); (ii) its Annual Report on Form 10-K;
(iii) its quarterly reports on Form 10-Q (the foregoing, in each case, excluding
exhibits); (iv) its Proxy Statement; and (v) its current reports on Form 8-K, if
any;
(b) upon the request of any Purchaser, all exhibits excluded
by the parenthetical in subparagraph (a)(iii) of this Section 9.5, in the form
generally available to the public; and
(c) upon the reasonable request of any Purchaser, an adequate
number of copies of the prospectuses and supplements to supply to any other
party requiring such prospectuses.
9.7 CHANGES IN PURCHASER INFORMATION. The Purchaser agrees to promptly
notify the Company of any changes in the information set forth in the
Registration Statement regarding the Purchaser or its plan of distribution set
forth in such Registration Statement.
SECTION 10. MARKET STAND OFF.The Purchaser hereby agrees, upon request
of the Company and its underwriters, that it shall not sell or otherwise
transfer or dispose of any Common Stock (or other securities) of the Company
held by it (other than those included in the registration) for a period
specified by the representative of the underwriters of Common Stock (or other
securities) of the Company not to exceed 90 days following the effective date of
a registration statement of the Company filed under the Securities Act, provided
that all executive officers and directors of the Company and enter into similar
agreements. The Purchaser agrees to
12
execute and deliver such other agreements as may be reasonably requested by the
Company or the underwriter which are consistent with the foregoing or which are
necessary to give further effect thereto. The obligations described in this
Section 10 shall not apply to a registration relating solely to employee benefit
plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the
future, or a registration relating solely to a SEC Rule 145 transaction on Form
S-4 or similar forms that may be promulgated in the future. The Company may
impose stop-transfer instructions with respect to the shares of Common Stock (or
other securities) subject to the foregoing restriction until the end of said 90
day period.
SECTION 11. BROKER'S FEE. The Company and the Purchaser hereby
represent that, except for amounts to be paid to the Placement Agent by the
Company as described in Section 12.8 hereof, there are no brokers or finders
entitled to compensation in connection with the sale of the Shares, and shall
indemnify each other for any such fees for which they are responsible.
SECTION 12. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be sent by confirmed
facsimile or mailed by first-class registered or certified airmail, or
nationally recognized overnight express courier, postage prepaid, and shall be
deemed given when so sent in the case of facsimile transmission, or when so
received in the case of mail or courier, and addressed as follows:
(a) if to the Company, to:
Cytel Corporation
0000 Xxxx Xxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: President and Chief Executive Officer
with a copy so mailed to:
Xxxxxx Godward LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxx, Esq.
or to such other person at such other place as the Company shall designate to
the Purchasers in writing; and
(b) if to the Purchaser, at the address as set forth at the
end of this Agreement, or at such other address or addresses as may have been
furnished to the Company in writing.
SECTION 13. MISCELLANEOUS.
13.1 WAIVERS AND AMENDMENTS. Neither this Agreement nor any provision
hereof may be changed, waived, discharged, terminated, modified or amended
except upon the written consent of the Company and the Purchaser.
13
13.2 HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.
13.3 SEVERABILITY. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
13.4 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California as applied to contracts
entered into and performed entirely in California by California residents,
without regard to conflicts of law principles.
13.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
13.6 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
13.7 ENTIRE AGREEMENT. This Agreement and other documents delivered
pursuant hereto, including the exhibits, constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
13.8 PAYMENT OF FEES AND EXPENSES. Each of the Company and the
Purchaser shall bear its own expenses and legal fees incurred on its behalf with
respect to this Agreement and the transactions contemplated hereby (the
"Offering"); provided, that the Company shall reimburse the Placement Agent for
certain fees and expenses incurred by the Placement Agent in connection with the
Offering as described in the Memorandum. Purchasers acknowledge that the
Placement Agent will receive a commission in the amount described in the
Memorandum. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
CYTEL CORPORATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
PURCHASER
Purchaser Name:
--------------------
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Address:
---------------------------
---------------------------
---------------------------
Facsimile:
-------------------------
COMMON STOCK PURCHASE AGREEMENT
15
CYTEL CORPORATION
COMMON STOCK
PURCHASE AGREEMENT
NOVEMBER 7, 1997
16
TABLE OF CONTENTS
PAGE
Section 1. Authorization of Sale of the Securities..........................1
Section 2. Agreement to Sell and Purchase the Shares........................1
2.1 Sale of Shares.............................................1
2.2 Separate Agreements........................................1
2.3 Acceptance of Proposed Purchase of Shares..................1
Section 3. Closing and Delivery.............................................2
3.1 Closing....................................................2
3.2 Delivery of the Shares at the Closing......................2
Section 4. Representations, Warranties and Covenants of the Company.........2
4.1 Organization and Standing..................................2
4.2 Corporate Power; Authorization.............................2
4.3 Issuance and Delivery of the Shares........................3
4.4 Confidential Offering Memorandum; SEC Documents;
Financial Statements.......................................3
4.5 Intellectual Property......................................3
4.6 Capitalization.............................................4
4.7 Litigation.................................................4
4.8 Governmental Consents......................................4
4.9 No Material Adverse Change.................................4
Section 5. Representations, Warranties and Covenants of the Purchaser.......4
Section 6. Survival of Representations, Warranties and Agreements...........6
Section 7. Conditions to Company's Obligations at The Closing...............6
7.1 Receipt of Payment.........................................6
7.2 Representations and Warranties Correct.....................6
Section 8. Conditions to Purchasers' Obligations At The Closing.............6
8.1 Representations and Warranties Correct.....................6
8.2 Legal Opinion..............................................7
8.3 No General Solicitation; Blue Sky..........................7
Section 9. Registration of the Shares; Compliance with the Securities Act...7
9.1 Registration Procedures and Expenses.......................7
9.2 Transfer of Securities After Registration..................8
9.3 Legends....................................................9
9.4 Indemnification............................................9
9.5 Termination of Conditions and Obligations.................11
9.6 Information Available.....................................11
9.7 Changes in Purchaser Information..........................11
Section 10. Market Stand Off...............................................11
Section 11. Broker's Fee...................................................12
i.
17
TABLE OF CONTENTS
(CONTINUED)
Section 12. Notices........................................................12
Section 13. Miscellaneous..................................................12
13.1 Waivers and Amendments....................................12
13.2 Headings..................................................13
13.3 Severability..............................................13
13.4 Governing Law.............................................13
13.5 Counterparts..............................................13
13.6 Successors and Assigns....................................13
13.7 Entire Agreement..........................................13
13.8 Payment of Fees and Expenses..............................13
ii.
18
EXHIBIT A
SCHEDULE OF EXCEPTIONS
None.
19
EXHIBIT B
FORM OF OPINION OF COUNSEL
1. The Company has been duly incorporated and is validly existing in good
standing under the laws of the State of Delaware. The Company is in
good standing in the State of California. The Company has the requisite
corporate power to own or lease its property and assets and to conduct
its business as currently conducted as described in the Memorandum.
2. The Purchase Agreement has been duly authorized by all necessary
corporate action on the part of the Company and has been duly executed
and delivered on behalf of the Company and constitutes a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms except (i) as limited by applicable
bankruptcy, insolvency, reorganization, arrangement, moratorium and
other laws of general applicability relating to or affecting creditors'
rights, (ii) as limited by equitable principles generally, whether such
enforceability is considered in a proceeding in equity or at law, and
(iii) as to those provisions of Section 9.3 relating to indemnity or
contribution.
3. The Company's authorized capital stock consists of (a) fifty million
(50,000,000) shares of Common Stock, $.01 par value, of which [twenty
seven million two hundred fourteen eight hundred eighty six
(27,214,886)] shares are issued and outstanding, and (b) ten million
(10,000,000) shares of Preferred Stock, $.01 par value, of five hundred
thousand (500,000) shares are designated Series A Junior Participating
Preferred Stock, no shares of which are issued and outstanding.
3. The Shares have been duly authorized and when issued, delivered and
paid for in accordance with the terms of the Agreement, will be validly
issued, fully paid and nonassessable.
4. The execution and delivery of the Agreement and the consummation of the
sale of the Shares by the Company as contemplated therein do not
violate any provisions of the Company's Certificate of Incorporation or
Bylaws, and do not violate or contravene (a) any law applicable to the
Company and known to us or (b) any order, writ, judgment, injunction,
decree, determination or award applicable to the Company and known to
us.
5. Except as set forth in the Memorandum, to our knowledge there is no
action proceeding or investigation pending or threatened in writing
against the Company which could reasonably be anticipated to result,
either individually or in the
20
aggregate, in any material adverse change in the assets, financial
condition or operations of the Company.
6. The offer and sale of the Shares by the Company to the Purchasers is
exempt from the registration requirements of the Securities Act of
1933, as amended.
7. All consents, approvals, authorizations, or orders of, and filings,
registrations and qualifications with any regulatory authority or
governmental body in the United States required for the issuance by the
Company of the Shares as contemplated by the Agreement, have been made
or obtained (except such as may be required under state securities and
blue sky laws for which we express no opinion).
21
CYTEL CORPORATION
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement,
please provide us with the following information:
1. Please state your or your organization's name exactly as it should
appear in the Registration Statement:
2. Please provide the following information, as of November 7, 1997:
Number of Shares that you are Number of shares of Common
purchasing and seek to include in Stock that you already beneficially
the Registration Statement: own or that you are purchasing and
do NOT seek to include in the
__________________ Registration Statement:
_______________________
3. Have you or your organization had any position, office or other
material relationship within the past three years with the Company or its
affiliates other than as disclosed in the Proxy Statement in connection with the
Company's 1997 Annual Meeting of Stockholders?
Yes __ No __
If yes, please indicate the nature of any such relationships: _________
________________________________________________________________________________
Signature:
-------------------------
Print Name:
------------------------
Title:
-----------------------------
22
APPENDIX I
PURCHASER'S CERTIFICATE OF RESALE OF THE SHARES
The undersigned, an officer of, or other person duly authorized by
____________________________________________________ hereby certifies that
[fill in official name of individual or institution]
he/she [said institution] is the Purchaser of the Shares evidenced by the
attached stock certificate(s) and as such, sold such Shares
on ____________________________________ in accordance with registration
[date]
statement number _______________________________________________________ and the
[fill in the number of or otherwise identify
registration statement]
requirement of delivering a current prospectus and current annual, quarterly and
reports
(Forms 10-K, 10-Q, and 8-K) by the Company has been complied with in connection
with such sale.
Print or Type:
Name of Purchaser (Individual or Institution):
-----------------------------
Name of Individual representing Purchaser
(if an Institution):
-------------------------------------------------------
Title of Individual representing Purchaser
(if an Institution):
-------------------------------------------------------
Signature by:
Individual Purchaser or Individual
representing Purchaser:
----------------------------------------------------
