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ENZON, INC.
COMMON STOCK PURCHASE AGREEMENT
June 25, 1998
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TABLE OF CONTENTS
Page
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Section 1
Authorization and Sale of Common Stock ......................... 1
1.1 Authorization ...................................................... 1
1.2 Sale of Common ..................................................... 1
Section 2
Closing Date: Delivery ......................................... 1
2.1 Closing Date ....................................................... 1
2.2 Delivery ........................................................... 1
Section 3
Representations and Warranties of the Company .................. 2
3.1 Organization and Standing .......................................... 2
3.2 Corporate Power, Authorization ..................................... 2
3.3 Issuance and Delivery of the Shares ................................ 2
3.4 Private Placement Offering Memorandum: SEC Documents, Financial
Statements ......................................................... 2
3.5 Governmental Consents .............................................. 3
3.6 No Material Adverse Change ......................................... 3
3.7 Intellectual Property .............................................. 3
3.8 Authorized Capital Stock ........................................... 4
3.9 Litigation ......................................................... 4
3.10 Use of Proceeds .................................................... 4
3.11 Accountants ........................................................ 4
3.12 Compliance With Other Instruments .................................. 5
3.13 Permits ............................................................ 5
3.14 Investment Company ................................................. 5
3.15 Offering Materials ................................................. 5
Section 4
Representations, Warranties and Covenants of the Purchasers .... 5
4.1 Power; Authorization ............................................... 5
4.2 Investment Experience .............................................. 6
4.3 Investment Intent .................................................. 6
4.4 Registration or Exemption Requirements ............................. 6
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TABLE OF CONTENTS
(continued)
Section 5
Conditions to Closing of Purchasers ............................ 6
5.1 Representations and Warranties ..................................... 7
5.2 Covenants .......................................................... 7
5.3 Blue Sky ........................................................... 7
5.4 Legal Opinion ...................................................... 7
5.5 Patent Opinion ..................................................... 7
5.6 Registration Statement ............................................. 7
5.7 Nasdaq Qualification ............................................... 7
Section 6
Conditions to Closing of Company ............................... 7
6.1 Representations and Warranties ..................................... 8
6.2 Covenants .......................................................... 8
6.3 Blue Sky ........................................................... 8
6.4 Registration Statement ............................................. 8
6.5 Nasdaq Qualification ............................................... 8
Section 7
Affirmative Covenants of the Company ........................... 8
7.1 Financial Information .............................................. 8
7.2 Registration Requirements .......................................... 8
7.3 Indemnification and Contribution ................................... 10
Section 8
Restrictions on Transferability of Shares:
Compliance with Securities Act ................................. 12
8.1 Restrictions on Transferability .................................... 13
8.2 Restrictive Legend ................................................. 13
8.3 Transfer of Shares After Registration .............................. 13
8.4 Purchaser Information .............................................. 13
Section 9
Miscellaneous .................................................. 14
9.1 Waivers and Amendments ............................................. 14
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TABLE OF CONTENTS
(continued)
9.2 Placement Agent Fee ................................................ 14
9.3 Governing Law ...................................................... 14
9.4 Survival ........................................................... 14
9.5 Successors and Assigns ............................................. 14
9.6 Entire Agreement ................................................... 14
9.7 Notices, etc ....................................................... 14
9.8 Severability of this Agreement ..................................... 15
9.9 Counterparts ....................................................... 15
9.10 Further Assurances ................................................. 15
9.11 Termination ........................................................ 15
9.12 Expenses ........................................................... 15
9.13 Currency ........................................................... 15
Exhibit A - Schedule of Purchasers
Exhibit B - Form of Purchaser's Questionnaire
Exhibit C - Opinion of Company Counsel
Exhibit D - Opinions of Patent Counsel
Exhibit E - Form of Purchaser's Legend Removal Certificate
Exhibit F - Form of Purchaser's Certificate of Subsequent Sale
Exhibit G - Description of Capital Stock
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ENZON, INC.
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (the "Agreement") is made as of June
25, 1998, by and among Enzon, Inc., a Delaware corporation (the "Company"), with
its principal office at 00 Xxxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx, and the
persons listed on the Schedule of Investors attached hereto as Exhibit A (the
"Purchasers").
Section 1
Authorization and Sale of Common Stock
1.1 Authorization. The Company has authorized the sale and issuance of
3,985,000 shares of its Common Stock, $0.01 par value per share (the "Common
Stock") pursuant to this Agreement (the "Shares").
1.2 Sale of Common. Subject to the terms and conditions of this Agreement,
the Company agrees to issue and sell to each Purchaser and each Purchaser
severally agrees to purchase from the Company the number of Shares set forth
opposite such Purchaser's name on Exhibit A for $4.75 per share.
Section 2
Closing Date: Delivery
2.1 Closing Date. The closing of the purchase and sale of the Shares
hereunder (the "Closing") shall be held at the offices of Xxxxxx & Xxxxxxx LLP,
000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, at or before 10:00 a.m. New York Time, on
that date that is two business days after the date on which the Registration
Statement (as defined herein) is declared effective or at such time and place
upon which the Company and SBC Warburg Dillon Read Inc. (the "Placement Agent")
shall agree. The date of the Closing is hereinafter referred to as the "Closing
Date."
2.2 Delivery. At the Closing, the Company will deliver to each Purchaser a
certificate, registered in the Purchaser's name as shown on Exhibit A,
representing the number of Shares to be purchased by the Purchaser. Such
delivery shall be against payment of the purchase price therefor by wire
transfer to the Company's bank account in the amount set forth on Exhibit A.
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Section 3
Representations and Warranties of the Company
The Company represents and warrants to the Purchasers as of the Closing
Date as follows:
3.1 Organization and Standing. The Company is a corporation duly organized
and validly existing under, and by virtue of, the laws of the State of Delaware
and is in good standing as a domestic corporation under the laws of said state
and has all requisite corporate power and authority to conduct its business as
currently conducted and disclosed in the Offering Memorandum (as defined below).
3.2 Corporate Power, Authorization. The Company has all requisite legal and
corporate power and has taken all requisite corporate action to execute and
deliver this Agreement, to sell and issue the Shares and to 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 or similar laws relating to or affecting the
enforcement of creditors' rights generally and (ii) as limited by equitable
principles generally. 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
or any state or federal order, judgment or decree or any indenture, mortgage,
lease or other agreement or instrument to which the Company or any of its
properties is subject.
3.3 Issuance and Delivery of the Shares. The Shares, when issued in
compliance with the provisions of this Agreement, will be validly issued, fully
paid and nonassessable. The issuance and delivery of the Shares is not subject
to preemptive or any other similar rights of the stockholders of the Company or
any liens or encumbrances.
3.4 Private Placement Offering Memorandum: SEC Documents, Financial
Statements. Each complete or partial statement, report, or proxy statement
included within the Company's Private Placement Offering Memorandum dated June
4, 1998 (the "Offering Memorandum") is a true and complete copy of or excerpt
from such document as filed by the Company with the 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, all documents filed by the Company with the SEC (the
"SEC Documents") complied in all material respects with the requirements of the
Exchange Act or the
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Securities Act of 1933, as amended (the "Securities Act"), as applicable.
Neither the Offering 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 to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. As of their respective filing dates, the financial
statements of the Company included in the SEC Documents (the "Financial
Statements") complied as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto. The Financial Statements have been prepared in accordance
with generally accepted accounting principles consistently applied and fairly
present the consolidated financial position of the Company and any subsidiaries
at the dates thereof and the consolidated results of their operations and
consolidated cash flows for the periods then ended; provided, however, that the
unaudited Financial Statements are subject to normal recurring year-end
adjustments (which in any case will not be material) and do not contain all
footnotes required under generally accepted accounting principles.
3.5 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 in which Shares are offered and/or sold, (b) the filing of the
Registration Statement and all amendments thereto with the SEC as contemplated
by Section 7.2 of this Agreement and (c) all required filings with The Nasdaq
Stock Market necessary for the listing of the Shares.
3.6 No Material Adverse Change. Except as otherwise disclosed in the
Offering Memorandum, since March 31, 1998, there have not been any changes in
the assets, liabilities, financial condition or operations of the Company from
those reflected in the Financial Statements, except changes in the ordinary
course of business which have not been, either individually or in the aggregate,
materially adverse.
3.7 Intellectual Property. Except as disclosed in the Offering Memorandum,
the Company owns or possesses sufficient rights to use all existing patents,
patent rights, inventions, trade secrets, know-how, proprietary rights and
processes that are necessary for the conduct and proposed conduct of its
business as described in the Offering Memorandum (the "Company's Proprietary
Rights") without any conflict with or infringement of the rights of others which
would result in a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company.
The Company believes that there are no third parties who have or will be able to
establish rights to any of the Company's Proprietary Rights, except for (i) the
ownership rights of the third party licensors to the Company's Proprietary
Rights which are licensed to the Company by such third party licensors and (ii)
the third party licensees of the Company's Proprietary Rights. Except as
disclosed in the Offering Memorandum, to the knowledge of the Company, there is
no infringement by any third parties of any of the Company's Proprietary Rights.
Except as disclosed in the Offering Memorandum, the Company has not received any
notice of, and has
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no knowledge of any basis for, any infringement of or conflict with asserted
rights of others with respect to any patent, patent right, invention, trade
secret, know-how or other proprietary rights that, individually or in the
aggregate, would have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company.
3.8 Authorized Capital Stock. All outstanding shares of capital stock of
the Company 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, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities, and the
authorized and outstanding capital stock of the Company conforms, as of the
dates for which such information is given, in all material respects to the
statements relating thereto contained in Exhibit G hereto; there is no capital
stock outstanding as of such dates other than as described in Exhibit G hereto;
and all issued and outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable. Except
as disclosed in or contemplated by the Offering Memorandum and the Financial
Statements and the related notes thereto included in the Offering Memorandum or
in Exhibit G hereto, the Company does not have outstanding any 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 its capital stock or any such options,
rights, convertible securities or obligations. Except as described in Exhibit G
hereto, no stockholder of the Company, other than the Purchasers, has any right
(which has not been waived or has not expired by reason of lapse of time
following notification of the Company's intent to file the Registration
Statement) to require the Company to register the sale of any shares owned by
such stockholder under the Securities Act in the Registration Statement.
3.9 Litigation. Except as set forth in the Offering Memorandum, there are
no actions, suits, proceedings or investigations pending or, to the best of the
Company's knowledge, threatened against the Company or any of its properties
before or by any court or arbitrator or any governmental body, agency or
official in which there is the possibility of an adverse decision that (a) would
reasonably be expected to have a material adverse effect on the Company's
properties or assets or the business of the Company as presently conducted or
proposed to be conducted or (b) would reasonably be expected to impair the
ability of the Company to perform its obligations under this Agreement.
3.10 Use of Proceeds. The Company will apply the net proceeds from the sale
of the Shares in the manner set forth under the caption "Use of Proceeds" in the
Offering Memorandum.
3.11 Accountants. KPMG Peat Marwick LLP, who have expressed their opinion
with respect to the audited financial statements and schedules to be filed with
the SEC as a part of the Registration Statement and included in the Registration
Statement and the Prospectus which forms a part thereof, are independent
accountants as required by the Securities Act and the rules and regulations
promulgated thereunder (the "Rules and Regulations").
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3.12 Compliance With Other Instruments. Except as to defaults, violations
and breaches which individually or in the aggregate would not be material to the
Company, the Company is not in violation or default of any provision of its
Articles of Incorporation or Bylaws, each as amended to date, or of any
agreement, license, permit, instrument, judgment, order, writ or decree to which
it is a party or by which it is bound, or, to the best of its knowledge, of any
provision of any federal or state statute, rule or regulation applicable to the
Company.
3.13 Permits. The Company has all franchises, permits, licenses, and any
similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could materially and adversely affect the
business, properties, prospects, or financial condition of the Company. The
Company is not in default in any material respect under any of such franchises,
permits, licenses, or other similar authority.
3.14 Investment Company. The Company is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
3.15 Offering Materials. The Company has not distributed and will not
distribute prior to the Closing Date any offering material in connection with
the offering and sale of the Shares other than the Offering Memorandum.
Section 4
Representations, Warranties and Covenants of the Purchasers
Each Purchaser hereby severally represents and warrants to the Company,
effective as of the Closing Date, as follows:
4.1 Power; Authorization. (i) Such Purchaser has all requisite legal and
corporate or other power and capacity and has taken all requisite corporate or
other action to execute and deliver this Agreement, to purchase the Shares to be
purchased by it and to carry out and perform all of its obligations under this
Agreement; and (ii) this Agreement constitutes the legal, valid and binding
obligation of such Purchaser, enforceable in accordance with its terms, except
(a) as limited by applicable bankruptcy, insolvency, reorganization, or similar
laws relating to or affecting the enforcement of creditors' rights generally and
(b) as limited by equitable principles generally.
4.2 Investment Experience. Such Purchaser is an "accredited investor" as
defined in Rule 501(a) under the Securities Act. Such Purchaser has received and
reviewed the Offering Memorandum, is aware of the Company's business affairs and
financial condition and has had access to and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision to
acquire the Shares. Purchaser has such business and financial experience as is
required to permit it to protect its own interests in connection with the
purchase of the Shares.
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4.3 Investment Intent. Such Purchaser is purchasing the Shares in the
ordinary course of its business for its own account as principal, for investment
purposes only, and not with a present view to, or for, the resale distribution
thereof, in whole or in part, within the meaning of the Securities Act or any
state securities laws. Purchaser understands that its acquisition of the Shares
has not been registered under the Securities Act or registered or qualified
under any state law in reliance on specific exemptions therefrom, which
exemptions may depend upon, among other things, the bona fide nature of such
Purchaser's investment intent as expressed herein. Such Purchaser has completed
or caused to be completed the Purchaser Questionnaire attached hereto as Exhibit
B for use in preparation of the Registration Statement (as defined below), and
the responses provided therein shall be true and correct as of the effective
date of the Registration Statement and as of the Closing Date. Purchaser has, in
connection with its decision to purchase the number of Shares set forth in
Exhibit A hereto, relied solely upon the Offering Memorandum and the documents
attached as appendices thereto and the representations and warranties of the
Company contained herein. Such 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 Shares except
in compliance with the Securities Act, and the rules and regulations promulgated
thereunder and applicable state securities laws.
4.4 Registration or Exemption Requirements. Such Purchaser further
acknowledges, understands and agrees that the Shares may not be resold or
otherwise transferred except in a transaction registered under the Securities
Act or unless an exemption from such registration is available. Such Purchaser
understands that the certificate(s) evidencing the Shares will be imprinted with
a legend that prohibits the transfer of the Shares unless (i) they are
registered or such registration is not required, and (ii) if the transfer is
pursuant to an exemption from registration other than Rule 144 under the
Securities Act and, if the Company shall so request in writing, an opinion of
counsel reasonably satisfactory to the Company is obtained to the effect that
the transaction is so exempt.
Section 5
Conditions to Closing of Purchasers
Each Purchaser's obligation to purchase the Shares at the Closing is, at
the option of such Purchaser, subject to the fulfillment or waiver as of the
Closing Date of the following conditions:
5.1 Representations and Warranties. The representations and warranties made
by the Company in Section 3 hereof shall be true and correct in all material
respects when made, and shall be true and correct in all material respects on
the Closing Date with the same force and effect as if they had been made on and
as of said date.
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5.2 Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the Closing Date shall
have been performed or complied with in all respects.
5.3 Blue Sky. The Company shall have obtained all necessary blue sky law
permits and qualifications, or secured exemptions therefrom, required by any
state or foreign or other jurisdiction for the offer and sale of the Shares.
5.4 Legal Opinion. The Purchasers shall have received a legal opinion of
Xxxxxx & Xxxxxxx LLP, counsel to the Company, with respect to the matters set
forth on Exhibit C.
5.5 Patent Opinion. The Purchasers shall have received legal opinions of
patent counsel to the Company with respect to the matters set forth on Exhibit
D.
5.6 Registration Statement. The Registration Statement (as defined below)
registering the resale of the Shares by the Purchasers shall have been filed
with and declared effective by the SEC, and no stop order suspending the
effectiveness thereof and no proceedings therefor shall be pending or threatened
by the SEC.
5.7 Nasdaq Qualification. The Shares shall be duly authorized for listing
by the Nasdaq Stock Market.
Section 6
Conditions to Closing of Company
The Company's obligation to sell and issue the Shares at the Closing is, at
the option of the Company, subject to the fulfillment or waiver of the following
conditions:
6.1 Representations and Warranties. The representations made by the
Purchasers in Section 4 hereof shall be true and correct in all material
respects when made, and shall be true and correct in all material respects on
the Closing Date with the same force and effect as if they had been made on and
as of such date.
6.2 Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchasers on or prior to the Closing Date
shall have been performed or complied with in all material respects.
6.3 Blue Sky. The Company shall have obtained all necessary blue sky law
permits and qualifications, or secured exemptions therefrom, required by any
state for the offer and sale of the Shares.
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6.4 Registration Statement. The Registration Statement (as defined below)
registering the resale of the Shares by the Purchasers shall have been filed
with and declared effective by the SEC, and no stop order suspending the
effectiveness thereof and no proceedings therefor shall be pending or threatened
by the SEC.
6.5 Nasdaq Qualification. The Shares shall be duly authorized for listing
by the Nasdaq Stock Market.
Section 7
Affirmative Covenants of the Company
The Company hereby covenants and agrees as follows:
7.1 Financial Information. The Company will mail the following reports to
each Purchaser until such Purchaser transfers, assigns or sells the Shares
purchased by such Purchaser pursuant to this Agreement:
(a) Within one hundred (100) days after the end of each fiscal year, a
copy of its Annual Report on Form 10-K.
(b) Within fifty-five (55) days after the end of the first, second and
third quarterly accounting periods of each fiscal year of the Company, a
copy of its Quarterly Report on Form 10-Q.
(c) Within ten (10) days after the Company files any Current Report on
Form 8-K with the SEC, such Current Report on Form 8-K
7.2 Registration Requirements.
(a) The Company shall use its best efforts to prepare and file a
registration statement with the SEC under the Securities Act to register
the resale of the Shares by the Purchasers (the "Registration Statement")
no later than ten (10) days after the date hereof.
(b) The Company shall pay all Registration Expenses (as defined below)
in connection with any registration, qualification or compliance hereunder,
and each Purchaser shall pay all Selling Expenses (as defined below) and
other expenses that are not Registration Expenses relating to the Shares
resold by such Purchaser. Registration Expenses shall mean all expenses,
except for Selling Expenses, incurred by the Company in complying with the
registration provisions herein described, including, without limitation,
all registration, qualification and filing fees, printing expenses, escrow
fees, fees and disbursements of counsel for the Company, blue sky fees and
expenses, and the expense of any special audits incident to or required by
any such registration. Selling Expenses shall mean all selling commissions,
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underwriting fees and stock transfer taxes applicable to the Shares and all
fees and disbursements of counsel for any Purchaser.
(c) In the case of the registration effected by the Company pursuant
to these registration provisions, the Company will use its reasonable best
efforts to: (i) cause the Registration Statement to become effective within
sixty (60) days of the date hereof, (ii) keep such registration effective
until the earlier of (a) the second anniversary of the Closing Date, (b)
such date as all of the Shares have been resold by the original Purchasers
thereof, or (c) such time as all of the Shares held by the Purchasers can
be sold within a given three-month period without compliance with the
registration requirements of the Securities Act pursuant to Rule 144 under
the Securities Act; (iii) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used in
connection with the Registration Statement as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition
of all securities covered by the Registration Statement; (iv) furnish such
number of prospectuses and other documents incident thereto, including any
amendment of or supplement to the prospectus, as a Purchaser from time to
time may reasonably request; (v) cause all Shares registered as described
herein to be listed on each securities exchange and quoted on each
quotation service on which similar securities issued by the Company are
then listed or quoted; (vi) provide a transfer agent and registrar for all
Shares registered pursuant to the Registration Statement and a CUSIP number
for all such Shares; (vii) otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC; and (viii) file the
documents required of the Company and otherwise use its best efforts to
maintain requisite blue sky clearance in (A) all jurisdictions in which any
of the Shares are originally sold and (B) all other states reasonably
specified in writing by a Purchaser, provided as to clause (B), however,
that in no event shall the Company be required to qualify to do business or
consent to service of process in any state in which it is not now so
qualified or has not so consented.
(d) The Company shall furnish to each Purchaser upon request a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary in order to facilitate the public sale or
other disposition of all or any of the Shares held by such Purchaser.
(e) 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 a
registration on Form S-3, the Company covenants and agrees to: (i) make and
keep public information available, as those terms are understood and
defined in Rule 144 under the Securities Act, 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 by the original Purchasers thereof; (ii) file
with the SEC in a timely manner all reports and other documents required of
the Company under the Securities Act and 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 Securities Act and the Exchange Act, (B)
a copy of the most recent annual or quarterly report of the Company, and
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(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 or pursuant to such Form S-3.
(f) At any time the Company may refuse to permit a Purchaser to resell
any Shares pursuant to the Registration Statement; provided, however, that
in order to exercise this right, the Company must deliver a certificate in
writing to the Purchasers and the Placement Agent to the effect that a
cessation of the ability to sell under, or a withdrawal of, such
Registration Statement is necessary because a sale pursuant to the
Registration Statement in its then-current form would constitute a
violation of the federal securities laws. In such an event, the Company
shall use its best efforts to promptly amend the Registration Statement if
necessary and take all other actions necessary to allow such sale under the
federal securities laws, and shall notify the Purchasers and the Placement
Agent promptly after it has determined that such sale has become
permissible under the federal securities laws. Notwithstanding the
foregoing, the Company shall not under any circumstances be entitled to
exercise its right to withdraw the registration statement more then one (1)
time in any twelve (12) month period, and the period during which such
Registration Statement may be withdrawn shall not exceed sixty (60) days.
Each Purchaser hereby covenants and agrees that it will not sell any Shares
pursuant to the Registration Statement during the periods the Registration
Statement is withdrawn or the ability to sell thereunder is suspended as
set forth in this Section 7.2(f).
7.3 Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Purchaser
from and against any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) to which such Purchaser may become subject
(under the Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise
out of or are based upon, any untrue statement of a material fact contained
in the Registration Statement, on the effective date thereof, or arise out
of any failure by the Company to fulfill any undertaking included in the
Registration Statement, and the Company will, as incurred, reimburse such
Purchaser for any 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 in any
such case to the extent that such loss, claim, damage or liability arises
out of or is based upon (i) 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 Purchaser specifically for
use in preparation of the Registration Statement, (ii) the failure of such
Purchaser to comply with the covenants and agreements contained in Section
8.3 hereof, or (iii) any untrue statement in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Purchaser
prior to the pertinent sale or sales by the Purchaser.
(b) Each Purchaser, severally and not jointly, agrees to indemnify and
hold harmless the Company from and against any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) to which the
Company may become subject (under the
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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 (i) 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 Purchaser specifically for use in
preparation of the Registration Statement, provided, however, that no
Purchaser shall be liable in any such case for any untrue statement
included in any Prospectus which statement has been corrected, in writing,
by such Purchaser and delivered to the Company before the sale from which
such loss occurred, (ii) the failure of such Purchaser to comply with the
covenants and agreements contained in Section 8.3 hereof, or (iii) any
untrue statement in any prospectus that is corrected in any subsequent
Prospectus that was delivered to the Purchaser prior to the pertinent sale
or sales by the Purchaser, and each Purchaser, severally and not jointly,
will, as incurred, reimburse the Company for any legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any
such action, proceeding or claim.
(c) 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 7.3, 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 the indemnifying person shall have been notified
thereof, the indemnifying person shall be entitled to participate therein,
and, to the extent that it shall wish, to assume the defense thereof, with
counsel reasonably satisfactory to the indemnified person. After notice
from the indemnifying person to such indemnified person of the indemnifying
person's election to assume the defense thereof, the indemnifying person
shall not be liable to such indemnified person for any legal expenses
subsequently incurred by such indemnified person in connection with the
defense thereof, provided, however, that if there exists or shall exist a
conflict of interest that would make it inappropriate in the reasonable
judgment of 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.
(d) If the indemnification provided for in this Section 7.3 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion
as is appropriate to reflect the relative fault of the Company on the one
hand and the Purchasers on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or a
Purchaser on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
E-14
omission. The Company and the Purchasers agree that it would not be just
and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation (even if the Purchasers were treated as
one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as
a result of the losses, claim, damages, or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed
to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (d), no
Purchaser shall be required to contribute any amount in excess of the
amount by which the net amount received by the Purchaser from the sale of
the Shares to which such loss relates exceeds the amount of any damages
which such Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Purchasers' obligations in this subsection (d) to contribute are several in
proportion to their respective sales of Shares to which such loss relates
and not joint.
(e) The obligations of the Company and the Purchasers under this
Section 7.3 shall be in addition to any liability which the Company and the
respective Purchasers may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls the Company or
any Purchaser within the meaning of the Act.
Section 8
Restrictions on Transferability of Shares:
Compliance with Securities Act
8.1 Restrictions on Transferability. The Shares shall not be transferable
in the absence of a registration under the Securities Act or an exemption
therefrom or in the absence of compliance with any term of this Agreement. The
Company shall be entitled to give stop transfer instructions to its transfer
agent with respect to the Shares in order to enforce the foregoing restrictions.
8.2 Restrictive Legend. Each certificate representing Shares shall bear
substantially the following legends (in addition to any legends required under
applicable securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES
ONLY AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THE SHARES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM.
E-15
ADDITIONALLY THE TRANSFER OF THE SHARES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
CERTAIN RESTRICTIONS SPECIFIED IN THE COMMON
STOCK PURCHASE AGREEMENT DATED JUNE 25, 1998
BETWEEN THE COMPANY AND THE ORIGINAL
PURCHASER, AND NO TRANSFER OF SHARES SHALL BE
VALID OR EFFECTIVE ABSENT COMPLIANCE WITH
SUCH RESTRICTIONS. ALL SUBSEQUENT HOLDERS OF
THIS CERTIFICATE WILL HAVE AGREED TO BE BOUND
BY CERTAIN OF THE TERMS OF THE AGREEMENT,
INCLUDING SECTIONS 7.2 AND 8.3 OF THE
AGREEMENT. COPIES OF THE AGREEMENT MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE
BY THE REGISTERED HOLDER OF THIS CERTIFICATE
TO THE SECRETARY OF THE COMPANY.
The legend contained in this Section 8.2 may be removed from a certificate
either in accordance with Section 8.3 or immediately upon receipt by the
Transfer Agent of a certificate substantially in the form attached hereto as
Exhibit E.
8.3 Transfer of Shares After Registration. Each Purchaser hereby covenants
with the Company not to make any sale of the Shares except either (i) in
accordance with the Registration Statement, in which case Purchaser covenants to
comply with the requirement of delivering a current prospectus, or (ii) in
accordance with Rule 144, in which case Purchaser covenants to comply with Rule
144. Purchaser further acknowledges and agrees that such Shares are not
transferable on the books of the Company unless the certificate submitted to the
Company's transfer agent evidencing such Shares is accompanied by a separate
certificate executed by an officer of, or other person duly authorized by, the
Purchaser in the form attached hereto as Exhibit F.
8.4 Purchaser Information. Each Purchaser covenants that it will promptly
notify the Company of any changes in the information set forth in the
Registration Statement regarding such Purchaser or such Purchaser's "Plan of
Distribution."
Section 9
Miscellaneous
9.1 Waivers and Amendments. With the exception of Sections 7.1 and 7.2
hereof, the terms of this Agreement may be waived or amended with the written
consent of the Company and each Purchaser. With respect to Sections 7.1 and 7.2
hereof, with the written consent of the Company and the record holders of more
than fifty percent (50%) of the Shares then outstanding and held by Purchasers,
the terms of the Agreement may be waived or amended
E-16
and any such amendment or waiver shall be binding upon the Company and all
holders of Shares.
9.2 Placement Agent Fee. Each Purchaser acknowledges that the Company
intends to pay a fee to SBC Warburg Dillon Read Inc. and Evolution Capital in
respect of the sale of the Shares to the Purchaser. Each of the parties hereto
hereby represents that, on the basis of any actions and agreements by it, there
are no other brokers or finders entitled to compensation in connection with the
sale of the Shares to the Purchasers.
9.3 Governing Law. This Agreement shall be governed in all respects by and
construed in accordance with the laws of the State of New York without any
regard to conflicts of laws principles.
9.4 Survival. The representations, warranties, covenants and agreements
made in this Agreement shall survive any investigation made by the Company or
the Purchasers and the Closing.
9.5 Successors and Assigns. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties to this Agreement. Notwithstanding the foregoing,
no Purchaser shall assign this Agreement without the prior written consent of
the Company.
9.6 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
thereof.
9.7 Notices, etc. All notices and other communications required or
permitted under this Agreement shall be effective upon receipt and shall be in
writing and may be delivered in person, by telecopy, overnight delivery service
or registered or certified United States mail addressed to the Company or the
Purchasers, as the case may be, at their respective addresses set forth at the
beginning of this Agreement or on Exhibit A or at such other address as the
Company or the Purchasers shall have furnished to the other party in writing.
All notices and other communications shall be effective upon the earlier of
actual receipt thereof by the person to whom notice is directed or (i) in the
case of notices and communications sent by personal delivery or telecopy, one
business day after such notice or communication arrives at the applicable
address or was successfully sent to the applicable telecopy number, (ii) in the
case of notices and communications sent by overnight delivery service, at noon
(local time) on the second business day following the day such notice or
communication was sent, and (iii) in the case of notices and communications sent
by United States mail seven days after such notice or communication shall have
been deposited in the United States mail.
9.8 Severability of this Agreement. If any provision of this Agreement
shall be judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
E-17
9.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
9.10 Further Assurances. Each party to this Agreement 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 hereto 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.
9.11 Termination. In the event that the Closing shall not have occurred on
or before sixty (60) days from the date hereof, the Purchasers shall have the
option to terminate this Agreement at the close of business on such date, and in
the event that the Closing shall not have occurred on or before ninety (90) days
from the date hereof, this Agreement shall terminate at the close of business on
such date.
9.12 Expenses. The Company and each such Purchaser shall bear its own
expenses incurred on its behalf with respect to this Agreement and the
transactions contemplated hereby, including fees of legal counsel.
9.13 Currency. All references to "dollars" or "$" in this Agreement shall
be deemed to refer to United States dollars.
E-18
The foregoing agreement is hereby executed as of the date first above
written.
"COMPANY"
ENZON, INC.
a Delaware corporation
By:
------------------------------------------
Title:
---------------------------------------
"PURCHASERS"
THE DCF LIFE SCIENCES FUND, LTD.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
DCF PARTNERS, L.P.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
E-19
ARIES DOMESTIC FUND, L.P.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
THE ARIES TRUST
By:
------------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
XXXXXXXX HOLDINGS, N.V.
By:
------------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
E-20
ORACLE OFFSHORE LTD.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
ORACLE PARTNERS L.P.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
ORACLE INSTITUTIONAL PARTNERS
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
E-21
GSAM ORACLE FUND, INC.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
SBC WARBURG DILLON READ, INC.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
SBC WARBURG DILLON READ, INC.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
E-22
CACLUCEUS CAPITAL L.P.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
CACLUCEUS CAPITAL LTD.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
MERLIN BIOMED L.P.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
E-23
DEUTSCHE VERMOGEN SBILDUNGSGESELL
SCHAFT MBH
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
XXXXX X. XXXXXXXX
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
XXXXXXXX X. XXXXXX
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
E-24
NEW TECHNOLOGIES FUND
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
E-25
Exhibit A
to CSPA
Purchaser Shares Purchase Price
--------- ------ --------------
DCF Life Sciences Fund Ltd. 100,000 $ 475,000
DCF Partners, L.P. 953,000 $ 4,526,750
X/X XXX Xxxxxxx
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxx
Facsimile: (000) 000-0000
Oracle Partners, L.P. 315,789 $ 1,499,997.75
Oracle Institutional Partners, L.P. 78,496 $ 372,856
GSAM Oracle Fund, Inc. 168,721 $ 801,424.75
Haussmann Holdings, N.V 50,526 $ 239,998.50
Oracle Offshore Ltd. 18,046 $ 85,718.50
C/O Oracle Partners, L.P.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
SBC Warburg Dillon Read, Inc. 500,000 $ 2,375,000
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxx Del Medico
Facsimile: (000) 000-0000
Cacluceus Capital L.P. 105,000 $ 498,750
Cacluceus Capital Ltd. 220,000 $ 1,045,000
C/O Orbimed Advisors LLC
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxx X. Xxxxx
Facsimile: (000) 000-0000
Merlin BioMed LP 21,053 $ 100,001.75
Deutsche Vermogen 294,737 $ 1,400,000.75
Sbildungsgesell Shaft mbH
C/O Merlin Biomed
000 Xxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxxxx Xxxxxx
The Aries Trust 747,368 3,549,998
Aries Domestic Fund, L.P. 305,264 1,450,004
C/O Paramount Capital Asset
Management, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxx Xxxxx
Facsimile: (000) 000-0000
Xxxxx X. Xxxxxxxx 30,000 $ 142,500
Xxxxxxxx X. Xxxxxx 15,000 $ 71,250
C/O The Xxxxxx Group
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxx Xxxxxxxx
New Technologies Fund 60,000 $ 285,000
C/O Emerging Growth
Management Co.
Xxx Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxxxxxx
Facsimile: (000) 000-0000
---------- --------------
3,983,000 $18,919,250
========== ==============
E-26
Exhibit B
INSTRUCTION SHEET FOR PURCHASER
(to be read in conjunction with the entire
Common Stock Purchase Agreement)
A. Complete the following items in the Common Stock Purchase Agreement:
1. Provide the information regarding the Purchaser requested on the
signature page. The Agreement must be executed by an individual
authorized to bind the Purchaser.
2. Exhibit B-1 - Stock Certificate Questionnaire:
Provide the information requested by the Stock Certificate
Questionnaire;
3. Exhibit B-2 - Registration Statement Questionnaire:
Provide the information requested by the Registration Statement
Questionnaire.
4. Exhibit B-3 - Purchaser Certificate:
Provide the information requested by the Certificate for Individual
Purchasers or the Certificate for Corporate, Partnership, Trust,
Foundation and Joint Purchasers, as applicable.
5. Return the signed Purchase Agreement including the properly completed
Exhibit 4.2 to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Attn: Xxxxxxx Xxxxxxx, Esq.
B. Instructions regarding the transfer of funds for the purchase of Shares
will be telecopied to the Purchaser by the Placement Agent at a later date.
C. Upon the resale of the Shares by the Purchaser after the Registration
Statement covering the Shares is effective, as described in the Purchase
Agreement, the Purchaser:
(i) must deliver a current prospectus, and annual and quarterly
reports of the Company to the buyer (prospectuses, and annual and
quarterly reports may be obtained from the Company at the
Purchaser's request); and
(ii) must send a letter in the form of Exhibit D to the Company so
that the Shares may be properly transferred.
E-27
Exhibit B-1
ENZON, INC.
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 4.3 of the Agreement, please provide us
with the following information:
1. The exact name that the Shares are to be
registered in (this is the name that will
appear on the stock certificate(s)). You may
use a nominee name if appropriate: _____________________________
2. The relationship between the Purchaser of the
Shares and the Registered Holder listed in
response to item 1 above: _____________________________
3. The mailing address of the Registered Holder
listed in response to item 1 above: _____________________________
_____________________________
_____________________________
_____________________________
_____________________________
4. The Tax Identification Number of the
Registered Holder listed in response to item
1 above: _____________________________
E-28
Exhibit B-2
ENZON, INC.
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information regarding the Purchaser.
1. Please state your organization's name exactly as it should appear in the
Registration Statement:
2. 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 prospectus included in the Registration
Statement?
_____ Yes _____ No
If yes, please indicate the nature of any such relationship below:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
E-29
Exhibit B-3
ENZON, INC.
CERTIFICATE FOR INDIVIDUAL PURCHASERS
If the investor is an individual Purchaser (or married couple) the
Purchaser must complete, date and sign this Certificate.
CERTIFICATE
I certify that the representations and responses below are true and
accurate:
In order for the Company to offer and sell the Shares in conformance with
state and federal securities laws, the following information must be obtained
regarding your investor status. Please initial each category applicable to you
as an investor in the Company.
___ (1) A natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of his purchase exceeds $1,000,000;
___ (2) A natural person who had an individual income in excess of $200,000
in each of the two most recent years, or joint income with that person's spouse
in excess of $300,000, in each of those years, and has a reasonable expectation
of reaching the same income level in the current year;
___ (3) An executive officer or director of the Company.
Dated: __________________ ____________________________________________
Name(s) of Purchaser
____________________________________________
Signature
____________________________________________
Signature
E-30
Exhibit B-4
ENZON, INC.
CERTIFICATE FOR CORPORATE, PARTNERSHIP,
TRUST, FOUNDATION AND JOINT PURCHASERS
If the investor is a corporation, partnership, trust, pension plan,
foundation, joint purchaser (other than a married couple) or other entity, an
authorized officer, partner, or trustee must complete, date and sign this
Certificate.
CERTIFICATE
The undersigned certifies that the representations and responses below are
true and accurate:
(a) The investor has been duly formed and is validly existing and has full
power and authority to invest in the Company. The person signing on behalf of
the undersigned has the authority to execute and deliver the Common Stock
Purchase Agreement on behalf of the Purchaser and to take other actions with
respect thereto.
(b) Indicate the form of entity of the undersigned:
____ Limited Partnership
____ General Partnership
____ Corporation
____ Revocable Trust (identify each grantor and indicate under what
circumstances the trust is revocable by the grantor):
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
________. (Continue on a separate piece of paper, if necessary.)
____ Other type of Trust (indicate type of trust and, for trusts other
than pension trusts, name the grantors and beneficiaries):_______
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
________. (Continue on a separate piece of paper, if necessary.)
E-31
____ Other form of organization (indicate form of organization (____
_______________________________________________________________).
(c) Indicate the approximate date the undersigned entity was formed: ______
____________________.
(d) In order for the Company to offer and sell the Shares in conformance
with state and federal securities laws, the following information must be
obtained regarding your investor status. Please initial each category applicable
to you as an investor in the Company.
____ 1. A bank as defined in Section 3(a)(2) of the Securities Act, or
any savings and loan association or other institution as defined
in Section 3(a)(5)(A) of the Securities Act whether acting in its
individual or fiduciary capacity;
____ 2. A broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934;
____ 3. An insurance company as defined in Section 2(13) of the
Securities Act;
____ 4. An investment company registered under the Investment Company
Act of 1940 or a business development company as defined in
Section 2(a)(48) of that Act;
____ 5. A Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958;
____ 6. A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such
plan has total assets in excess of $5,000,000;
____ 7. An employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment
decision is made by a plan fiduciary, as defined in Section 3(21)
of such Act, which is either a bank, savings and loan
association, insurance company, or registered investment advisor,
or if the employee benefit plan has total assets in excess of
$5,000,000 or, if a self-directed plan, with investment decisions
made solely by persons that are accredited investors;
____ 8. A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
E-32
____ 9. An organization described in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business
trust, or partnership, not formed for the specific purpose of
acquiring the Shares, with total assets in excess of $5,000,000;
____ 10. A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Shares, whose
purchase is directed by a sophisticated person as described in
Rule 506(b)(2)(ii) of the Exchange Act;
____ 11. An entity in which all of the equity owners qualify under any
of the above subparagraphs. If the undersigned belongs to this
investor category only, list the equity owners of the
undersigned, and the investor category which each such equity
owner satisfies:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
________________________________________________________________.
(Continue on a separate piece of paper, if necessary.)
Dated: _________________________, 19__
______________________________________
Name of investor
_____________________________________________________________
Signature and title of authorized officer, partner or trustee
E-33
Exhibit C
Opinion of Company Counsel
E-34
EXHIBIT C
DRAFT
[Closing Date], 1998
[ ]
Re: Enzon, Inc. - Sale of Common Stock
Ladies and Gentlemen:
We have acted as counsel to Enzon, Inc. (the "Company") in connection with
the sale by the Company of shares of common stock of the Company (the "Shares")
pursuant to the Common Stock Purchase Agreement (the "Purchase Agreement"),
dated as of June [ ], 1998, by and between the Company and the investors listed
on Schedule A thereto (the "Purchasers"). This opinion is being delivered
pursuant to Section 5.4 of the Purchase Agreement. All capitalized terms used
herein and not defined herein have the meanings assigned to such terms in the
Purchase Agreement.
We have examined such documents and have reviewed such questions of law as
we have considered necessary and appropriate for the purposes of our opinions
set forth below.
In rendering our opinions set forth below, we have assumed the authenticity
of all documents submitted to us as originals, the genuineness of all signatures
and the conformity to authentic originals of all documents submitted to us as
copies. We have also assumed the legal capacity for all purposes relevant hereto
of all natural persons and, with respect to all parties to agreements or
instruments relevant hereto other than the Company, that such parties had the
requisite power and authority (corporate or otherwise) to execute, deliver and
perform such agreements or instruments, that such agreements or instruments have
been duly authorized by all requisite action (corporate or otherwise) on the
part of such parties and have been duly executed and delivered by such parties
and that such agreements or instruments are the valid, binding and enforceable
obligations of such parties. As to questions of fact material to our opinions,
we have relied upon the representations made in the Purchase Agreement and upon
certificates of officers of the Company and of public officials (including,
without limitation, those certificates delivered to others at the Closing).
E-35
Our opinions expressed below as to certain factual matters are qualified as
being limited "to our knowledge" or by other words to the same or similar
effect. Such words, as used herein, mean the information known to the attorneys
in the firm who have principally represented the Company in connection with the
transactions contemplated by the Purchase Agreement. In rendering such opinions,
we have not conducted any independent investigation or consulted with other
attorneys in our firm with respect to the matters covered thereby. No inference
as to our knowledge with respect to such matters should be drawn from the fact
of our representation of the Company.
Based on the foregoing, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware.
2. The Company has the corporate power and authority to enter into the
Purchase Agreement and to issue, sell and deliver to the Purchasers the Shares
to be issued and sold by it thereunder.
3. 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 by the Company.
4. The performance by the Company of the Purchase Agreement and the
consummation by the Company of the transactions therein contemplated will not
(a) violate any provision of the Company's charter or bylaws or any applicable
statute, rule or regulation, or (b) result in the material breach or violation
of any of the terms and provisions, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement, bond, debenture, note
agreement or other evidence of indebtedness, or any lease, contract or other
agreement or instrument known to us to which the Company is a party or by which
its properties are bound, or, to our knowledge, any order, writ or decree of any
court or governmental agency or body having jurisdiction over the Company, or
over any of its properties or operations; provided, however, that we express no
opinion herein regarding state or foreign securities or Blue Sky laws.
5. The Purchase Agreement constitutes a valid and binding obligation of the
Company, enforceable against the Company according to its terms.
E-36
6. The Shares to be issued by the Company pursuant to the terms of the
Purchase Agreement will be, upon issuance and delivery against payment therefor
in accordance with the terms thereof, duly authorized and validly issued and
fully paid and nonassessable, and the stockholders of the Company have no
preemptive or other rights to purchase any of the Shares.
The opinions set forth above are subject to the following qualifications
and exceptions:
(a) Our opinions are subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar law of
general application affecting creditors' or secured creditors' rights,
including (without limitation) applicable fraudulent transfer laws.
(b) Our opinions are subject to the effect of general principles of
equity, including (without limitation) concepts of materiality,
reasonableness, good faith and fair dealing, and other similar doctrines
affecting the enforceability of agreements generally (regardless of whether
considered in a proceeding in equity or at law).
(c) Our opinions are subject to possible judicial action giving effect
to governmental actions or foreign laws affecting creditors' rights.
(d) Our opinions, insofar as they relate to indemnification
provisions, are subject to the effect of federal and state securities laws
and public policy relating thereto.
Our opinions expressed above are limited to the law of the State of New
York, the Delaware General Corporation Law, and the federal laws of the United
States of America.
The foregoing opinions are being furnished to you solely for your benefit
and may not be relied upon by, nor may copies be delivered to, any other person
without our prior written consent.
Very truly yours,
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Exhibit D
OPINIONS OF PATENT COUNSEL
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Exhibit E
PURCHASER'S LEGEND REMOVAL CERTIFICATE
To: [Transfer agent name and address]
Attention: ______________
The undersigned, the Purchaser or an officer of, or other person duly
authorized by the Purchaser, hereby certifies that _____________________________
(fill in name of Purchaser)
institution was the Purchaser of the Shares evidenced by the attached
certificate, and in order to induce the Company to remove the legends contained
on the certificates representing the Common Stock purchased by such Purchaser,
Purchaser will sell such Shares (i) in accordance with the registration
statement, file number in which case the Purchaser will satisfy the requirement
of delivering a current prospectus in connection with such sale, or (ii) in
accordance with Rule 144 under the Securities Act of 1933 ("Rule 144"), in which
case the Purchaser certifies that it has complied with or will comply with the
requirements of Rule 144. Print or type:
Name of Purchaser: _______________________________________________________
Name of Individual
representing
Purchaser (if an
Institution): _______________________________________________________
Title of Individual
representing
Purchaser (if an
Institution): _______________________________________________________
Signature by:
Purchaser or
Individual representing
Purchaser: _______________________________________________________
E-39
Exhibit F
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
To: [Transfer agent name and address]
Attention: _____________
The undersigned, the Purchaser or an officer of, or other person duly
authorized by the Purchaser, hereby certifies that _____________________________
(fill in name of Purchaser)
institution was the Purchaser of the Shares evidenced by the attached
certificate, and as such, proposes to transfer such Shares on or about
______________________ either (i) in accordance with the registration statement,
(date)
file number _____________, in which case the Purchaser certifies that the
requirement of delivering a current prospectus has been complied with or will be
complied with in connection with such sale, or (ii) in accordance with Rule 144
under the Securities Act of 1933 ("Rule 144"), in which case the Purchaser
certifies that it has complied with or will comply with the requirements of Rule
144.
Print or type:
Name of Purchaser: ___________________________________________________
Name of Individual
representing
Purchaser (if an
Institution): ___________________________________________________
Title of Individual
representing
Purchaser (if an
Institution): ___________________________________________________
Signature by:
E-40
Exhibit G
DESCRIPTION OF CAPITAL STOCK
E-41
EXHIBIT G
Description of Capital Stock
Under its Certificate of Incorporation, the Company is authorized to issue
60,000,000 shares of Common Stock, par value $.01 per share, and 3,000,000
shares of preferred stock, par value $.01 per share. As of May 29, 1998, there
were 31,331,081 shares of Common Stock, and 108,000 shares of preferred stock
designated as Series A Preferred Stock, outstanding. Other than the Series A
Preferred Stock, there are no other classes of preferred stock designated and no
other shares of preferred stock outstanding. Holders of shares of Common Stock
and Series A Preferred Stock are entitled to one vote per share on matters to be
voted upon by the stockholders of the Company. There are no cumulative voting
rights and, accordingly, the holders of a majority of the combined Common Stock
and Series A Preferred Stock may elect all of the directors. The Common Stock
and the Series A Preferred Stock shall be voted as one class, except (i) with
respect to any action amending or repealing any of the powers, designations,
preferences and rights of the Series A Preferred Stock, which requires the
affirmative vote of holders of not less than two-thirds of the then outstanding
Series A Preferred Stock and (ii) with respect to any action increasing or
decreasing the authorized shares or the par value of the Common Stock or
preferred stock or altering or changing adversely the powers, preferences, or
special rights of such shares, which pursuant to Section 242 of the Delaware
General Corporation Law requires the affirmative vote of a majority of the
outstanding shares of the class so being affected, voting as a class and the
affirmative vote of a majority of the combination of the outstanding Common
Stock and Series A Preferred Stock, voting as one class.
Common Stock
Holders of shares of Common Stock will be entitled to receive dividends
when, as and if declared by the Board of Directors and to share ratably in the
assets of the Company legally available for distribution to its stockholders in
the event of the liquidation, dissolution or winding up of the Company, in each
case subject to the rights of the holders of the Series A Preferred Stock.
Holders of Common Stock have no preemptive, subscription, redemption or
conversion rights. All of the issued and outstanding shares of Common Stock are
duly authorized, validly issued, fully-paid and non-assessable.
The registrar and transfer agent for the Common Stock is Continental Stock
Transfer and Trust Company, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
The authorized but unissued preferred stock may be issued by the Board of
Directors from time to time in one or more series with such preferences, terms
and rights as the Board of Directors may determine without further action by the
stockholders of the Company. Accordingly, the Board of Directors has the power
to fix the dividend rate and to establish the provisions, if any, relating to
voting rights,
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redemption rates, sinking fund, liquidation preferences and conversion rights
for any series of preferred stock issued in the future.
It is not possible to state the actual effect of the authorization of the
preferred stock upon the rights of holders of the Common Stock until the Board
of Directors determines the specific rights of the holders of a series of the
preferred stock. The issuance of the preferred stock may have the effect of
delaying, deferring or preventing a change in control of the Company without
further action by the stockholders.
Series A Preferred Stock
The holders of the Series A Preferred Stock are entitled to an annual
dividend of $2.00 per share, payable semi-annually but only when and if declared
by the Board of Directors out of funds legally available therefor. Dividends on
the Series A Preferred Stock are cumulative and accrue and accumulate. No
dividends are to be paid or set apart for payment on the Common Stock, nor are
any shares of Common Stock to be redeemed, retired or otherwise acquired for
valuable consideration unless the Company has paid in full, or made appropriate
provision for the payment in full of, all dividends which have then accumulated
on the Series A Preferred Stock.
Since the Company did not make cash dividend payments for eight semi-annual
periods from the date of issuance of the Series A Preferred Stock, any holder of
Series A Preferred Stock may elect, upon written notice to the Company, to be
paid all or any part of such accrued and unpaid dividends, and any dividends
which accrue but are not paid in cash within thirty days of the scheduled
payment date thereafter, in shares of the Company's Common Stock. Accrued and
unpaid dividends payable to holders of Series A Preferred Stock as of the date
such holder elects to convert the Series A Preferred Stock into Common Stock
may, at the Company's option, be paid by the Company's issuance of Common Stock
to such holder. In all cases the number of shares of Common Stock to be received
in lieu of accrued dividends shall be determined by dividing the aggregate
amount of the accrued and unpaid dividends by the conversion rate of the Series
A Preferred Stock in effect on the date of election. To date, the Company has
paid no dividends on the Series A Preferred Stock, except for accrued dividends
payable on Series A Preferred Stock which has been converted, all of which have
been paid with Common Stock. The Company does not presently intend to pay cash
dividends on the Series A Preferred Stock. There were 1,733,000 of accrued and
unpaid dividends on the Series A Preferred Stock as of March 31, 1998. Dividends
on the Series A Preferred Stock currently accrue at the rate of $216,000 per
year.
Each share of Series A Preferred Stock is convertible at any time prior to
redemption. For purposes of conversion, each share of Series A Preferred Stock
is deemed to have a value of $25.00. The Series A Preferred Stock is convertible
into Common Stock at a conversion rate of $11.00 per share of Common Stock.
The
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conversion rate will be adjusted upon the Company's payment of dividends on its
Common Stock in Common Stock, the subdivision or reduction of the Company's
outstanding Common Stock, the reclassification of the Common Stock or the merger
or consolidation of the Company, provided, however, that no such adjustment to
the conversion rate will be made unless the net effect on the conversion price
per share of all such events is at least $.50 in the aggregate.
The Company may at any time, redeem the whole or any part of the Series A
Preferred Stock then outstanding at a redemption price of $25.00 per share, plus
in each case a sum equal to all accumulated and unpaid dividends thereon through
the date fixed for redemption. In case of redemption of only part of the Series
A Preferred Stock at any time outstanding, the Company shall designate the
amount of Series A Preferred Stock so to be redeemed and shall redeem such
Series A Preferred Stock on a pro rata basis. Subject to certain limitations,
the Board of Directors shall have the power and authority to prescribe the terms
and conditions upon which the Series A Preferred Stock shall be redeemed from
time to time.
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of Series A Preferred Stock will be
entitled to receive in cash out of the assets of the Company, whether from
capital or from earnings, available for distribution to its stockholders, before
any amount shall be paid to the holders of the Common Stock, the sum of $25.00
per share of Series A Preferred Stock, plus an amount equal to all accumulated
and unpaid dividends thereon through the date fixed for payment of such
distributive amount.
All shares of Common Stock are of junior rank to Series A Preferred Stock
in respect of the preferences as to dividends, distributions and payments upon
the liquidation, dissolution or winding up of the Company. The rights of the
holders of the Common Stock are subject to the preferences and relative rights
of the Series A Preferred Stock. The Company may authorize and issue additional
or other Preferred Stock which is of equal rank with the Series A Preferred
Stock in respect of the preferences as to dividends, distributions and payments
upon the liquidation, dissolution or winding up of the Company; provided,
however, that for so long as any Series A Preferred Stock remains outstanding,
the Company shall not issue any capital stock which is more senior in rank than
the Series A Preferred Stock in respect of the foregoing preferences or which
shall have greater voting rights than the Series A Preferred Stock. In the event
of a merger or consolidation of the Company with or into another corporation,
the Series A Preferred Stock shall maintain its relative powers, designations
and preferences.
Common Stock Purchase Warrants
As of May 29, 1998 the Company had outstanding warrants to purchase an
aggregate of 1,038,686 shares of Common Stock at exercise prices ranging from
$2.50 to $ 5.63 per share.
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Options to Purchase Common Stock
As of May 29, 1998 the Company had outstanding options to purchase an
aggregate of 4,378,736 shares of Common Stock at exercise prices ranging from
$1.88 to $14.88 per share held by employees, directors and consultants under the
Company's Non-Qualified Stock Option Plan.
Independent Directors Stock Plan
Under the terms of the Company's Independent Directors Stock Plan (approved
by stockholders in December 1996) each independent director is granted shares of
Common Stock equivalent to $2,500 per quarter, plus $500 for Board of Directors'
meeting attended. The number of shares issued is based on the fair market value
of the Common Stock on the last trading day of the applicable quarter.
Registration Rights
Schering Corporation has piggyback registration rights with respect to
847,489 shares of Common Stock. Such shares are eligible under Rule 144(k) of
the Securities Act of 1933, as amended.
