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EXHIBIT 10.2
STOCK ISSUANCE AGREEMENT
THIS IS A STOCK ISSUANCE AGREEMENT entered into, effective as
of October 1, 1996, on this 24th day of September, 1996 between Magainin
Pharmaceuticals Inc., a Delaware corporation ("Magainin"), and The Scripps
Research Institute ("Scripps").
BACKGROUND
Simultaneously with the execution hereof, Magainin has entered
into a Second Amendment to License Agreement (the "MPS Amendment") with
Multiple Peptide Systems, Inc. ("MPS"), to amend certain provisions of the
License Agreement, dated as of November 4, 1988, between Magainin and MPS, as
amended by the First Amendment to Agreement, dated as of February 1, 1990.
Scripps has executed a Consent and Agreement to the MPS Amendment (the "Consent
and Agreement").
Scripps and MPS have entered into a Second Amendment to
License Agreement, dated as of the date hereof, (the "Second Amendment"), to
make certain amendments to a License Agreement Regarding Magainin Peptides,
dated as of October 20, 1988, between Scripps and MPS, as amended by the First
Amendment to Agreement, dated as of March 1, 1990, to correspond with certain
of the amendments to the MPS/Magainin Agreement implemented by the MPS
Amendment. This Agreement is entered into pursuant to the Second Amendment.
TERMS
NOW THEREFORE, intending to be legally bound hereby, the
parties agree as follows:
1. ISSUANCE OF SHARES. Subject to the terms and conditions hereof, and
in consideration for the agreements and obligations of Scripps under the
Consent and Agreement and the Second Amendment, Magainin shall, at the Closing
(as defined in Section 2 hereof), issue to Scripps 275,000 duly authorized,
validly issued, fully-paid and nonassessable shares (the "Shares") of
Magainin's Common Stock, par value $.002 per share.
2. THE CLOSING.
2.1 THE CLOSING DATE. The issuance of the Shares (the "Closing")
shall occur on October 4, 1996 or such other time as may be agreed upon in
writing by Magainin and Scripps (the "Closing Date"). At the Closing, Magainin
shall deliver to Scripps certificate(s) for the Shares registered in the name
specified in writing by Scripps to Magainin.
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2.2 CONDITIONS TO CLOSING. Magainin's obligation to issue the
Shares and deliver such stock certificate(s) to Scripps at the Closing shall be
subject to the accuracy, as of the Closing Date, of (a) the representations and
warranties of Scripps set forth in this Agreement , the Consent and Agreement
and the Second Amendment, (b) the representations and warranties of MPS set
forth in the Second Amendment and in the MPS Amendment and (c) the
representations and warranties of Houghten set forth in the MPS Amendment. At
the Closing, each of Houghten, MPS and Scripps shall deliver to Magainin a
certificate, executed by a duly authorized officer, as to the matters set forth
in clauses (a), (b) or (c), as the case may be.
3. RESTRICTIONS ON TRANSFER AND REGISTRATION RIGHTS.
3.1 RESTRICTIONS ON TRANSFERABILITY. The Shares shall not be
transferable in the absence of registration under the Securities Act of 1933,
as amended (the "Securities Act"), or any applicable state securities laws, or
applicable exemptions therefrom, or in the absence of compliance with any term
of this Agreement. Magainin shall be entitled to give stop transfer
instructions to the transfer agent with respect to the Shares in order to
enforce the foregoing restrictions.
3.2 RESTRICTIVE LEGENDS. Each certificate representing the 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 AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR UNDER ANY APPLICABLE STATE
SECURITIES LAWS. THE SHARES MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.
THE SHARES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF
HOLDERS THEREOF ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AND OTHER RESTRICTIONS, AND THE HOLDER OF THE SHARES
REPRESENTED BY THIS CERTIFICATE IS BOUND BY THE TERMS OF THE
STOCK ISSUANCE AGREEMENT BETWEEN THE ORIGINAL PURCHASER AND
THE COMPANY (COPIES OF WHICH MAY BE OBTAINED FROM THE
COMPANY).
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3.3 REGISTRATION OF SHARES.
3.3.1 REGISTRATION. No later than 20 days after the date
hereof, unless not permitted under the then applicable rules and regulations of
the Securities and Exchange Commission ("SEC"), Magainin will file a
registration statement (the "Registration Statement") with the SEC under the
Securities Act to register the resale of the Shares in non-underwritten market
transactions. Magainin will use its best efforts to have the Registration
Statement declared effective as soon as possible, and will keep the
Registration Statement effective until the earlier of (i) two years from the
date hereof, or (ii) the date as of which counsel for Magainin reasonably
determines that the Shares may be freely sold without restriction under the
Securities Act, subject to such periods of time when Magainin must suspend the
use of the prospectus forming a part of the Registration Statement until such
time as an amendment is filed and declared effective or an appropriate report
is filed by Magainin with the SEC.
3.3.2 WITHHOLDING OF SHARES. If requested by the managing
underwriter of an underwritten public offering of securities by Magainin,
Scripps agrees to withhold the Shares from the market for a period, not to
exceed a period ending 90 days following the effective date of the registration
statement relating to such offering, which the managing underwriter reasonably
determines is necessary in order to effect the underwritten public offering, if
the same restriction is agreed to by the officers and directors of Magainin.
3.4 ABOUT REGISTRATION.
3.4.1 Magainin shall pay all Registration Expenses (as
defined below) in connection with any registration, qualification or compliance
hereunder, and Scripps shall pay all Selling Expenses (as defined below) and
other expenses that are not Registration Expenses relating to the Shares
("Registrable Securities") resold by Scripps. "Registration Expenses" shall
mean all expenses, except for Selling Expenses, incurred by Magainin in
complying with the registration provisions of this Agreement, including without
limitation all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for Magainin, 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,
underwriting fees and stock transfer taxes applicable to the Registrable
Securities and all fees and disbursements of counsel for Scripps.
3.4.2 In the case of any registration effected by Magainin
pursuant to these registration provisions, Magainin will (i) 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 the Registrable Securities; (ii) furnish such number of
prospectuses and other documents incident thereto, including any amendment of
or supplement to the prospectus, as Scripps from time to time may reasonably
request; and (iii) provide a transfer
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agent and registrar for all Registrable Securities registered pursuant to the
Registration Statement and a CUSIP number for all such Registrable Securities;
3.4.3 In the case of any registration effected by
Magainin pursuant to these registration provisions, Magainin will use its best
efforts to (i) cause all such Registrable Securities registered as described
herein to be listed on each securities exchange and quoted on each quotation
service on which similar securities issued by Magainin are then listed or
quoted; (ii) comply with all applicable rules and regulations of the SEC; and
(iii) file the documents required of Magainin and otherwise use its best
efforts to maintain requisite blue sky clearance in (A) all jurisdictions in
which any of the Shares is originally sold and (B) all other states specified
in writing by a Holder, provided as to clause (B), however, that Magainin shall
not 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.
3.4.4 Scripps shall furnish to Magainin such information
regarding it and the distribution proposed by such Holder as Magainin may
reasonably request in writing and as shall be reasonably required in connection
with any registration, qualification or compliance described herein. Scripps
shall represent that such information is true and complete.
3.4.5 If Scripps shall propose to sell any Registrable
Securities pursuant to the Registration Statement, it shall notify Magainin of
its intent to do so at least three full business days prior to such sale, and
the provision of such notice to Magainin shall be deemed to establish an
agreement by Scripps to comply with the registration provisions contained
herein. Such notice shall be deemed to constitute a representation that any
information previously supplied by Scripps is accurate as of the date of such
notice. At any time within such three business day period, Magainin may refuse
to permit Scripps to resell any Registrable Securities pursuant to the
Registration Statement; provided that in order to exercise this right, Magainin
must deliver a certificate in writing to Scripps to the effect that a delay in
such sale is necessary because, in the good faith judgment of Magainin, a sale
pursuant to the Registration Statement in its then-current form could require
the public disclosure of information that would not otherwise be required to be
disclosed (which disclosure would be burdensome or could have a material
adverse effect on Magainin) or that would in other respects constitute a
violation of the federal securities laws. In such an event, Magainin shall use
its best efforts to amend the Registration Statement if necessary and take all
other actions necessary to allow such sale under the federal securities laws,
and shall notify Scripps promptly after it has determined that such
circumstances no longer exist. Notwithstanding the foregoing, Magainin shall
not under any circumstances be entitled to exercise its right to withdraw the
Registration Statement more than two times in any twelve (12) month period, and
the period during which such Registration Statement may be withdrawn shall not
exceed thirty (30) days. Scripps hereby covenants and agrees that it will not
sell any Registrable Securities pursuant to the Registration Statement during
the periods the Registration Statement is withdrawn as set forth in this
Section 3.4.5.
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3.4.6 When Scripps is entitled to sell and gives notice of
its intent to sell pursuant to the Registration Statement, Magainin shall
furnish to Scripps a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include
an untrue statement of material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or incomplete in the light of the circumstances then existing.
3.5 INDEMNIFICATION AND CONTRIBUTION.
3.5.1 Magainin agrees to indemnify and hold harmless
Scripps and its trustees, officers, employees and agents from and against any
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) to which Scripps or any of them 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 claim by a third party asserting any untrue statement of a
material fact in the Registration Statement, or any omission of a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading
(including any preliminary or final prospectus contained therein, and any
amendments or supplements thereto, and any filings and information incorporated
therein by reference), in each case on the effective date thereof, or arise out
of any failure by Magainin to fulfill any undertaking included in such
Registration Statement, and Magainin will reimburse Scripps and the other
indemnified parties hereunder for any legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any such action,
proceeding or claim; provided, however, that Magainin shall not be liable in
any such case to the extent that such loss, claim, damages or liability arises
out of, or is based upon (i) an untrue statement of a material fact made in
such Registration Statement, or any omission of a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, made in reliance upon
and in conformity with written information furnished to Magainin by or on
behalf of Scripps specifically for use in preparation of such Registration
Statement or (ii) any untrue statement of a material fact, or any omission of a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, in any prospectus that is corrected in any subsequent prospectus
that was delivered to Scripps prior to the pertinent sale or sales by Scripps.
3.5.2 Scripps agrees to indemnify and hold harmless
Magainin and its directors, officers, employees and agents from and against any
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) to which Magainin or any of them 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 claim by a third party asserting (i) an untrue statement made in
such Registration Statement, or any omission of a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, made in reliance upon
and in conformity with written information furnished to Magainin by or on
behalf of Scripps specifically
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for use in preparation of such Registration Statement, provided that Scripps
shall not be liable in any such case for any untrue statement included in any
Prospectus which statement has been corrected, in writing, by Scripps and
delivered to Magainin before the sale from which such loss occurred or (ii) any
untrue statement in any prospectus of a material fact, or any omission of a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, that is corrected in any subsequent prospectus that was delivered
to the purchaser prior to the pertinent sale or sales by Scripps, and Scripps
will, as incurred, reimburse Magainin and the other indemnified parties
hereunder for any legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim.
3.5.3 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 3.5,
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
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. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action, suit or
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding.
3.5.4 If the indemnification provided for in this Section
3.5 is unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then the indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) based upon such party's relative fault, 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 Magainin on the one hand or
Scripps on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
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omission. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this Section 3.5.4 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. 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.
3.5.5 The obligations of Magainin and Scripps under this
Section 3.5 shall be in addition to any liability which Magainin and Scripps
may otherwise have and shall extend, upon the same terms and conditions, to
each person, if any, who controls Magainin or Scripps within the meaning of the
Securities Act.
3.6 TRANSFER OF REGISTRATION RIGHTS. The right to sell
Registrable Securities pursuant to the Registration Statement described herein
may not be assigned or transferred by Scripps, except to an Affiliate. For the
purpose of this Section, "Affiliate" shall mean any entity which controls, is
controlled or is under common control with Scripps.
4. REPRESENTATIONS AND WARRANTIES OF SCRIPPS. Scripps hereby represents
and warrants to Magainin as of the date hereof as follows:
4.1 INVESTMENT EXPERIENCE. Scripps believes that it has received
all the information it considers necessary or appropriate to enable it to
decide whether to acquire the Shares pursuant to this Agreement. Scripps has
had an opportunity to become aware of Magainin's business affairs and financial
condition, has had an opportunity to ask questions and receive answers, review
documents and gather information about Magainin, and has acquired sufficient
information about Magainin to reach an informed and knowledgeable decision to
acquire the Shares. Scripps has such business and financial experience as is
required to give it the capacity to protect its own interests in connection
with the acquisition of the Shares and can bear the economic risk of its
investment. Scripps acknowledges receipt of Magainin's Annual Report on Form
10-K for the fiscal year ended December 31, 1995 and Quarterly Reports on Form
10-Q for the quarters ended March 31, 1996 and June 30, 1996. Without limiting
the foregoing, Scripps acknowledges that release of the results from pivotal
Phase III clinical testing of MSI-78 is imminent and that no assurances can be
given as to the nature or timing of such results.
4.2 INVESTMENT INTENT. Scripps is acquiring the Shares for
investment for its own account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). Scripps has no
present intention of selling, granting any participation in, or otherwise
distributing the Shares, except in compliance with the Securities Act or
pursuant to an available exemption thereunder.
4.3 RESTRICTED SECURITIES. Scripps understands that the Shares
have not been registered under the Securities Act or registered or qualified
under any state securities law in reliance on specific exemptions therefrom,
which exemptions may depend upon, among other things, the bona
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fide nature of Scripps's investment intent as expressed herein. Scripps is
familiar with Rule 144 under the Securities Act, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
4.4 NO LEGAL, TAX OR INVESTMENT ADVICE. Scripps understands that
nothing in this Agreement or any other materials presented to Scripps in
connection with the acquisition of the Shares constitutes legal, tax or
investment advice. Scripps has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its acquisition of the Shares.
4.5 CORPORATE POWER; AUTHORITY. Scripps has all requisite legal
and corporate power and has taken all requisite corporate action to execute,
deliver and perform its obligations under this Agreement. This Agreement has
been duly authorized, executed and delivered on behalf of Scripps and
constitutes the valid and binding agreement of Scripps, enforceable in
accordance with its terms.
5. NOTICES. All notices and other communications hereunder shall be in
writing (whether or not a writing is expressly required hereby), and shall be
deemed to have been given (i) if hand delivered or sent by an express mail
service or by courier, then if and when delivered to and received by the
respective parties at the below addresses (or at such other address as a party
may hereafter designate for itself by notice to the other party as required
hereby), or (ii) if mailed, then on the next business day following the date on
which such communication is deposited in the United States mails, by first
class certified mail, return receipt requested, postage prepaid, and addressed
to the respective parties at the below addresses (or at such other address as a
party may hereafter designate for itself by notice to the other party as
required hereby):
If to Magainin, to:
Magainin Pharmaceuticals Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attn: President
If to Scripps, to:
The Scripps Research Institute
00000 Xxxxx Xxxxxx Xxxxx Xxxx
Xx Xxxxx, XX 00000
Attn: President
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6. MISCELLANEOUS.
6.1 SURVIVAL OF WARRANTIES. The warranties and representations of
Magainin and Scripps contained in or made pursuant to this Agreement shall
survive for the period described in Section 3.3 during which Magainin is
obligated to keep the Registration Statement described therein effective.
6.2 SUPPLY OF REPORTS. As long as Scripps owns at least 10% of
the Shares, Magainin will, upon the reasonable request of Scripps, furnish to
Scripps (i) a copy of the most recent annual, quarterly or current report of
Magainin filed with the SEC under the Securities Exchange Act of 1934, as
amended, and (ii) such other information as may be reasonably required to
enable Scripps to avail itself of any applicable exemption from registration
under the rules and regulations under the Securities Act. In addition, if at
any time the Company is not required to file such reports with the SEC, it
will, upon the request of Scripps, use its best efforts to make publicly
available other information so long as is necessary to permit sales of the
Shares pursuant to Rule 144 or Rule 144A under the Securities Act.
6.3 GOVERNING LAW; PARTIES IN INTEREST. This Agreement shall be
governed by the laws of the Commonwealth of Pennsylvania, without regard to the
conflicts of laws thereof, and shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
6.4 COUNTERPARTS. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
6.5 ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the Consent
and Agreement set forth all of the promises, covenants, agreements, conditions
and undertakings between the parties hereto with respect to the subject matter
hereof, and supersede all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as contained herein or therein. This Agreement may not be changed
orally but only by an agreement in writing, duly executed by or on behalf of
the party or parties against whom enforcement of any waiver, change,
modification, consent or discharge is sought.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
MAGAININ PHARMACEUTICALS INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Executive Officer
THE SCRIPPS RESEARCH INSTITUTE
By: /s/ Xxxxxx XxXxxxxxx
---------------------------------------------
Name: Xxxxxx XxXxxxxxx
Title: Senior Vice President, Treasurer
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