EXHIBIT 4.3
COMMON STOCK INVESTMENT AGREEMENT
COMMON STOCK INVESTMENT AGREEMENT ("Agreement") dated as of
April ___, 1999 between Vion Pharmaceuticals, Inc., a Delaware corporation (the
"Company"); and _____________________________________ (each individually an
"Investor" and collectively the "Investors").
W I T N E S S E T H:
--------------------
WHEREAS, the Company desires to sell and issue to the
Investors, and the Investors wish to purchase from the Company, an aggregate of
__________ shares (the "Shares") of the Company's common stock, $.01 par value
("Common Stock"), on the terms and conditions set forth herein; and
WHEREAS, the Investors will have registration rights with
respect to the Shares pursuant to the terms of that certain Registration Rights
Agreement to be entered into between the Company and the Investors substantially
in the form of Exhibit 4.2(f) hereto ("Registration Rights Agreement"); and
NOW, THEREFORE, in consideration of the foregoing premises and
the covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
---------------------------
Section 1.1 Purchase and Sale of Shares. Upon the following terms and
conditions, the Company shall issue and sell to each Investor the number of
Shares set forth on Schedule 1.1 hereto, and each Investor severally shall
purchase from the Company such number of Shares.
Section 1.2 Purchase Price. The per Share purchase price for the Shares
(the "Purchase Price") shall be equal to $4.4747, [Agreement with Xxxxxxx
Associates, L.P. and Westgate International, L.P. only: being 90% of the average
closing price of the Common Stock on the Nasdaq Small-Cap Market for the ten
(10) consecutive trading days immediately prior to the Closing Date], and the
aggregate purchase price shall be $___________.
Section 1.3 The Closing. (a) The closing of the purchase and sale of
the Shares (the "Closing") shall take place at the offices of the Investors'
counsel (i) on the date hereof or (ii) at such other time and place and/or on
such other date as the Investors and the Company may agree. The date on which
the Closing occurs is referred to herein as the "Closing Date."
(b) On the Closing Date, the Company shall deliver to each Investor
certificates (with the number of and denomination of such certificates as
reasonably requested by such Investor) representing the Shares purchased
hereunder by such Investor registered in the
name of such Investor or its nominee, or deposit such Shares into accounts
designated by such Investor, and such Investor shall deliver to the Company the
Purchase Price for the number of Shares purchased by such Investor hereunder by
wire transfer in immediately available funds to an account designated in writing
by the Company. The delivery of payment by each Investor of the Purchase Price
applicable to it as set forth in this paragraph shall constitute a payment
delivered to the Company in satisfaction of such Investor's obligation to pay
the Purchase Price hereunder. In addition, each party shall deliver all
documents, instruments and writings required to be delivered by such party
pursuant to this Agreement at or prior to the Closing.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
------------------------------
Section 2.1 Representations and Warranties of the Company. The Company
hereby makes the following representations and warranties to each of the
Investors as of the date hereof and on the Closing Date:
(a) Organization and Qualification; Material Adverse Effect. The
Company is a corporation duly incorporated and existing in good standing under
the laws of the State of Delaware and has the requisite corporate power to own
its properties and to carry on its business as now being conducted. The Company
does not have any direct or indirect subsidiaries other than the MicroFab
Biosystems, Inc. (which is 90% owned by the Company). A "subsidiary" of the
Company is any company of which more than 50% of the voting shares are directly
or indirectly owned by the Company. The Company is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary other than those in which the failure so to qualify
would not have a Material Adverse Effect. "Material Adverse Effect" means any
adverse effect on the business, operations, properties, prospects, or financial
condition of the entity with respect to which such term is used and which is
material to such entity and other entities controlling or controlled by such
entity taken as a whole, or any material adverse effect on the transactions
contemplated under this Agreement, the Registration Rights Agreement or any
other agreement or document contemplated hereby or thereby.
(b) Authorization; Enforcement. (i) The Company has the requisite
corporate power and authority to enter into and perform this Agreement and the
Registration Rights Agreement and to issue the Shares in accordance with the
terms hereof, (ii) the execution and delivery of this Agreement and the
Registration Rights Agreement by the Company and the consummation by it of the
transactions contemplated hereby and thereby, including the issuance of the
Shares, have been duly authorized by all necessary corporate action, and no
further consent or authorization of the Company or its Board of Directors or
stockholders is required, (iii) this Agreement and the Registration Rights
Agreement have been duly executed and delivered by the Company, and (iv) this
Agreement and the Registration Rights Agreement constitute valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of creditors' rights and
remedies or by other equitable principles of general application.
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(c) Capitalization. The capitalization of the Company is set forth on
Schedule 2.1(c). All of the outstanding shares of the Company's Common Stock
have been validly issued and are fully paid and nonassessable. There are
currently outstanding options for 2,804,499 shares of Common Stock and
outstanding Warrants for 5,125,761 shares of Common Stock. Except as described
herein as in Schedule 2.1(c), there are no other scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights exchangeable or convertible into, any shares of capital stock of the
Company, or contracts, commitments, understandings, or arrangements by which the
Company is or may become bound to issue additional shares of capital stock of
the Company or options, warrants, scrip, rights to subscribe to, or commitments
to purchase or acquire, any shares, or securities or rights convertible into
shares, of capital stock of the Company, except as contemplated by this
Agreement. Attached hereto as Exhibit 2.1(c) are true and correct copies of the
Company's Certificate of Incorporation (the "Charter) and By-Laws (the
"By-Laws"), each as in effect on the date hereof.
(d) Issuance of Shares. Upon issuance to the Investors hereunder, the
Shares shall be validly issued, fully paid and non-assessable, free and clear of
any and all liens, claims and encumbrances, and entitled to be traded on the
Nasdaq Small-Cap Market, and the holders of the Shares shall be entitled to all
rights and preferences accorded to a holder of Common Stock. The outstanding
Common Stock is currently listed on the Nasdaq Small-Cap Market.
(e) No Conflicts. The execution, delivery and performance of this
Agreement and the Registration Rights Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
will not (i) result in a violation of the Company's Charter or By-Laws or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture, patent, patent license or instrument to which the Company or its
subsidiary is a party, or result in a violation of any Federal, state, local or
foreign law, rule, regulation, order, judgment or decree (including Federal and
state securities laws and regulations) applicable to the Company or its
subsidiary or by which any property or asset of the Company or its subsidiary is
bound or affected (except for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect; it being
understood that the issuance of Shares pursuant to this Agreement will trigger
antidilution provisions contained in outstanding warrants and outstanding shares
of the Company's Preferred Stock; and provided that, for purposes of such
representation as to Federal, state, local or foreign law, rule or regulation,
no representation is made herein with respect to any of the same applicable
solely to the Investors and not to the Company. The business of the Company and
its subsidiary is not being conducted in violation of any law, ordinance or
regulations of any governmental entity, except for violations which either
singly or in the aggregate do not and will not have a Material Adverse Effect.
The Company is not required under Federal, state, local or foreign law, rule or
regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this Agreement and the
Registration Rights Agreement or issue and sell the Shares in accordance with
the terms hereof, except for the registration provisions provided in the
Registration Rights Agreement, and applicable filings under federal and state
securities laws; provided that, for purposes of the
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representation made in this sentence, the Company is assuming and relying upon
the accuracy of the relevant representations and agreements of the Investors
herein.
(f) SEC Documents; Financial Statements. The Common Stock of the
Company is registered pursuant to Section 12(g) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and the Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the Securities and Exchange Commission ("SEC") pursuant to the reporting
requirements of the Exchange Act, including material filed pursuant to Section
13(a) or 15(d), in addition to one or more registration statements and
amendments thereto heretofore filed by the Company with the SEC (all of the
foregoing including filings incorporated by reference therein being referred to
herein as the "SEC Documents"). The Company has delivered or made available to
the Investors true and complete copies of all SEC Documents (including, without
limitation, proxy information and solicitation materials and registration
statements) filed with the SEC since December 31, 1997. The Company has not
provided to the Investors any material non-public information or any information
which, according to applicable law, rule or regulation, should have been
disclosed publicly by the Company but which has not been so disclosed. As of
their respective dates, the SEC Documents complied in all material respects with
the requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder and other Federal, state and local laws, rules and
regulations applicable to such SEC Documents, and none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The SEC Documents contain all material information concerning the
Company, and [Agreements with Wechsler & Co., Inc. and United Equities
Commodities Company only: except for the consummation on April 8, 1999 of the
First Companion Offering (as defined below)] [Agreement with Kleinwort Xxxxxx
Limited and Winchester Capital Healthcare Partners, LLC only: except for the
consummation on April 8, 1999 and April 13, 1999 of the Companion Offerings (as
defined below)] no event or circumstance has occurred which would require the
Company to disclose such event or circumstance in order to make the statements
in the SEC Documents not misleading on the date hereof or on the Closing Date
but which has not been so disclosed. The financial statements of the Company
included in the SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC or other applicable rules and regulations with respect thereto. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed or summary statements) and
fairly present in all material respects the financial position of the Company as
of the dates thereof and the results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).
(g) Principal Exchange/Market. The principal market on which the Common
Shares are currently traded is the Nasdaq Small-Cap Market.
(h) No Material Adverse Change. Since September 30, 1998, no Material
Adverse Effect has occurred or exists with respect to the Company or its
subsidiary, except as
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otherwise disclosed or reflected in other SEC Documents prepared through or as
of a date subsequent to September 30, 1998.
(i) No Undisclosed Liabilities. The Company and its direct and indirect
subsidiaries have no material liabilities or obligations not disclosed in the
SEC Documents, other than those liabilities incurred in the ordinary course of
the Company's or the subsidiary's respective businesses since September 30,
1998, which liabilities, individually or in the aggregate, do not or would not
have a Material Adverse Effect on the Company or its subsidiaries. Each of the
Company and its subsidiary have paid all material taxes which are due (and filed
all material tax returns), except for taxes which it reasonably and actively
disputes.
(j) No General Solicitation. Neither the Company, nor any of its
affiliates, or, to its knowledge, any person acting on its or their behalf
(other than the Investors, as to whom the Company makes no representation) has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D under the Securities Act of 1933, as amended (the
"Act")) in connection with the offer or sale of the Shares
(k) No Integrated Offering. Neither the Company, nor any of its
affiliates, nor to its knowledge any person acting on its or their behalf (other
than the Investors, as to whom the Company makes no representation) has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would require
registration of the Shares under the Act.
(l) Form S-3. The Company is eligible to file the Registration
Statement (as defined in the Registration Rights Agreement) on Form S-3 under
the Act and rules promulgated thereunder, and Form S-3 is permitted to be used
for the registration of the Shares under the Act and rules promulgated
thereunder.
(m) Intellectual Property. The Company (and/or its subsidiary) owns or
has licenses to use certain patents, copyrights and trademarks ("intellectual
property") associated with its business. The Company and its subsidiary have all
intellectual property rights which are needed to conduct the business of the
Company and its subsidiary as it is now being conducted as disclosed in the SEC
Documents. The Company and its subsidiary have no reason to believe that the
intellectual property rights which it owns are invalid or unenforceable or that
the use of such intellectual property by the Company or its subsidiary infringes
upon or conflicts with any right of any third party, and neither the Company nor
any of its subsidiaries has received notice of any such infringement or
conflict. Except as disclosed in the SEC Documents, the Company and its
subsidiary have no knowledge of any infringement of its intellectual property by
any third party.
(n) No Litigation. Except as set forth in the SEC Documents delivered
to the Investors prior to the date of this Agreement ("Pre-Agreement SEC
Documents") no litigation or claim (including those for unpaid taxes) against
the Company or any of its subsidiaries is pending or, to the Company's
knowledge, threatened, and no other event has occurred, which if determined
adversely would have a Material Adverse Effect on the Company or would
materially adversely effect the transactions contemplated hereby. The legal
proceedings described in the Pre-Agreement SEC Documents will not have an effect
on the transactions
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contemplated hereby.
(o) Compliance with Other Instruments. Each of the Company and its
subsidiary is not in violation or default of any provisions of its Charter or
Bylaws, or of any material provision of any material instrument or material
contract to which it is a party or by which it is bound or, to its knowledge, of
any provision of any Federal or state judgment, writ, decree, order, statute,
rule or governmental regulation applicable to it, which would have a Material
Adverse Effect, except as described in the SEC Documents.
(p) Key Employees. No Key Employee, to the best knowledge of the
Company and its subsidiary, is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement, non-competition agreement, or any other
contract or agreement or any restrictive covenant, and the continued employment
of each Key Employee does not subject the Company or its subsidiary to any
liability with respect to any of the foregoing matters. No Key Employee has, to
the best knowledge of the Company, any intention to terminate his employment
with, or services to, the Company or its subsidiary. "Key Employee" means
[Agreement with Xxxxxxx Associates, L.P. and Westgate International, L.P. only:
each of Xxxx X. Xxxxxx and] Xxxxxxx X. Xxxxx.
(q) Brokers. The Company has taken no action which would give rise to
any claim by any person for brokerage commissions, finder's fees or similar
payments by any Investor relating to this Agreement or the transactions
contemplated hereby. [Agreement with Xxxxxxx Associates, L.P. and Westgate
International, L.P. only: The Company may be required to pay a brokerage fee to
Xxxxxx & Co. in connection herewith.]
Section 1.2 Representations and Warranties of the Investors. Each of
the Investors, severally and not jointly, hereby makes the following
representations and warranties to the Company as of the date hereof and on the
Closing Date:
(a) Authorization; Enforcement. (i) Such Investor has the requisite
power and authority to enter into and perform this Agreement and the
Registration Rights Agreement and to purchase the Shares being sold hereunder,
(ii) the execution and delivery of this Agreement and the Registration Rights
Agreement by such Investor and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate or partnership or other Investor action, and (iii) this Agreement and
the Registration Rights Agreement constitute valid and binding obligations of
such Investor enforceable against such Investor in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of creditors' rights and remedies or by
other equitable principles of general application.
(b) No Conflicts. The execution, delivery and performance of this
Agreement and the Registration Rights Agreement and the consummation by such
Investor of the transactions contemplated hereby and thereby do not and will not
(i) result in a violation of such Investor's organizational documents, or (ii)
conflict with any agreement, indenture or instrument to which such Investor is a
party, or (iii) result in a violation of any law, rule, or regulation, or any
order, judgment or decree of any court or governmental agency applicable to such
Investor. Such Investor is not required to obtain any consent or authorization
of any governmental agency
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in order for it to perform its obligations under this Agreement or the
Registration Rights Agreement.
(c) Investment Representation. Such Investor is purchasing the Shares
for its own account and not with a view to distribution in violation of any
securities laws. Such Investor has no present intention to sell the Shares and
such Investor has no present arrangement (whether or not legally binding) to
sell the Shares to or through any person or entity; provided, however, that by
making the representations herein, such Investor does not agree to hold the
Shares or for any minimum or other specific term and reserves the right to
dispose of the Shares at any time in accordance with Federal and state
securities laws applicable to such disposition.
(d) Accredited Investor. Such Investor is an "accredited investor" as
defined in Rule 501 promulgated under the Act. The Investor has such knowledge
and experience in financial and business matters in general and investments in
particular, so that such Investor is able to evaluate the merits and risks of an
investment in the Shares and to protect its own interests in connection with
such investment. In addition (but without limiting the effect of the Company's
representations and warranties contained herein), such Investor has received
such information as it considers necessary or appropriate for deciding whether
to purchase the Shares pursuant hereto.
(e) No Registration. Such Investor understands that the Shares must be
held indefinitely until registered under the Act or an exemption from
registration is available. Such Investor has been advised or is aware of the
provisions of Rule 144 promulgated under the Act.
(f) Brokers. Such Investor has taken no action which would give rise to
any claim by any person for brokerage commissions, finder's fees or similar
payments by the Company relating to this Agreement or the transactions
contemplated hereby.
(g) Reliance by the Company. Such Investor understands that the Shares
are being offered and sold in reliance on a transactional exemption from the
registration requirements of Federal and state securities laws and that the
Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of such Investor set
forth herein in order to determine the applicability of such exemptions and the
suitability of such Investor to acquire the Shares.
ARTICLE III
COVENANTS
---------
Section 3.1 Registration and Listing; Effective Registration. Until the
earlier of June 30, 2003 or the occurrence of a "Going Private Event" (as
defined below), the Company will cause the Common Stock to continue to be
registered under Section 12(g) of the Exchange Act, will comply in all respects
with its reporting and filing obligations under the Exchange Act, and will not
take any action or file any document (whether or not permitted by the Exchange
Act or the rules thereunder) to terminate or suspend such reporting and filing
obligations. Until the earlier of June 30, 2003 or the occurrence of a "Going
Private Event," the Company shall continue the listing or trading of the Common
Stock on the Nasdaq Small-Cap Market or Nasdaq NMS or any national securities
exchange and comply in all respects with the Company's
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reporting, filing and other obligations under the bylaws or rules of the Nasdaq
Small-Cap Market and any other exchange or market where the Common Stock is then
traded. As used herein, "Going Private Event" shall mean a merger, consolidation
or a self-tender or exchange offer after which the Company has fewer than the
number of shareholders requiring Exchange Act registration, in each case only if
the applicable transaction or series of transactions has been approved by the
holders of a majority of the Common Stock. Except as provided in the
Registration Rights Agreement, the Company shall cause the Shares to be listed
on the Nasdaq Small-Cap Market, Nasdaq NMS or such other national markets (i.e.,
the New York Stock Exchange or the American Stock Exchange) on which the Common
Stock is then trading prior to the earlier of (i) the registration of the Shares
under the Act or (ii) one hundred twenty (120) days after the Closing hereunder.
As used herein and in the Registration Rights Agreement, the term "Effective
Registration" shall mean that all registration obligations of the Company
pursuant to the Registration Rights Agreement have been satisfied, such
registration is not subject to any suspension or stop order, the prospectus for
the Shares is current and the Shares are listed for trading on the Nasdaq
Small-Cap Market, Nasdaq NMS or such other national markets (i.e., the New York
Stock Exchange or the American Stock Exchange) on which the Common Stock is then
trading, and such trading has not been suspended for any reason, and neither the
Company nor any direct or indirect subsidiary of the Company is subject to any
bankruptcy, insolvency or similar proceeding.
Section 3.2 Expenses. The Company shall pay, at the Closing (or upon
the termination of this Agreement if no Closing occurs) and promptly upon
receipt of any further invoices relating to same, all reasonable due diligence
fees and expenses and reasonable attorneys' fees and expenses of Kleinberg,
Kaplan, Xxxxx & Xxxxx, P.C., up to a maximum amount of $20,000 [Agreements with
Wechsler & Co., Inc. and United Equities Commodities Company only: (including
such amounts incurred by the Investor in the First Companion Offering and the
Other Companion Offerings, if any)] [Agreement with Kleinwort Xxxxxx Limited and
Winchester Capital Healthcare Partners, LLC only: (except such amounts incurred
by the investors in the Companion Offerings)], incurred by the Investors in
connection with the preparation, negotiation, execution and delivery of this
Agreement, the Registration Rights Agreement, and the related agreements and
documents and the transactions contemplated hereunder and thereunder.
Section 3.3 Securities Compliance. The Company shall notify the SEC and
the NASD, in accordance with their requirements, of the transactions
contemplated by this Agreement and the Registration Rights Agreement, and shall
take all other necessary action and proceedings as may be required and permitted
by applicable law, rule and regulation, for the legal and valid issuance of the
Shares hereunder.
Section 3.4 Use of Proceeds. The proceeds received by the Company from
the sale of the Shares hereunder shall be used for working capital purposes.
Section 3.5 Additional Shares. If at any time or times during the
twelve-month period following the Closing Date, the Company issues or agrees to
issue any Common Stock at a price per share which is less than the Purchase
Price hereunder, or if the Company issues or agrees to issue any rights,
options, warrants or other securities which are directly or indirectly
convertible into or exchangeable for Common Stock for a consideration per share
of Common Stock deliverable upon conversion or exchange of such rights, options,
warrants or other
8
securities which is less than the Purchase Price (any such new issuance price
per share being referred to as the "New Issue Price"), then the Company shall
immediately thereafter issue to the Investors, on a pro rata basis, additional
registered, listed shares of Common Stock such that the total number of Shares
of Common Stock issued on the Closing Date and under this Section 3.5 shall
equal at least [Agreement with Xxxxxxx Associates, L.P. and Westgate
International, L.P. only: $2,000,000] [Agreement with Wechsler & Co., Inc. only:
$250,000] [Agreement with United Equities Commodities Company only: $1,000,000]
[Agreement with Kleinwort Xxxxxx Limited and Winchester Capital Healthcare
Partners, LLC only: $750,000] divided by the New Issue Price. The foregoing
provisions shall not apply to (i) issuances of shares of Common Stock pursuant
to the exercise or conversion of options, warrants or shares of preferred stock
which are outstanding as of the date hereof in accordance with such securities'
current exercise or conversion terms; (ii) the issuance of up to 1,543,063
employee stock options after the date hereof and any exercise thereof;
[Agreement with Xxxxxxx Associates, L.P. and Westgate International, L.P. only:
and (iii) issuances of additional Common Stock within ten (10) days from the
Closing Date on substantially the terms and conditions as are provided in this
Agreement for an aggregate purchase price not exceeding the excess of $4,000,000
over the aggregate Purchase Price hereunder (the "Companion Offering") and any
issuance of any additional shares of Common Stock pursuant to any provision of
the Companion Offering documents which is substantially identical to this
Section 3.5.] [Agreement with Wechsler & Co., Inc. only: (iii) any issuance of
any additional shares of Common Stock pursuant to Section 3.5 of the Common
Stock Investment Agreement dated April 8, 1999 pursuant to which the Company
issued on such date 446,957 shares of Common Stock (the "First Companion
Offering"); and (iv) any issuance of additional shares of Common Stock pursuant
to any provision substantially similar to this Section 3.5 of the offering
documents for one or more offerings of up to an aggregate of $1,750,000 of
Common Stock on the date hereof or hereafter but prior to April 23, 1999 (the
"Other Companion Offerings")] [Agreement with United Equities Commodities
Company only: (iii) any issuance of any additional shares of Common Stock
pursuant to Section 3.5 of the Common Stock Investment Agreement dated April 8,
1999 pursuant to which the Company issued on such date 446,957 shares of Common
Stock (the "First Companion Offering"); and (iv) any issuance of any additional
shares of Common Stock pursuant to any provision substantially similar to this
Section 3.5 of the offering documents for one or more offerings of up to an
aggregate of $1,000,000 of Common Stock on the date hereof or hereafter but
prior to April 23, 1999 (the "Other Companion Offerings")] [Agreement with
Kleinwort Xxxxxx Limited and Winchester Capital Healthcare Partners, LLC only:
and (iii) any issuance of any additional shares of Common Stock pursuant to
Section 3.5 of the three Common Stock Investment Agreements dated April 8, 1999
and April 13, 1999 pursuant to which the Company issued an aggregate of 726,306
shares of Common Stock (the "Companion Offerings")]. The foregoing provisions of
this Section 3.5 shall cease to be effective after the date, if any, upon which
the Company completes a private placement or public offering of Common Stock at
a price per share of Common Stock in excess of the Purchase Price and also
resulting in gross proceeds equal to or greater than $11,000,000.
ARTICLE IV
CONDITIONS
----------
Section 4.1 Conditions Precedent to the Obligation of the Company to
Sell the
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Shares. The obligation hereunder of the Company to issue and/or sell the Shares
to the Investors is subject to the satisfaction, at or before the Closing, of
each of the conditions set forth below. These conditions are for the Company's
sole benefit and may be waived by the Company at any time in its sole
discretion.
(a) Accuracy of the Investors' Representations and Warranties. The
representations and warranties of each Investor shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
particular date).
(b) Performance by the Investors. Each Investor shall have performed
all agreements and satisfied all conditions required to be performed or
satisfied by such Investor at or prior to the Closing.
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement or the Registration Rights Agreement.
Section 1.2 Conditions Precedent to the Obligation of the Investors to
Purchase the Shares. The obligation hereunder of each Investor to acquire and
pay for the Shares is subject to the satisfaction, at or before the Closing, of
each of the conditions set forth below. These conditions are for the Investors'
sole benefit and may be waived by the Investors at any time in their sole
discretion.
(a) Accuracy of the Company's Representations and Warranties. The
representations and warranties of the Company shall be true and correct in all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
particular date).
(b) Performance by the Company. The Company shall have performed all
agreements and satisfied all conditions required to be performed or satisfied by
the Company at or prior to the Closing.
(c) Nasdaq. From the date hereof to the Closing Date, trading in the
Company's Common Stock shall not have been suspended by the SEC or the Nasdaq
Small-Cap Market, and trading in securities generally as reported by the Nasdaq
Small-Cap Market shall not have been suspended or limited, and the Common Stock
shall not have been delisted from any exchange or market where it is currently
listed.
(d) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement or the Registration Rights Agreement.
(e) Opinion of Counsel. At the Closing the Investors shall have
received an opinion of counsel to the Company in the form attached hereto as
Exhibit 4.2(e) and such other opinions, certificates and documents as the
Investors or their counsel shall reasonably require
10
incident to the Closing.
(f) Registration Rights Agreement. The Company and the Investors shall
have executed and delivered the Registration Rights Agreement in the form and
substance of Exhibit 4.2(f) attached hereto.
(g) Adverse Changes. Since December 31, 1998, no event which had or is
likely to have a Material Adverse Effect on the Company or any of its direct or
indirect subsidiaries shall have occurred.
(h) Officer's Certificate. The Company shall have delivered to the
Investors a certificate in form and substance reasonably satisfactory to the
Investors, executed by an officer of the Company, certifying as to satisfaction
of closing conditions, incumbency of signing officers, charter, by-laws, good
standing and authorizing resolutions of the Company.
ARTICLE V
LEGEND AND STOCK
----------------
Each certificate representing the Shares shall be stamped or otherwise
imprinted with a legend substantially in the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR
OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW OR UPON DELIVERY
TO THIS CORPORATION OF AN OPINION OF LEGAL COUNSEL REASONABLY
SATISFACTORY TO THE CORPORATION THAT AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS IS AVAILABLE.
The Company agrees to reissue certificates representing the Shares
without the legend set forth above at such time as (i) the holder thereof is
permitted to dispose of such Shares pursuant to Rule 144(k) under the Act, (ii)
such Shares are sold to a purchaser or purchasers who (in the opinion of counsel
to the seller or such purchaser(s), in form and substance reasonably
satisfactory to the Company and its counsel) are able to dispose of such shares
publicly without registration under the Act, or (iii) such Shares are registered
under the Act.
[Agreement with Kleinwort Xxxxxx Limited and Winchester Capital
Healthcare Partners, LLC only: It is expressly contemplated that Kleinwort
Xxxxxx Limited may assign a portion of the Shares purchased by it hereunder to
Merifin Capital N.V. within the next 14 days, which transfer shall be accepted
by the Company and a new stock certificate(s) issued to Merifin Capital N.V.
upon delivery of a document containing such representations, and a legal
opinion, as are reasonably satisfactory to the Company's counsel.]
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ARTICLE VI
MISCELLANEOUS
-------------
Section 6.1 Stamp Taxes; Agent Fees. The Company shall pay all stamp
and other taxes and duties levied in connection with the issuance of the Shares
pursuant hereto.
Section 6.2 Specific Enforcement; Consent to Jurisdiction.
(a) The Company and the Investors acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which any of them may be entitled by
law or equity.
(b) The Company and each of the Investors (i) hereby irrevocably
submits to the exclusive jurisdiction of the United States District Court, the
New York State courts and other courts of the United States sitting in New York
County, New York for the purposes of any suit, action or proceeding arising out
of or relating to this Agreement and (ii) hereby waives, and agrees not to
assert in any such suit action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. The Company and each of the Investors consents
to process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this paragraph shall affect or
limit any right to serve process in any other manner permitted by law.
Section 1.3 Entire Agreement; Amendment. This Agreement, together with
the Registration Rights Agreement, and the agreements and documents executed in
connection herewith and therewith, contains the entire understanding of the
parties with respect to the matters covered hereby and thereby and, except as
specifically set forth herein or therein, neither the Company nor any Investor
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived or amended other than by a
written instrument signed by the party against whom enforcement of any such
amendment or waiver is sought.
Section 6.4 Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be effective upon
actual receipt of such notice. The addresses for such communications shall be:
12
to the Company: Vion Pharmaceuticals, Inc.
0 Xxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx Xxxxx
with copies to: Fulbright & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxx Xxxxxx, Esq.
if to the Investors, to their respective addresses set forth on the
signature pages hereof.
Any party hereto may from time to time change its address for notices by giving
at least 10 days' written notice of such changed address to the other parties
hereto.
Section 6.5 Indemnity. Each party shall indemnify each other party
against any loss, cost or damages (including reasonable attorney's fees but
excluding consequential damages) incurred as a result of such parties' breach of
any representation, warranty, covenant or agreement in this Agreement.
Section 6.6 Waivers. No waiver by any party of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter.
Section 6.7 Headings. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
Section 6.8 Successors and Assigns. Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. The parties hereto may amend
this Agreement without notice to or the consent of any third party. The Company
may not assign this Agreement or any rights or obligations hereunder without the
prior written consent of all Investors (which consent may be withheld for any
reason in their sole discretion). Any Investor may assign this Agreement (in
whole or in part) or any rights or obligations hereunder without the consent of
the Company in connection with any sale or transfer all or any portion of the
Shares held by such Investor, provided that no Investor may assign this
Agreement prior to the Closing Date without the Company's prior written consent
except to an affiliate or affiliates of such Investor.
13
Section 6.9 No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
Section 6.10 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York without regard to such state's principles of conflict of laws.
Section 6.11 Survival. The representations and warranties and the
agreements and covenants of the Company and each Investor contained herein shall
survive the Closing for a period of two (2) years thereafter.
Section 6.12 Execution. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, it
being understood that all parties need not sign the same counterpart.
Section 6.13 Severability. The parties acknowledge and agree that the
Investors are not agents, affiliates or partners of each other, that all
representations, warranties, covenants and agreements of the Investors hereunder
are several and not joint, that no Investor shall have any responsibility or
liability for the representations, warrants, agreements, acts or omissions of
any other Investor, and that any rights granted to "Investors" hereunder shall
be enforceable by each Investor hereunder.
Section 6.14 Like Treatment of Holders. Neither the Company nor any of
its affiliates shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee, payment for the redemptions or
exchange of any Shares, or otherwise, to any holder of Shares, for or as an
inducement to, or in connection with the solicitation of, any consent, waiver or
amendment of any terms or provisions of this Agreement or the Registration
Rights Agreement, unless such consideration is required to be paid to all
holders of Shares bound by such consent, waiver or amendment whether or not such
holders so consent, waive or agree to amend and whether or not such holders
tender their Shares for redemption or exchange.
[Agreement with Xxxxxxx Associates, L.P. and Westgate International, L.P. only:
Section 6.15 Partial Waiver. Effective on the Closing Date, each of
Xxxxxxx Associates, L.P. and Westgate International, L.P. ("Westgate") hereby
partially waives the restriction contained in Section 13 of the Certificate of
Designation of 5% Convertible Preferred Stock Series 1998 so that the 9.9%
ownership limitation described therein shall be increased to 19.9%.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
VION PHARMACEUTICALS, INC.
By:
--------------------------------------
Name:
Title:
INVESTORS:
[ ]
By:
--------------------------------------
Addresses for Notices:
[ ]
By:
--------------------------------------
Addresses for Notices:
15
EXHIBITS AND SCHEDULES
----------------------
Schedule 1.1 Shares Purchased
Schedule 2.1(c) Capitalization
Exhibit 2.1(c)-1 Certificate of Incorporation of the Company
Exhibit 2.1(c)-2 By-laws of the Company
Exhibit 4.2(e) Opinion of Counsel
Exhibit 4.2(f) Registration Rights Agreement
16
