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EXHIBIT 10.1
CONNECTIVE THERAPEUTICS, INC.
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
MAY 15, 1997
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CONNECTIVE THERAPEUTICS, INC.
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
This Common Stock and Warrant Purchase Agreement (the "Agreement") is
entered into as of this 15th day of May, 1997, among Connective Therapeutics,
Inc., a Delaware corporation (the "Company"), Genentech, Inc., a Delaware
corporation ("Genentech"), and the investors listed on Exhibit A attached hereto
(each a "Purchaser" and together the "Purchasers").
SECTION 1
SALE OF COMMON STOCK AND WARRANT
1.1 SALE OF COMMON STOCK. Subject to the terms and conditions hereof,
on the Closing Date, as defined below, the Company will issue and sell, and
Genentech will sell, to each Purchaser, and each Purchaser will severally
purchase from each of the Company and Genentech, the number of whole shares of
Common Stock, par value $0.001 per share, of the Company (the "Common Stock"),
calculated by dividing the dollar amount set forth opposite such Purchaser's
name on Exhibit A by the Purchase Price Per Share. The "Purchase Price Per
Share" shall be the lesser of (a) ninety percent (90%) of the average closing
bid price for the Common Stock as quoted on the Nasdaq National Market System
("NMS") for the twenty (20) trading days ending on the last trading day prior to
the Closing Date or (b) one hundred percent (100%) of the average closing bid
price of the Common Stock as quoted on the NMS for the five (5) trading days
ending on the last trading day prior to the Closing Date.
1.2 ISSUANCE OF WARRANT. Subject to the terms and conditions hereof, on
the Closing Date, as defined below, the Company will issue to each Purchaser,
and each Purchaser will severally acquire from the Company, a warrant
substantially in the form attached hereto as Exhibit B (individually, a
"Warrant" and collectively, the "Warrants") to purchase that number of shares of
the Company's Common Stock equal to fifty percent (50%) of the number of shares
of Common Stock being issued and sold to such Purchaser by the Company, at a per
share exercise price equal to one hundred fifty-percent (150%) of the Purchase
Price Per Share (the "Warrant Exercise Price").
1.3 CLOSING DATE. The closing (the "Closing") of the purchase and sale
of the Common Stock and the Warrants (collectively referred to herein as the
"Securities") shall be held at the offices of Venture Law Group, 0000 Xxxx Xxxx
Xxxx, Xxxxx Xxxx, Xxxxxxxxxx at 10:00 a.m. on May 16, 1997 or at such other time
and place upon which the Company and the Purchasers shall mutually agree (the
date of the Closing is hereinafter referred to as the "Closing Date").
1.4 DELIVERY. At the Closing, (a) each of the Company and Genentech,
respectively, will deliver to each Purchaser a certificate or certificates
representing the shares of Common Stock purchased by such Purchaser, against
payment of the purchase price therefor, by wire
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transfer or certified or cashier's check drawn on a United States ("U.S.") bank,
and (b) the Company will deliver the Warrant issued to such Purchaser.
1.5 LEGEND. The certificate or certificates for the Securities (or in
the case of the Warrants, any shares of Common Stock that may be acquired upon
exercise of such Warrants) shall be subject to a legend restricting transfer
under the Securities Act of 1933, as amended (the "Securities Act") and
referring to restrictions on transfer herein, such legend to be substantially as
follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (A) AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, OR (B) AN OPINION OF COUNSEL
FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR (C) FULL COMPLIANCE WITH THE PROVISIONS OF
RULE 144 UNDER THE ACT."
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchasers that:
2.1 ORGANIZATION. The Company is a corporation duly organized and
validly existing under the laws of the State of Delaware and is in good standing
under such laws. The Company has requisite corporate power and authority to own,
lease and operate its properties and assets, and to carry on its business as
presently conducted and as proposed to be conducted. The Company is qualified to
do business as a foreign corporation in each jurisdiction in which the ownership
of its property or the nature of its business requires such qualification,
except where failure to so qualify would not have a materially adverse effect on
the Company.
2.2 CAPITALIZATION. The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock, $0.001 par value, of which at May
8, 1997, 9,091,763 shares were issued and outstanding, and 5,000,000 shares of
Preferred Stock, $0.001 par value, of which 200 shares of seven percent (7%)
Redeemable Preferred Stock, Series A, are issued and outstanding. The Company's
Board of Directors has also authorized the creation of 90,000 shares of Series B
Preferred Stock for potential issuance under the Company's stockholder rights
plan. Since May 8, 1997 no shares of the Company's Common or Preferred Stock
have been issued, except pursuant to the exercise of options or warrants
outstanding as of May 8, 1997. All such issued and outstanding shares have been
duly authorized and validly issued and are fully paid and nonassessable. In
addition to the foregoing, the Company has reserved and outstanding the
following warrants, rights, options and convertible securities: (i) warrants for
the purchase of 18,395 shares of Common Stock at an exercise
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price of $4.89 per share, which warrants expire in February 2001; (ii) warrants
for the purchase of 22,727 shares of Common Stock at an exercise price of $11.00
per share, which warrants expire in December 2000; (iii) warrants for the
purchase of 73,071 shares of Common Stock at an exercise price of $5.78, which
warrants expire in December 2002; (iv) warrants for the purchase of 20,000
shares of Common Stock at an exercise price of $7.43 per share, which warrants
expire in December, 2001; (v) warrants for the purchase of 250,000 shares of
Common Stock at an exercise price of $8.25 per share, which warrants expire in
January 2002; (vi) 2,000,000 shares reserved for issuance pursuant to the
Company's 1994 Stock Plan, of which, at March 31, 1997, options (net of
repurchases) to purchase 176,713 shares had been exercised, options to purchase
1,823,287 shares were outstanding and 452,511 shares remained available for
future grant; (vii) 88,126 shares reserved for issuance pursuant to the
Company's 1995 Employee Stock Purchase Plan, of which, at March 31, 1997, 11,874
shares had been issued; (viii) 150,000 shares reserved for issuance under the
Company's 1995 Directors' Stock Option Plan, of which, at March 31, 1997, 60,000
options had been granted; and (ix) a commitment from Xxxxxx Capital LLC to
purchase up to $25 million of Common Stock over a three-year period beginning on
or before December 1, 1997. In addition, the Company may be obligated to issue
additional shares to SmithKline Xxxxxxx Corporation on December 31, 1997 as part
of the consideration paid for the Company's acquisition of rights to Ridaura in
December 1996. Except as described in this Section 2.2, there are no other
options, warrants, conversion privileges or other contractual rights presently
outstanding to purchase or otherwise acquire any authorized but unissued shares
of the Company's capital stock or other securities. All of the issued and
outstanding securities of the Company have been issued in compliance with all
applicable federal and state securities laws.
2.3 AUTHORIZATION. The Company has all corporate right, power and
authority to enter into this Agreement and the Registration Rights Agreement
substantially in the form attached hereto as Exhibit E (the "Registration Rights
Agreement") and to consummate the transaction contemplated hereby and thereby.
All corporate action on the part of the Company, its directors and stockholders
necessary for the authorization, execution, delivery and performance of this
Agreement and the Registration Rights Agreement by the Company, and the
authorization, sale, issuance and delivery of the Securities being sold
hereunder by the Company and the performance of the Company's obligations
hereunder and under the Warrants and Registration Rights Agreement has been
taken. This Agreement, the Warrants and the Registration Rights Agreement have
been duly executed and delivered by the Company and constitute legal, valid and
binding obligations of the Company enforceable in accordance with their
respective terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies, and to limitations
of public policy as they may apply to Section 1.8 of the Registration Rights
Agreement. Upon their issuance and delivery pursuant to this Agreement, all of
the Securities being sold by the Company hereunder will be duly and validly
issued, fully paid and nonassessable and free and clear of any liens and
encumbrances. There are no statutory, contractual or other preemptive rights or
rights of first refusal with respect to the issuance and sale of the Securities
or the shares of Common Stock issuable upon exercise of the Warrants.
2.4 VALIDITY OF SECURITIES. The Common Stock and Warrants, when issued,
sold and delivered by the Company in accordance with the terms of this
Agreement, will be duly and validly issued, fully-paid and nonassessable. Based
in part upon the representations of the
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Purchasers in this Agreement, the offer, sale and issuance of the Common Stock
and Warrants will be made in compliance with all applicable federal and state
securities laws. The shares of Common Stock issuable upon exercise of the
Warrants have been duly and validly reserved and, upon issuance in accordance
with the terms of the Warrants, will be duly and validly issued, fully-paid and
nonassessable, and will be issued in compliance with all applicable federal and
states securities laws.
2.5 NO CONFLICT. The execution and delivery of this Agreement, the
Warrants and the Registration Rights Agreement do not, and the consummation of
the transactions contemplated hereby and thereby will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of time,
or both), or give rise to a right of termination, cancellation or acceleration
of any obligation or to a loss of a material benefit, under, any provision of
the Certificate of Incorporation or Bylaws of the Company or any mortgage,
indenture, lease or other agreement or instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company, its properties or assets, which conflict,
violation, default or right would have a material adverse effect on the
business, properties, prospects or financial condition of the Company.
2.6 ACCURACY OF REPORTS; FINANCIAL STATEMENTS. All reports required to
be filed with the Securities and Exchange Commission (the "SEC") by the Company
from February 1, 1996 (the date of the Company's initial public offering)
through the date of this Agreement under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), copies of which have been made available to each
Purchaser (the "SEC Documents"), have been duly and timely filed, were in
substantial compliance with the requirements of their respective forms when
filed, were complete and correct in all material respects as of the dates at
which the information was furnished, and contained (as of such dates) no untrue
statement of a material fact nor omitted to state a material fact necessary in
order to make the statements made therein in light of the circumstances in which
made not misleading. The financial statements of the Company included in the SEC
Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto. The Financial Statements have
been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the consolidated financial position of
the Company and any subsidiaries at the dates thereof and the consolidated
results of operations and consolidated cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal, recurring
adjustments).
2.7 CHANGES. Since April 28, 1997, (the date on which Amendment No. 2
to the Company's Annual Report on Form 10-K for the year ended December 31, 1996
was filed with the SEC), there has not been (a) any incurrence by the Company of
any material liability, absolute or contingent, or (b) any event or condition of
any character that has materially and adversely affected or might materially and
adversely affect the business, properties, prospects or financial condition of
the Company (as such business is presently conducted and as it is proposed to be
conducted), except that on April 29, 1997 the Company's Board of Directors
adopted a stockholder rights plan. There is no material liability or contingency
of the Company that is not disclosed in the SEC Documents.
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2.8 GOVERNMENTAL CONSENTS, ETC. No consent, approval or authorization
of or designation, declaration or filing with any governmental authority on the
part of the Company is required in connection with the valid execution and
delivery of this Agreement, the Warrants or the Registration Rights Agreement,
or the consummation of any other transaction contemplated hereby and thereby,
except such filings as may be required to be made with the SEC, the National
Association of Securities Dealers, Inc. ("NASD") and with governmental
authorities for purposes of effecting compliance with the securities and blue
sky laws in the states in which Securities are offered and/or sold, which
compliance will be effected in accordance with such laws.
2.9 LITIGATION. There is no pending or, to the best of the Company's
knowledge, threatened lawsuit, administrative proceeding, arbitration, labor
dispute or governmental investigation ("Litigation") to which the Company is a
party or by which any material portion of its assets, taken as a whole, may be
bound, nor is the Company aware of any basis therefor, which Litigation, if
adversely determined, would have a material adverse effect on the business,
properties, prospects or financial condition of the Company.
2.10 PATENTS AND TRADEMARKS. To its knowledge, and except as disclosed
in the SEC Documents, the Company owns or possesses sufficient legal rights to
all patents, trademarks, service marks, tradenames, copyrights, trade secrets,
licenses, information and proprietary rights and processes necessary for its
business as now conducted and as proposed to be conducted, without infringment
of any rights of a third party. The Company has not received any communications
alleging that the Company has violated or, by conducting its business as
proposed, would violate any of the patents, trademarks, service marks,
tradenames, copyrights, trade secrets or other proprietary rights or processes
of any other person or entity, which violation would have a material adverse
effect on the business, properties, prospects or financial condition of the
Company. Except as disclosed in the SEC Documents, the Company has not granted
(nor has the Company licensed from a third party) any material rights to or
licenses to its patents, trademarks, service marks, tradenames, copyrights,
trade secrets or other proprietary rights or processes.
2.11 REGISTRATION RIGHTS. The Company is not presently under any
obligation and has not granted any rights to register its securities under the
Securities Act with respect to any of its presently outstanding securities,
which rights would be implicated with respect to the registration contemplated
by the Registration Rights Agreement and which rights have not been waived by
the holders thereof.
2.12 NO MATERIAL DEFAULT. The Company is not in violation of or default
under any provision of (a) its Certificate of Incorporation or Bylaws or (b) any
mortgage, indenture, lease or other agreement or instrument, permit, concession,
franchise or license to which it is a party or by which it is bound or (c) any
federal or state judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company, except with respect to clauses (b) and (c)
above, such violations or defaults as would not have a material adverse effect
on the business, properties, prospects or financial condition of the Company.
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2.13 DISCLOSURE. No representation or warranty of the Company contained
in this Agreement or the exhibits attached hereto (when read together and taken
as a whole), contains any untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements contained herein or
therein in light of the circumstances under which they were made not misleading.
2.14 SOLVENCY; NO DEFAULT. As of this date the Company has sufficient
funds and cash flow to pay its debts and other liabilities as they become due,
and the Company is not in default with respect to any material debt or
liability.
2.15 ORIGINAL ISSUANCE TO GENENTECH. With regard to the shares being
sold by Genentech to the Purchasers (the "Genentech Shares"), the Company issued
the Genentech Shares to Genentech in a transaction exempt from the registration
requirements of the Act and such shares were not subsequently registered under
the Act for resale. The Genentech Shares were duly and validly authorized,
issued and delivered by the Company and are fully paid. To the best of the
Company's knowledge after investigation, Genentech is not a person (either alone
or together with others) directly or indirectly controlling or controlled by the
Company or under direct or indirect common control with the Company within the
meaning of the Act.
2.16 RIGHTS OF COMMON STOCK. The shares of Common Stock sold to the
Purchasers hereunder, including the shares issuable upon exercise of the
Warrants, and the Genentech Shares shall have the rights, preferences,
privileges and restrictions provided in the Company's Amended and Restated
Certificate of Incorporation.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF GENENTECH
Genentech hereby represents and warrants to the Purchasers as follows:
3.1 AUTHORIZATION. Genentech has all corporate right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. All corporate action on the part of Genentech, its
directors and stockholders necessary for the authorization, execution, delivery
and performance of this Agreement by Genentech, and authorization, sale and
delivery of the Common Stock to be sold by Genentech hereunder, has been taken.
This Agreement has been duly executed and delivered by Genentech and constitutes
a legal, valid and binding obligation of Genentech, enforceable in accordance
with its terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies.
3.2 NO CONFLICT. The execution and delivery of this Agreement by
Genentech does not, and, the consummation of the transactions contemplated
hereby will not, conflict with, or result in any violation of, or default (with
or without notice or lapse of time, or both), or give rise to a right of
termination, cancellation or acceleration of any obligation or to a loss of a
material benefit, under, any provision of the Certificate of Incorporation or
Bylaws of Genentech or any mortgage, indenture, lease or other agreement or
instrument, permit, concession,
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franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Genentech, its properties or assets, the effect of
which would have a material adverse effect on Genentech or materially impair or
restrict its power to perform its obligations as contemplated hereby.
3.3 OWNERSHIP. Genentech is the record and beneficial owner and holder
of the Common Stock being sold by it hereunder, free and clear of all
liabilities, liens, encumbrances, voting trusts, conditional sale or title
retention agreements, shareholders agreements, equities, charges, option, or
other burdens (collectively, "Encumbrances"), and upon transfer to the
Purchasers hereunder on the completion of the transactions contemplated by this
Agreement, the Common Stock being sold by Genentech will be owned by the
Purchasers, free and clear of all of Encumbrances, other than Encumbrances
arising as a result of Purchasers' ownership thereof.
3.4 SELLING FOR OWN ACCOUNT. Genentech is acting solely on its own
behalf and for its own account in selling the Common Stock to the Purchasers.
3.5 ORIGINAL ACQUISITION OF SHARES. Genentech acquired the Genentech
Shares on July 11, 1994 in connection with the grant of a license to certain
technology to the Company. Genentech has held the Genentech Shares for
investment purposes only and has made no prior offer (other than under this
Agreement) to sell the Genentech Shares.
3.6 RULE 144. Genentech has held the Genentech Shares for a sufficient
period of time to allow the Genentech Shares to be resold under Rule 144(k) of
the Act. Genentech is not an "affiliate" of the Company as defined under Rule
144(a)(1) of the Act.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser hereby represents and warrants to the Company and
Genentech as follows:
4.1 INVESTMENT. Purchaser will acquire the Securities purchased from
the Company and Genentech pursuant to this Agreement for investment for its own
account, not as a nominee or agent and not with a view to or for resale in
connection with any distribution thereof. Purchaser understands that the
Securities purchased by such Purchaser from the Company and Genentech pursuant
to this Agreement have not been registered under the Securities Act by reason of
a specific exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of such Purchaser's
investment intent and the accuracy of such Purchaser's representations as
expressed herein.
4.2 ACCREDITED INVESTOR. Each Purchaser is an "accredited investor" as
defined by Rule 501(a) of the Securities Act of 1933, as amended (the
"Securities Act"). The SEC documents have been made available to each Purchaser,
and each Purchaser has received all the information it has requested regarding
the Company. Each Purchaser has such business and
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financial experience as is required to give it the capacity to protect its own
interests in connection with the purchase of the Securities.
4.3 AUTHORITY. This Agreement and the Registration Rights Agreement
have been duly executed and delivered by each Purchaser and constitute legal,
valid and binding obligations of the Purchasers, enforceable in accordance with
their respective terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable remedies, and to
limitations of public policy as they may apply to Section 1.7 of the
Registration Rights Agreement. The execution and delivery of this Agreement and
the Registration Rights Agreement do not, and the consummation of the
transactions contemplated hereby and thereby will not, conflict with or result
in any violation of any obligation under any judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to the Purchasers.
4.4 GOVERNMENT CONSENTS, ETC. No consent, approval or authorization of
or designation, declaration or filing with any governmental authority on the
part of the Purchasers is required in connection with the valid execution and
delivery of this Agreement, or the offer, sale or issuance of the Securities, or
the consummation of any other transaction contemplated hereby.
4.5 INVESTIGATION. Each Purchaser has had a reasonable opportunity to
discuss the Company's business, management and financial affairs with the
Company's management.
SECTION 5
CONDITIONS TO OBLIGATIONS OF THE PURCHASERS
The obligations of each Purchaser to the Company and Genentech under
this Agreement are subject to the fulfillment, on or before the Closing, of each
of the following conditions, unless otherwise waived:
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 2 and Genentech in Section 3 shall be
true and correct in all material respects on the Closing Date with the same
effect as though such representations and warranties had been made on and as of
the Closing Date.
5.2 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company and Genentech on or prior to the
Closing Date shall have been performed or complied with in all material
respects.
5.3 NO ORDER PENDING. There shall not then be in effect any order
enjoining or restraining the transactions contemplated by this Agreement.
5.4 NO LAW PROHIBITING OR RESTRICTING SALE. There shall not be in
effect any law, rule or regulation prohibiting or restricting such sale, or
requiring any consent or approval of any person which shall not have been
obtained to issue the Securities (except as otherwise referenced in this
Agreement).
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5.5 COMPLIANCE CERTIFICATE. Each of the Company and Genentech shall
have delivered to the Purchasers a certificate substantially in the form
attached hereto as Exhibit C and Exhibit D, hereto, respectively executed by a
duly authorized officer, dated the Closing Date, and certifying to the
fulfillment of the conditions specified in Sections 5.1 and 5.2.
5.6 REGISTRATION RIGHTS AGREEMENT. On or before the Closing, the
Company and the Purchasers shall have executed and delivered a counterpart of
the Registration Rights Agreement.
5.7 OPINION OF COMPANY COUNSEL. The Purchasers shall have received from
Venture Law Group, counsel for the Company, an opinion, dated as of the Closing,
substantially in the form attached hereto as Exhibit F.
SECTION 6
CONDITIONS TO OBLIGATIONS OF THE COMPANY AND GENENTECH
The obligations of the Company and Genentech under this Agreement are
subject to the fulfillment on or prior to the Closing of each of the following
conditions, unless otherwise waived:
6.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Purchasers in Section 4 hereof shall be true and correct
in all material respects on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of the
Closing Date.
6.2 PERFORMANCE. 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 NO ORDER PENDING. There shall not then be in effect any order
enjoining or restraining the transactions contemplated by this Agreement.
6.4 NO LAW PROHIBITING OR RESTRICTING SUCH SALE. There shall not be in
effect any law, rule or regulation prohibiting or restricting such sale, or
requiring any consent or approval of any person which shall not have been
obtained to issue the Securities (except as otherwise provided in this
Agreement).
SECTION 7
MISCELLANEOUS
7.1 GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.
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7.2 SURVIVAL. Unless otherwise set forth in this Agreement, the
warranties, representations and covenants of the Company, Genentech and the
Purchasers contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing.
7.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.
7.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Warrants, the
Registration Rights Agreement and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subject matter hereof and thereof and supersede all prior
agreements and understandings among the parties relating to the subject matter
hereof. Neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the party
against which enforcement of any such amendment, waiver, discharge or
termination is sought.
7.5 NOTICES AND DATES. Unless otherwise provided herein, any notice
required or permitted by this Agreement shall be in writing and shall be deemed
sufficient upon delivery, when delivered personally or by overnight courier and
addressed to the party to be notified at such party's address as set forth on
Exhibit A hereto or as subsequently modified by written notice. In the event
that any date provided for in this Agreement falls on a Saturday, Sunday or
legal holiday, such date shall be deemed extended to the next business day.
7.6 BROKERS.
(a) Neither the Company nor Genentech has engaged, consented
to or authorized any broker, finder or intermediary to act on its behalf,
directly or indirectly, as a broker, finder or intermediary in connection with
the transactions contemplated by this Agreement. The Company and Genentech
hereby agree to, on a pro-rata basis, indemnify and hold harmless the Purchasers
from and against all fees, commissions or other payments owing to any party
acting on behalf of the Company and/or Genentech hereunder.
(b) No Purchaser has engaged, consented to or authorized any
broker, finder or intermediary to act on its behalf, directly or indirectly, as
a broker, finder or intermediary in connection with the transactions
contemplated by this Agreement. Each Purchaser hereby agrees to indemnify and
hold harmless the Company and Genentech from and against all fees, commissions
or other payments owing to any party acting on behalf of such Purchaser
hereunder.
7.7 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
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7.8 COSTS AND EXPENSES. Each party hereto shall pay its own costs and
expenses incurred in connection herewith, including the fees of its counsel,
auditors and other representatives, whether or not the transactions contemplated
herein are consummated.
7.9 NO THIRD PARTY RIGHTS. Nothing in this Agreement shall create or be
deemed to create any rights in any person or entity not a party to this
Agreement.
7.10 PUBLICITY. The Purchasers, Genentech and the Company shall not
issue any public statement concerning the transactions contemplated by this
Agreement without the reasonable prior written consent of the parties named in
such public statement; provided, however, that the parties may disclose the
transaction or the terms hereof or thereof from time to time without the
approval of the party whose name is disclosed if (i) such approval has been
requested and not received and such party concludes (after consulting with
counsel) that it is required by law to disclose the transaction or the terms
thereof or (ii) to the extent that similar disclosure has been previously
approved pursuant to this Section 7.10.
7.11 CAPTIONS AND HEADINGS. The captions and headings used herein are
for convenience and ease of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
7.12 COUNTERPARTS. This Agreement may be executed in counterparts, and
each such counterpart shall be deemed an original for all purposes.
7.13 EXPENSES. Upon Closing, the Company shall reimburse the reasonable
fees and expenses of special counsel to the Purchasers, excluding New York Life
Insurance Company (not to exceed $10,000). Irrespective of whether the Closing
is effected, the Company shall pay all costs and expenses that it incurs with
respect to the negotiation, execution, delivery and performance of the
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date aforesaid.
CONNECTIVE THERAPEUTICS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Its: President and Chief Executive Officer
--------------------------------------
GENENTECH, INC.
By: /s/ Genentech, Inc.
---------------------------------------
Its: Executive Vice President and CFO
-------------------------------------
PURCHASERS:
DOMAIN PARTNERS III, L.P.
By: One Xxxxxx Square Associates III, L.P.
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
---------------------------------------
General Partner
DP III ASSOCIATES, L.P.
By: One Xxxxxx Square Associates III, L.P.
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
---------------------------------------
General Partner
NEW YORK LIFE INSURANCE COMPANY
By: /s/ Xxxxxxxxx Xxxxx
---------------------------------------
Its: Director, Private Finance
--------------------------------------
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/s/ Xxxxx Xxxx
------------------------------------------
Xxxxx Xxxx
DLJ CAPITAL CORPORATION
By: /s/ Xxxxxxxx X. XxXxxxx
------------------------------------------
Xxxxxxxx X. Xx Xxxxx
Attorney-In-Fact
SPROUT CAPITAL VII, L.P.
By: DLJ Capital Corporation
Managing General Partner
By: /s/ Xxxxxxxx X. XxXxxxx
------------------------------------------
Xxxxxxxx X. Xx Xxxxx
Attorney-In-Fact
THE SPROUT CEO FUND, L.P.
By: DLJ Capital Corporation
its General Partner
By: /s/ Xxxxxxxx X. XxXxxxx
------------------------------------------
Xxxxxxxx X. Xx Xxxxx
Attorney-In-Fact
DLJ FIRST ESC L.L.C.
By: DLJ LBO Plans Management
Corporation
Its: Manager
By: /s/ Xxxxxxxx X. XxXxxxx
------------------------------------------
Xxxxxxxx X. Xx Xxxxx
Attorney-In-Fact
15
SPROUT GROWTH II, L.P.
By: DLJ Capital Corporation
Managing General Partner
By: /s/ Xxxxxxxx X. XxXxxxx
------------------------------------------
Xxxxxxxx X. Xx Xxxxx
Attorney-In-Fact
/s/ Xxxxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx
-------------------------------------------
Xxxxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx
BIOTECHNOLOGY INVESTMENTS LIMITED
By: Old Court Limited
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------------
Secretary
Xxxxxxxxx Asset Management
(CI) Limited
Attorney-in-Fact
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EXHIBIT A
SCHEDULE OF PURCHASERS
Number of Securities Warrants to Purchase
of Common Stock* Common Stock**
-------------------- --------------------
DLJ Capital Corporation 26,524 12,396
Sprout Capital VII, L.P. 638,037 298,201
The Sprout CEO Fund, L.P. 7,412 3,464
Sprout Growth II, L.P. 521,618 243,790
DLJ First ESC L.L.C. 132,621 61,984
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Biotechnology Investments Limited 133,353 62,326
c/o Domain Associates
Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Domain Partners III, L.P. 128,899 60,244
Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
DP III Associates, L.P. 4,454 2,081
Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
New York Life Insurance Company 266,706 124,651
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxxx
Investment Department
Venture Capital
Room 207
Fax: (000) 000-0000
cc: Attn: Xxxxxx xx Xxxxxxx Xxxxxxx
Xxxxxxxxxx Xxxxxxx,
Xxxx 0000
Fax: (000) 000-0000
17
Xxxxx Xxxx, M.D. 51,368 24,008
c/o Massachusetts General Hospital
Molecular Biology, Xxxxxxx 9
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Xxxxxxxxx X. Xxxxxx and 25,365 11,855
Xxxxx X. Xxxxxx
c/o Kleiner Xxxxxxx Xxxxxxxx & Xxxxx
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000-0000
--------- -------
TOTAL 1,936,357 905,000
----------
* Purchase price per share of Common Stock is $6.05
** Exercise price of Warrants is $9.08
