Exhibit 10.28
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of December 12, 1997 by and between
BIOCHEM PHARMA INC., a Quebec corporation (the "PURCHASER"), and SCRIPTGEN
PHARMACEUTICALS, INC., a Delaware corporation (the "Company"). Capitalized
terms used herein shall have the meanings given to such terms in Section VII
hereof.
WHEREAS, on the date hereof, pursuant to that certain Stock Purchase
Agreement (the "PURCHASE AGREEMENT"), by and between the Purchaser and the
Company, the Purchaser is purchasing from the Company such number of shares of
Series D Convertible Preferred Stock, par value $.01 per share, of the Company,
convertible, immediately following the Closing, into 20% of the shares of the
Company's Common Stock outstanding on a fully-diluted basis. Capitalized terms
not defined herein shall have the meanings ascribed to such terms in the
Purchase Agreement; and
WHEREAS, the Purchaser is acquiring from the Company a warrant in the
form attached as Exhibit 1 hereto (the "WARRANT"), representing the right to
purchase from the Company 1,428,258 Warrant Shares (as adjusted from time to
time pursuant to the provisions of the Warrant) on the terms and conditions set
forth in the Warrant; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
I. PURCHASE PRICE AND CLOSING.
A. CLOSING. The closing of the issuance of the Warrant to the Purchaser
(the "CLOSING") shall take place simultaneously with the closing pursuant to the
Purchase Agreement. The date of such Closing is hereinafter referred to as the
"CLOSING DATE."
B. TRANSACTIONS ON CLOSING DATE. At the Closing, the Company shall
deliver to the Purchaser the duly issued Warrant.
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to the Purchaser as follows:
A. GOOD STANDING. The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware.
B. AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has all requisite
corporate power and authority to enter into and perform its obligations under
this Agreement and to issue and deliver the Warrant to the Purchaser. The
execution, delivery, and performance by the Company of its obligations under
this Agreement, including the issuance and delivery of the Warrant to the
Purchaser, have been duly authorized by all necessary corporate action on the
part of the Company. This
Agreement has been duly executed and delivered by the Company and (assuming due
execution and delivery by the Purchaser) is a legal, valid, and binding
obligation of The Company and is enforceable against the Company in accordance
with its terms.
C. NO CONFLICT OR VIOLATION. The execution and delivery of this
Agreement by the Company, the performance by the Company of its terms and the
issuance and delivery of the Warrant to the Purchaser will not on the Closing
Date conflict with or result in a violation of (i) the Certificate of
Incorporation or By-Laws of the Company as in effect on the Closing Date, or
(ii) any agreement, instrument, law, rule, regulation, order, writ, judgment, or
decree to which the Company is a party or is subject, except for such conflicts
and violations which will not, in the aggregate, have a material adverse effect
on the business, operations, assets or condition (financial or otherwise) of the
Company and will not deprive the Purchaser of any material benefit under this
Agreement.
D. VALIDITY OF ISSUANCE. The Warrant to be issued to the Purchaser
pursuant to this Agreement and the Warrant Shares issued upon exercise of the
Warrant will, when issued, be duly and validly issued, fully paid and
nonassessable (assuming in the case of the Warrant Shares, payment of the
exercise price is made in accordance with the terms of the Warrant). The
Warrant Shares issuable upon exercise of the Warrant represent five percent (5%)
on a fully diluted basis of the Common Stock Deemed Outstanding immediately
after the Closing Date.
III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser hereby
represents and warrants to the Company as follows:
A. INVESTMENT INTENTION. The Purchaser is acquiring the Warrant, and if
any portion of the Warrant is exercised, the Warrant Shares, for investment
solely for its own account and not with a view to, or for resale in connection
with, the distribution or other disposition thereof. The Purchaser agrees and
acknowledges that it will not, directly or indirectly, offer, transfer, or sell
the Warrant or any Warrant Shares, or solicit any offers to purchase or acquire
the Warrant or any Warrant Shares, unless the transfer or sale is (i) pursuant
to an effective registration statement under the Securities Act of 1933, as
amended, and the rules and regulations thereunder (the "SECURITIES ACT") and has
been registered under any applicable state securities or "blue sky" laws, or
(ii) pursuant to an exemption from registration under the Securities Act and
applicable state securities or "blue sky" laws.
B. LEGEND. The Purchaser has been advised by the Company that the
certificates representing the Warrant will bear the following legend and that
the certificates representing the Warrant Shares will bear a similar legend:
THE SECURITY REPRESENTED BY THIS CERTIFICATE WAS ORIGINALLY ISSUED ON
DECEMBER ___, 1997, AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THE TRANSFER OF SUCH SECURITY IS SUBJECT TO
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THE CONDITIONS SPECIFIED IN THE WARRANT AGREEMENT, DATED AS OF DECEMBER __,
1997 (AS AMENDED AND MODIFIED FROM TIME TO TIME), BETWEEN THE ISSUER HEREOF
(THE "COMPANY") AND THE INITIAL HOLDER HEREOF, AND THE COMPANY RESERVES THE
RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITY UNTIL SUCH CONDITIONS HAVE
BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. UPON WRITTEN REQUEST, A COPY
OF SUCH CONDITIONS SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF
WITHOUT CHARGE.
Upon reasonable request of the Company in connection with any transfer of the
Warrant or any Warrant Shares (other than a transfer pursuant to a public
offering registered under the Securities Act, pursuant to Rule 144 or Rule 144A
promulgated under the Securities Act (or any similar rules then in effect), or
to an affiliate of the Purchaser), the Purchaser will deliver, if requested by
the Company, an opinion of counsel knowledgeable in securities laws reasonably
satisfactory to the Company to the effect that such transfer may be effected
without registration under the Securities Act. The Company agrees to issue
certificates evidencing the Warrant Shares that do not contain such legend upon
receipt of an opinion of counsel, which opinion and counsel shall be reasonably
satisfactory to the Company, to the effect that registration under the
Securities Act is not required because of the availability of an exemption from
such registration.
C. ADDITIONAL INVESTMENT REPRESENTATIONS. The Purchaser is an
"accredited investor" as such term is defined in Rule 501 promulgated under the
Securities Act.
IV. MISCELLANEOUS
A. DEFINITIONS. For the purposes of this Agreement, the following terms
shall have the following meanings:
"COMMON STOCK" means the Company's Common Stock, par value $.01 per share,
and any securities into which such Common Stock is hereafter converted or
exchanged.
"WARRANT SHARES" means shares of the Common Stock obtained or obtainable
upon exercise of the Warrant; PROVIDED, that if there is a change such that the
securities issuable upon exercise of the Warrants are issued by an entity other
than the Company or there is a change in the class of securities so issuable,
then the term "Warrant Shares" shall mean shares of the security issuable upon
exercise of the Warrants if such security is issuable in shares, or shall mean
the equivalent units in which such security is issuable if such security is not
issuable in shares.
B. OTHER AGREEMENTS. The parties hereto acknowledge that upon the
exercise of the Warrant, the Warrant Shares and the holders thereof shall be
subject to the terms and conditions of each of the Stockholders Agreement and
the Registration
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Rights Agreement, each dated as of the date hereof, by and among the Company,
the Purchaser, and certain other stockholders of the Company, in each case as
may be amended, modified, or restated from time to time.
C. NOTICES. All notices and other communications provided for herein
shall be dated and in writing and shall be deemed to have been duly given
(i) when delivered, if delivered personally, sent by registered or certified
mail, return receipt requested and postage prepaid, or sent via nationally
recognized overnight courier or via facsimile, and (ii) when received if
delivered otherwise, to the party to whom it is directed:
TO THE COMPANY:
SCRIPTGEN Pharmaceuticals, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
WITH COPIES (WHICH SHALL NOT CONSTITUTE NOTICE TO THE COMPANY) TO:
Xxxxxx, XxXxxxxxx & Fish, LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxxxxx Xxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
TO PURCHASER:
BioChem Pharma Inc.
000 Xxxxxx-Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxx X0X 0X0
Xxxxxx
Attention: Vice President, Legal Affairs
Facsimile No.: (000) 000-0000
WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE TO PURCHASER) TO:
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
or to such other address as either party hereto shall have specified by notice
in writing to the others.
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D. ASSIGNMENT. This Agreement and all the provisions hereof shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that neither this Agreement
nor any rights or obligations hereunder shall be assigned by the Company without
the prior written consent of the Purchaser.
E. AMENDMENT. This Agreement may be amended only by a written instrument
signed by the Company and the Purchaser.
F. WAIVER. Either party hereto may (a) extend the time for the
performance of any of the obligations or other acts of the other party hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto, and (c) waive compliance
with any of the agreements or conditions herein. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid as to such party if
set forth in an instrument in writing signed by such party.
G. SEVERABILITY. In the event that any one or more of the provisions
hereof, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired, it being intended
that all rights, powers and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
H. AMALGAMATION. The Company acknowledges that Purchaser has advised it
that it proposes to carry out a reorganization, including an amalgamation,
pursuant to which, among other things, a corporation named BioChem Holdings Inc.
(the "Successor") will own all of the assets and be liable for all liabilities
of Purchaser (the "Amalgamation"). The Company hereby agrees that, upon
consummation of the Amalgamation, the Successor shall have all of the rights and
obligations of Purchaser as if Successor had executed this Agreement on the date
hereof in lieu of Purchaser, and that neither Purchaser nor Successor shall be
required to send any notice of any kind regarding the Amalgamation nor seek the
consent of the Company to such Amalgamation.
I. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS OR CHOICE OF LAWS OF THE STATE
OF NEW YORK OR ANY OTHER JURISDICTION WHICH WOULD RESULT IN THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THOSE OF THE STATE OF NEW YORK.
J. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement.
K. DESCRIPTIVE HEADINGS. The headings in this Agreement are for
convenience
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of reference only and shall not limit or otherwise affect the meaning of the
terms contained herein.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement
to be signed and attested by its duly authorized officers under its corporate
seal and to be dated as of the date hereof.
SCRIPTGEN PHARMACEUTICALS, INC.
By /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: President and Chief
Executive Officer
BIOCHEM PHARMA, INC.
By /s/ Xxxxxxxx Xxxxxxx
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Name: Xxxxxxxx Xxxxxxx
Title: Executive Vice President
By /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
Title: Vice President
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