PRIVATE EQUITY LINE AGREEMENT
by and between
KINGSBRIDGE CAPITAL LIMITED
and
CYTOGEN CORPORATION
dated as of October 23, 1998
TABLE OF CONTENTS
Page
ARTICLE I
CERTAIN DEFINITIONS . . . . . . . . . . 1
Section 1.1 [RESERVED] . . . . . . . . . . . . . . . . 1
Section 1.2 "Average Daily Trading Volume" . . . . . . 1
Section 1.3 "Bid Price". . . . . . . . . . . . . . . . 1
Section 1.4 "Blackout Shares". . . . . . . . . . . . . 2
Section 1.5 "Capital Shares" . . . . . . . . . . . . . 2
Section 1.6 "Closing". . . . . . . . . . . . . . . . . 2
Section 1.7 "Closing Date" . . . . . . . . . . . . . . 2
Section 1.8 "Commitment Period". . . . . . . . . . . . 2
Section 1.9 "Common Stock" . . . . . . . . . . . . . . 2
Section 1.10 "Common Stock Equivalents" . . . . . . . . 2
Section 1.11 "Condition Satisfaction Date". . . . . . . 2
Section 1.12 "Damages". . . . . . . . . . . . . . . . . 2
Section 1.13 "Discount" . . . . . . . . . . . . . . . . 2
Section 1.14 "Effective Date" . . . . . . . . . . . . . 2
Section 1.15 "Escrow Agreement" . . . . . . . . . . . . 2
Section 1.16 "Exchange Act" . . . . . . . . . . . . . . 3
Section 1.17 "Floor Price". . . . . . . . . . . . . . . 3
Section 1.18 "Investment Amount". . . . . . . . . . . . 3
Section 1.19 "Legend" . . . . . . . . . . . . . . . . . 3
Section 1.20 "Market Price" . . . . . . . . . . . . . . 3
Section 1.21 "Maximum Commitment Amount" . . . . . . . 3
Section 1.22 "Minimum Commitment Amount" . . . . . . . 3
Section 1.23 "Material Adverse Effect". . . . . . . . . 3
Section 1.24 "Maximum Put Amount" . . . . . . . . . . . 3
Section 1.25 "Minimum Put Amount" . . . . . . . . . . . 3
Section 1.26 "NASD" . . . . . . . . . . . . . . . . . . 3
Section 1.27 "Outstanding". . . . . . . . . . . . . . . 3
Section 1.28 "Person" . . . . . . . . . . . . . . . . . 3
Section 1.29 "Preferred Stock". . . . . . . . . . . . . 4
Section 1.30 "Principal Market" . . . . . . . . . . . . 4
Section 1.31 "Purchase Price" . . . . . . . . . . . . . 4
Section 1.32 "Put". . . . . . . . . . . . . . . . . . . 4
Section 1.33 "Put Date" . . . . . . . . . . . . . . . . 4
Section 1.34 "Put Notice" . . . . . . . . . . . . . . . 4
Section 1.35 "Put Shares" . . . . . . . . . . . . . . . 4
Section 1.36 "Registrable Securities" . . . . . . . . . 4
Section 1.37 "Registration Rights Agreement". . . . . . 5
Section 1.38 "Registration Statement" . . . . . . . . . 5
Section 1.39 "Regulation D" . . . . . . . . . . . . . . 5
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Section 1.40 "SEC". . . . . . . . . . . . . . . . . . . 5
Section 1.41 "Section 4(2)" . . . . . . . . . . . . . . 5
Section 1.42 "Securities Act" . . . . . . . . . . . . . 5
Section 1.43 "SEC Documents". . . . . . . . . . . . . . 5
Section 1.44 "Subscription Date . . . . . . . . . . . . 5
Section 1.45 "Trading Cushion". . . . . . . . . . . . . 5
Section 1.46 "Trading Day". . . . . . . . . . . . . . . 5
Section 1.47 "Underwriter" . . . . . . . . . . . . . . 5
Section 1.48 "Valuation Event". . . . . . . . . . . . . 5
Section 1.49 "Valuation Period" . . . . . . . . . . . . 6
Section 1.50 "Warrant". . . . . . . . . . . . . . . . . 6
Section 1.51 "Warrant Shares" . . . . . . . . . . . . . 7
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK; TERMINATION OF
OBLIGATIONS; WARRANT; BLACKOUT SHARES. . . . . . 7
Section 2.1 Investments. . . . . . . . . . . . . . . . 7
Section 2.2 Mechanics. . . . . . . . . . . . . . . . . 7
Section 2.3 Closings . . . . . . . . . . . . . . . . . 8
Section 2.4 Termination of Investment Obligation . . . 8
Section 2.5 The Warrant. . . . . . . . . . . . . . . . 8
Section 2.6 Blackout Shares. . . . . . . . . . . . . . 8
Section 2.7 Liquidated Damages . . . . . . . . . . . . 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INVESTOR . . . . 9
Section 3.1 Intent . . . . . . . . . . . . . . . . . . 9
Section 3.2 Sophisticated Investor . . . . . . . . . . 9
Section 3.3 Authority. . . . . . . . . . . . . . . . . 9
Section 3.4 Not an Affiliate . . . . . . . . . . . . . 9
Section 3.5 Organization and Standing. . . . . . . . . 9
Section 3.6 Absence of Conflicts . . . . . . . . . . . 10
Section 3.7 Disclosure; Access to Information. . . . . 10
Section 3.8 Manner of Sale . . . . . . . . . . . . . . 10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . 10
Section 4.1 Organization of the Company. . . . . . . . 10
Section 4.2 Authority. . . . . . . . . . . . . . . . . 10
Section 4.3 Capitalization . . . . . . . . . . . . . . 11
Section 4.4 Common Stock . . . . . . . . . . . . . . . 11
Section 4.5 SEC Documents. . . . . . . . . . . . . . . 11
Section 4.6 Exemption from Registration; Valid
Issuances. . . . . . . . . . . . . . . . . 12
Section 4.7 No General Solicitation or Advertising in
Regard to this Transaction . . . . . . . . 12
ii
Section 4.8 Corporate Documents. . . . . . . . . . . . 12
Section 4.9 No Conflicts . . . . . . . . . . . . . . . 12
Section 4.10 No Material Adverse Change . . . . . . . . 13
Section 4.11 No Undisclosed Liabilities . . . . . . . . 13
Section 4.12 No Undisclosed Events or Circumstances . . 13
Section 4.13 No Integrated Offering . . . . . . . . . . 13
Section 4.14 Litigation and Other Proceedings . . . . . 13
Section 4.15 No Misleading or Untrue Communication. . . 14
Section 4.16 Material Non-Public Information. . . . . . 14
ARTICLE V
COVENANTS OF THE INVESTOR. . . . . . . . . 14
ARTICLE VI
COVENANTS OF THE COMPANY. . . . . . . . . 15
Section 6.1 Registration Rights. . . . . . . . . . . . 15
Section 6.2 Reservation of Common Stock. . . . . . . . 15
Section 6.3 Listing of Common Stock. . . . . . . . . . 15
Section 6.4 Exchange Act Registration. . . . . . . . . 15
Section 6.5 Legends. . . . . . . . . . . . . . . . . . 16
Section 6.6 Corporate Existence. . . . . . . . . . . . 16
Section 6.7 Additional SEC Documents . . . . . . . . . 16
Section 6.8 Notice of Certain Events Affecting
Registration; Suspension of Right
to Make a Put. . . . . . . . . . . . . . . 16
Section 6.9 Expectations Regarding Put Notices . . . . 16
Section 6.10 Consolidation; Merger. . . . . . . . . . . 17
Section 6.11 Issuance of Put Shares, Warrant Shares
and Blackout Shares. . . . . . . . . . . . 17
Section 6.12 Legal Opinion on Subscription Date . . . . 17
Section 6.13 No Other Equity Lines. . . . . . . . . . . 17
ARTICLE VII
CONDITIONS TO DELIVERY OF
PUT NOTICES AND CONDITIONS TO CLOSING. . . . . . 17
Section 7.1 Conditions Precedent to the Obligation of
the Company to Issue and Sell
Common Stock . . . . . . . . . . . . . . . 17
Section 7.2 Conditions Precedent to the Right of the
Company to Deliver a Put Notice and
the Obligation of the Investor to
Purchase Put Shares. . . . . . . . . . . . 18
Section 7.3 Due Diligence Review; Non-Disclosure of
Non-Public Information . . . . . . . . . . 20
ARTICLE VIII
LEGENDS . . . . . . . . . . . . . 21
Section 8.1 Legends. . . . . . . . . . . . . . . . . . 21
Section 8.2 No Other Legend or Stock Transfer
Restrictions . . . . . . . . . . . . . . . 22
iii
Section 8.3 Investor's Compliance. . . . . . . . . . . 23
ARTICLE IX
INDEMNIFICATION . . . . . . . . . . . 23
Section 9.1 Indemnification. . . . . . . . . . . . . . 23
Section 9.2 Method of Asserting Indemnification
Claims . . . . . . . . . . . . . . . . . . 23
ARTICLE X
MISCELLANEOUS. . . . . . . . . . . . 27
Section 10.1 Fees and Expenses. . . . . . . . . . . . . 27
Section 10.2 Reporting Entity for the Common Stock. . . 27
Section 10.3 Brokerage. . . . . . . . . . . . . . . . . 27
Section 10.4 Notices. . . . . . . . . . . . . . . . . . 28
Section 10.5 Assignment . . . . . . . . . . . . . . . . 29
Section 10.6 Amendment; No Waiver . . . . . . . . . . . 29
Section 10.7 Annexes and Exhibits; Entire Agreement . . 29
Section 10.8 Termination; Survival. . . . . . . . . . . 29
Section 10.9 Severability . . . . . . . . . . . . . . . 30
Section 10.10 Title and Subtitles. . . . . . . . . . . . 30
Section 10.11 Counterparts . . . . . . . . . . . . . . . 30
Section 10.12 Choice of Law. . . . . . . . . . . . . . . 30
PRIVATE EQUITY LINE AGREEMENT
by and between
KINGSBRIDGE CAPITAL LIMITED
and
CYTOGEN CORPORATION
dated as of October 23, 1998
This PRIVATE EQUITY LINE AGREEMENT is entered into as of the
23rd day of October, 1998 (this "Agreement"), by and between
KINGSBRIDGE CAPITAL LIMITED (the "Investor"), an entity organized
and existing under the laws of the British Virgin Islands, and
CYTOGEN CORPORATION a corporation organized and existing under the
laws of the State of Delaware (the "Company").
iv
WHEREAS, the parties desire that, upon the terms and subject
to the conditions contained herein, the Company shall issue and
sell to the Investor, from time to time as provided herein, and the
Investor shall purchase, up to $12,000,000 of the Common Stock (as
defined below); and
WHEREAS, such investments will be made in reliance upon the
provisions of Section 4(2) ("Section 4(2)") and Regulation D
("Regulation D") of the United States Securities Act of 1933, as
amended and the rules and regulations promulgated thereunder (the
"Securities Act"), and/or upon such other exemption from the
registration requirements of the Securities Act as may be available
with respect to any or all of the investments in Common Stock to be
made hereunder.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 [RESERVED]
Section 1.2 "Average Daily Trading Volume" shall mean, with
respect to any date, the average of the daily trading volumes for
the Common Stock on the Principal Market for twenty-six (26) of
the thirty (30) Trading Days immediately preceding such date, after
removing the Trading Days with the two (2) highest trading volumes
and the Trading Days with the two (2) lowest trading volumes.
Section 1.3 "Bid Price" shall mean, with respect to any
Trading Day, the closing bid price on such Trading Day (as reported
by Nasdaq) of the Common Stock on the Principal Market.
Section 1.4 "Blackout Shares" shall have the meaning
assigned to them in Section 2.6.
Section 1.5 "Capital Shares" shall mean the Common Stock
and any shares of any other class of common stock whether now or
hereafter authorized, having the right to participate in the
distribution of dividends (as and when declared) and assets (upon
liquidation of the Company).
Section 1.6 "Closing" shall mean one of the closings of a
purchase and sale of the Common Stock pursuant to Section 2.1.
Section 1.7 "Closing Date" shall mean, with respect to a
Closing, the fifth Trading Day following the Put Date related to
such Closing, provided all conditions to such Closing have been
satisfied on or before such Trading Day.
Section 1.8 "Commitment Period" shall mean the period
commencing on the earlier to occur of (i) the Effective Date or
(ii) such earlier date as the Company and the Investor may mutually
agree in writing, and expiring on the earlier to occur of (x) the
date on which the Investor shall have purchased Put Shares pursuant
to this Agreement for an aggregate Purchase Price equal to the
Maximum Commitment Amount, (y) the date this Agreement is
V
terminated pursuant to Section 2.4, or (z) the date occurring
twenty four (24) months from the date of commencement of the
Commitment Period.
Section 1.9 "Common Stock" shall mean the Company's common
stock, $0.01 par value per share.
Section 1.10 "Common Stock Equivalents" shall mean any
securities that are convertible into or exchangeable for Common
Stock or any warrants, options or other rights to subscribe for or
purchase Common Stock or any such convertible or exchangeable
securities.
Section 1.11 "Condition Satisfaction Date" shall have the
meaning set forth in Section 7.2 of this Agreement.
Section 1.12 "Damages" shall mean any loss, claim, damage,
liability, costs and expenses (including, without limitation,
reasonable attorneys' fees and disbursements and costs and expenses
of expert witnesses and investigation).
Section 1.13 "Discount" shall mean fifteen percent (15%).
Section 1.14 "Effective Date" shall mean the date on which
the SEC first declares effective a Registration Statement
registering resale of the Registrable Securities as set forth in
Section 7.2(a).
Section 1.15 "Escrow Agreement" shall mean the escrow
agreement in the form of Exhibit A entered into pursuant to Section
7.2(o) hereof.
Section 1.16 "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended and the rules and regulations
promulgated thereunder.
Section 1.17 "Floor Price" shall mean seventy-five cents
($0.75) per share.
Section 1.18 "Investment Amount" shall mean the dollar
amount (within the range specified in Section 2.2) to be invested
by the Investor to purchase Put Shares with respect to any Put
Notice as provided by the Company to the Investor in accordance
with Section 2.2 hereof.
Section 1.19 "Legend" shall have the meaning specified in
Section 8.1.
Section 1.20 "Market Price" on any given date shall mean the
average of the lowest intra-day prices of the Common Stock over the
Valuation Period. "Lowest intra-day price" shall mean the lowest
price of the Common Stock (as reported by Bloomberg L.P.) during
any Trading Day.
Section 1.21 "Maximum Commitment Amount" shall mean
$12,000,000.
Section 1.22 "Minimum Commitment Amount" shall mean
$3,000,000.
vi
Section 1.23 "Material Adverse Effect" shall mean any effect
on the business, operations, properties or financial condition of
the Company that is material and adverse to the Company or to the
Company and such other entities controlled by the Company, taken as
a whole, and/or any condition, circumstance, or situation that
would prohibit or otherwise interfere with the ability of the
Company to enter into and perform its obligations under any of (i)
this Agreement, (ii) the Registration Rights Agreement, (iii) the
Escrow Agreement and (iv) the Warrant.
Section 1.24 "Maximum Put Amount" shall mean with respect to
any Put the amount determined in accordance with the table set
forth on Annex A hereto.
Section 1.25 "Minimum Put Amount" shall mean $150,000.
Section 1.26 "NASD" shall mean the National Association of
Securities Dealers, Inc.
Section 1.27 "Outstanding" when used with reference to
Common Shares or Capital Shares (collectively the "Shares"), shall
mean, at any date as of which the number of such Shares is to be
determined, all issued and outstanding Shares, and shall include
all such Shares issuable in respect of outstanding scrip or any
certificates representing fractional interests in such Shares;
provided, however, that "Outstanding" shall not refer to any such
Shares then directly or indirectly owned or held by or for the
account of the Company.
Section 1.28 "Person" shall mean an individual, a
corporation, a partnership, an association, a trust or other entity
or organization, including a government or political subdivision or
an agency or instrumentality thereof.
Section 1.29 "Principal Market" shall mean the Nasdaq
National Market, the Nasdaq SmallCap Market, the American Stock
Exchange or the New York Stock Exchange, whichever is at the time
the principal trading exchange or market for the Common Stock.
Section 1.30 "Purchase Price" shall mean, with respect to a
Put, the Market Price on a the applicable Put Date (or such other
date on which the Purchase Price is calculated in accordance with
the terms and conditions of this Agreement) less the product of the
Discount and the Market Price.
Section 1.31 "Put" shall mean each occasion the Company
elects to exercise its right to tender a Put Notice requiring the
Investor to purchase a specified amount of the Company's Common
Stock, subject to the terms and conditions of this Agreement.
Section 1.32 "Put Date" shall mean the Trading Day during
the Commitment Period that a Put Notice to sell Common Stock to the
Investor is deemed delivered pursuant to Section 2.2(b) hereof.
Section 1.33 "Put Notice" shall mean a written notice to the
Investor setting forth the Investment Amount that the Company
intends to require the Investor to purchase pursuant to the terms
of this Agreement.
vii
Section 1.34 "Put Shares" shall mean all shares of Common
Stock issued or issuable pursuant to a Put that has been exercised
or may be exercised in accordance with the terms and conditions of
this Agreement.
Section 1.35 "Registrable Securities" shall mean the (i) Put
Shares, (ii) the Warrant Shares, (iii) the Blackout Shares and (iv)
any securities issued or issuable with respect to any of the
foregoing by way of exchange, stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. As to any
particular Registrable Securities, once issued such securities
shall cease to be Registrable Securities when (w) the Registration
Statement has been declared effective by the SEC and all
Registrable Securities have been disposed of pursuant to the
Registration Statement, (x) all Registrable Securities have been
sold under circumstances under which all of the applicable
conditions of Rule 144 (or any similar provision then in force)
under the Securities Act ("Rule 144") are met, (y) such time as all
Registrable Securities have been otherwise transferred to holders
who may trade such shares without restriction under the Securities
Act, and the Company has delivered a new certificate or other
evidence of ownership for such securities not bearing a restrictive
legend or (z) in the opinion of counsel to the Company, which
counsel shall be reasonably acceptable to the Investor, all
Registrable Securities may be sold without registration or the need
for an exemption from any registration requirements and without any
time, volume or manner limitations pursuant to Rule 144(k) (or any
similar provision then in effect) under the Securities Act.
Section 1.36 "Registration Rights Agreement" shall mean the
registration rights agreement in the form of Exhibit B hereto.
Section 1.37 "Registration Statement" shall mean a
registration statement on Form S-3 (if use of such form is then
available to the Company pursuant to the rules of the SEC and, if
not, on such other form promulgated by the SEC for which the
Company then qualifies and which counsel for the Company shall deem
appropriate and which form shall be available for the resale of the
Registrable Securities to be registered thereunder in accordance
with the provisions of this Agreement, the Registration Rights
Agreement, and the Warrant and in accordance with the intended
method of distribution of such securities), for the registration of
the resale by the Investor of the Registrable Securities under the
Securities Act.
Section 1.38 "Regulation D" shall have the meaning set forth
in the recitals of this Agreement.
Section 1.39 "SEC" shall mean the Securities and Exchange
Commission.
Section 1.40 "Section 4(2)" shall have the meaning set forth
in the recitals of this Agreement.
Section 1.41 "Securities Act" shall have the meaning set
forth in the recitals of this Agreement.
viii
Section 1.42 "SEC Documents" shall mean the Company's latest
Form 10-K as of the time in question, all Forms 10-Q and 8-K filed
thereafter, and the Proxy Statement for its latest fiscal year as
of the time in question until such time the Company no longer has
an obligation to maintain the effectiveness of a Registration
Statement as set forth in the Registration Rights Agreement.
Section 1.43 "Subscription Date" shall mean the date on
which this Agreement is executed and delivered by the parties
hereto.
Section 1.44 "Trading Cushion" shall mean the mandatory
twenty (20) Trading Days between Put Dates.
Section 1.45 "Trading Day" shall mean any day during which
the Principal Market shall be open for business.
Section 1.46 "Underwriter" shall mean any underwriter
participating in any disposition of the Registrable Securities on
behalf of the Investor pursuant to the Registration Statement.
Section 1.47 "Valuation Event" shall mean an event in which
the Company at any time during a Valuation Period takes any of the
following actions:
(a) subdivides or combines its Common Stock;
(b) pays a dividend in its Capital Stock or makes any
other distribution of its Capital Shares, except for
dividends paid or distributions made in respect of
preferred stock;
(c) issues any additional Capital Shares ("Additional
Capital Shares"), otherwise than as provided in the
foregoing Subsections (a) and (b) above, at a price per
share less, or for other consideration lower, than the
Bid Price in effect immediately prior to such issuance,
or without consideration;
(d) issues any warrants, options or other rights to
subscribe for or purchase any Additional Capital Shares
and the price per share for which Additional Capital
Shares may at any time thereafter be issuable pursuant to
such warrants, options or other rights shall be less than
the Bid Price in effect immediately prior to such
issuance;
(e) issues any securities convertible into or
exchangeable for Capital Shares and the consideration per
share for which Additional Capital Shares may at any time
thereafter be issuable pursuant to the terms of such
convertible or exchangeable securities shall be less than
the Bid Price in effect immediately prior to such
issuance;
ix
(f) makes a distribution of its assets or evidences of
indebtedness to the holders of its Capital Shares as a
dividend in liquidation or by way of return of capital
(except for dividends paid or distributions made in
respect of preferred stock) or other than as a dividend
payable out of earnings or surplus legally available for
dividends under applicable law or any distribution to
such holders made in respect of the sale of all or
substantially all of the Company's assets (other than
under the circumstances provided for in the foregoing
subsections (a) through (e); or
(g) takes any action affecting the number of Outstanding
Capital Shares, other than an action described in any of
the foregoing Subsections (a) through (f) hereof,
inclusive, which in the opinion of the Company's Board of
Directors, determined in good faith, would have a
materially adverse effect upon the rights of the Investor
at the time of a Put or exercise of the Warrant.
Section 1.48 "Valuation Period" shall mean the period of
five (5) Trading Days during which the Purchase Price of the Common
Stock is valued, which period shall be with respect to the Purchase
Price on any Put Date, the two (2) Trading Day preceding and the
two (2) Trading Days following the Trading Day on which the
applicable Put Notice is deemed to be delivered, as well as the
Trading Day on which such notice is deemed to be delivered;
provided, however, that if a Valuation Event occurs during any
Valuation Period, a new Valuation Period shall begin on the Trading
Day immediately after the occurrence of such Valuation Event and
end on the fifth Trading Day thereafter.
Section 1.49 "Warrant" shall mean the Warrant in the form of
Exhibit C hereto issued pursuant to Section 2.5 of this Agreement.
Section 1.50 "Warrant Shares" shall mean all shares of
Common Stock issued or issuable pursuant to exercise of the
Warrant.
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK; TERMINATION OF
OBLIGATIONS; WARRANT; BLACKOUT SHARES
Section 2.1 Investments.
(a) Puts. Upon the terms and conditions set forth
herein (including, without limitation, the provisions of
Article VII hereof), on any Put Date the Company may
exercise a Put by the delivery of a Put Notice. The
number of Put Shares that the Investor shall receive
pursuant to such Put shall be determined by dividing the
Investment Amount specified in the Put Notice by the
Purchase Price with respect to such Put Date.
(b) Minimum Amount of Puts. The Company shall, in
accordance with Section 2.2(a), issue and sell Put Shares
to the Investor and the Investor shall purchase Put
Shares from the Company totaling (in aggregate Purchase
x
Prices) at least the Minimum Commitment Amount. If the
Company for any reason fails to issue and deliver such
Put Shares during the Commitment Period, on the first
Trading Day after the expiration of the Commitment
Period, the Company shall wire to the Investor a sum in
immediately available funds equal to the product of (X)
the Minimum Commitment Amount minus the aggregate
Investment Amounts of the Put Shares delivered to the
Investor hereunder and (Y) the Discount; provided,
however, that if the Investor's obligation to purchase
Common Stock hereunder or this Agreement is terminated
pursuant to Section 2.4 hereof, the Discount shall be
increased by five (5) percentage points for the purposes
of this Section.
(c) Maximum Amount of Puts. Unless the Company obtains
the requisite approval of its shareholders in accordance
with the corporate laws of Delaware and the applicable
rules of the Principal Market (unless a waiver is
obtained therefrom), no more than 19.9% of the
Outstanding shares of Common Stock may be issued and sold
pursuant to Puts.
Section 2.2 Mechanics.
(a) Put Notice. At any time during the Commitment
Period, the Company may deliver a Put Notice to the
Investor, subject to the conditions set forth in Section
7.2; provided, however, the Investment Amount for each
Put as designated by the Company in the applicable Put
Notice shall be neither less than the Minimum Put Amount
nor more than the Maximum Put Amount.
(b) Date of Delivery of Put Notice. A Put Notice shall
be deemed delivered on (i) the Trading Day it is received
by facsimile or otherwise by the Investor if such notice
is received prior to 12:00 noon New York time, or (ii)
the immediately succeeding Trading Day if it is received
by facsimile or otherwise after 12:00 noon New York time
on a Trading Day or at any time on a day which is not a
Trading Day. No Put Notice may be deemed delivered, on a
day that is not a Trading Day.
Section 2.3 Closings. On each Closing Date for a Put, (i)
the Company shall deliver into escrow one or more certificates, at
the Investor's option, representing the Put Shares to be purchased
by the Investor pursuant to Section 2.1 herein, registered in the
name of the Investor and (ii) the Investor shall deliver into
escrow the Investment Amount specified in the Put Notice by wire
transfer of immediately available funds to the account provided for
in the Escrow Agreement. In addition, on or prior to such Closing
Date, each of the Company and the Investor shall deliver to the
other all documents, instruments and writings required to be
delivered or reasonably requested by either of them pursuant to
this Agreement in order to implement and effect the transactions
contemplated herein. Payment of the Investment Amount to the
Company and delivery of such certificate(s) to the Investor shall
occur out of escrow in accordance with the Escrow Agreement;
provided, however, that to the extent the Company has not paid the
fees, expenses and disbursements of the Investor's counsel in
accordance with Section 12.1, the amount of such fees, expenses and
disbursements shall be paid in immediately available funds, at the
direction of the Investor, to Investor's counsel with no reduction
in the number of Put Shares issuable to the Investor on such
xi
Closing Date; provided, further, that so long as the Investor shall
maintain professional liability, errors and omissions liability
and/or directors' and officers' liability insurance for its
activities related to the Put Shares, the Warrant Shares or the
Blackout Shares, three percent (3%) of such Investment Amount shall
be either (i) retained by the Investor in respect of such insurance
or (ii) paid in immediately available funds, at the direction of
the Investor in respect of such insurance, in either case, with no
reduction in the number of Put Shares issuable to the Investor on
such Closing Date. Notwithstanding anything to the contrary in
this Section 2.3, if the Purchase Price calculated for a Valuation
Period with respect to any Put is less than sixty-five percent
(65%) of the Bid Price on the Put Date with respect to such Put,
then either party may, upon delivery by facsimile transmission of
written notice to the other party within one (1) Trading Day after
such Valuation Period, cancel the Closing in respect of such Put
and all of the rights and obligations of the parties with respect
to such Put shall terminate effective immediately prior to such Put
Date.
Section 2.4 Termination of Investment Obligation. This
Agreement and the Investor's obligation to purchase shares of
Common Stock hereunder shall automatically terminate (including
with respect to any Put, notice of which has been given but the
applicable Closing Date has not yet occurred) and the Investor may,
at its sole discretion, terminate this Agreement in the event that
(i) the Registration Statement is not effective within ninety (90)
days following the date required therefor in the Registration
Rights Agreement; (ii) there shall occur any stop order or
suspension of the effectiveness of the Registration Statement for
an aggregate of thirty (30) Trading Days during the Commitment
Period, for any reason other than deferrals or suspension during a
Blackout Period in accordance with the Registration Rights
Agreement, as a result of corporate developments subsequent to the
Subscription Date that would require such Registration Statement to
be amended to reflect such event in order to maintain its
compliance with the disclosure requirements of the Securities Act
or (iii) the Company shall at any time fail to comply with the
requirements of Section 6.3, 6.4, 6.5 or 6.6.
Section 2.5 The Warrant. On the Subscription Date, the
Company shall issue the Warrant to the Investor. The Warrant shall
be delivered by the Company to the Investor upon execution of this
Agreement by the parties hereto. The Warrant Shares shall be
registered for resale pursuant to the Registration Rights
Agreement.
Section 2.6 Blackout Shares. In the event that, (a) within
five (5) Trading Days following any Closing Date, the Company gives
a Blackout Notice to the Investor of a Blackout Period in
accordance with the Registration Rights Agreement, and (b) the Bid
Price on the Trading Day immediately preceding such Blackout Period
("Old Bid Price") is greater than the Bid Price on the first
Trading Day following such Blackout Period that the Investor may
sell its Registrable Securities pursuant to an effective
Registration Statement ("New Bid Price"), then the Company shall
issue to the Investor the number of additional shares of
Registrable Securities (the "Blackout Shares") equal to the
difference between (X) the product of the number of Registrable
Securities held by Investor immediately prior to the Blackout
Period multiplied by the Old Bid Price, divided by the New Bid
Price, and (Y) the number of Registrable Securities held by
Investor immediately prior to the Blackout Period.
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Section 2.7 Liquidated Damages. The parties hereto
acknowledge and agree that the sum payable under Section 2.1(b) and
the requirement to issue Blackout Shares under Section 2.6 above
shall give rise to liquidated damages and not penalties. The
parties further acknowledge that (a) the amount of loss or damages
likely to be incurred is incapable or is difficult to precisely
estimate, (b) the amounts specified in such Sections bear a
reasonable proportion and are not plainly or grossly
disproportionate to the probable loss likely to be incurred by the
Investor in connection with the failure by the Company to make Puts
with aggregate Purchase Prices totalling at least the Minimum
Commitment Amount or in connection with a Blackout Period under the
Registration Rights Agreement, and (c) the parties are
sophisticated business parties and have been represented by
sophisticated and able legal and financial counsel and negotiated
this Agreement at arm's length.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INVESTOR
The Investor represents and warrants to the Company that:
Section 3.1 Intent. The Investor is entering into this
Agreement for its own account and the Investor has no present
arrangement (whether or not legally binding) at any time to sell
the Common Stock to or through any person or entity; provided,
however, that by making the representations herein, the Investor
does not agree to hold the Common Stock for any minimum or other
specific term and reserves the right to dispose of the Common Stock
at any time in accordance with federal and state securities laws
applicable to such disposition.
Section 3.2 Sophisticated Investor. The Investor is a
sophisticated investor (as described in Rule 506(b)(2)(ii) of
Regulation D) or an accredited investor (as defined in Rule 501 of
Regulation D), and Investor has such experience in business and
financial matters that it is capable of evaluating the merits and
risks of an investment in Common Stock. The Investor acknowledges
that an investment in the Common Stock is speculative and involves
a high degree of risk.
Section 3.3 Authority. Each of this Agreement, the
Registration Rights Agreement, and the Escrow Agreement has 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. Each of this Agreement, the
Registration Rights Agreement, and the Escrow Agreement was validly
executed and delivered by the Investor and each is a valid and
binding agreement of the Investor enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
insolvency, or similar laws relating to, or affecting generally the
enforcement of, creditors' rights and remedies or by other
equitable principles of general application.
Section 3.4 Not an affiliate. The Investor is not an
officer, director or "affiliate" (as that term is defined in Rule
405 of the Securities Act) of the Company.
Section 3.5 Organization and Standing. Investor is duly
organized, validly existing, and in good standing under the laws of
the British Virgin Islands.
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Section 3.6 Absence of Conflicts. The execution and
delivery of this Agreement and any other document or instrument
contemplated hereby, and the consummation of the transactions
contemplated thereby, and compliance with the requirements thereof,
will not (a) violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on Investor, or, to
the Investor's knowledge, (b) violate any provision of any
indenture, instrument or agreement to which Investor is a party or
is subject, or by which Investor or any of its assets is bound, (c)
conflict with or constitute a material default thereunder, (d)
result in the creation or imposition of any lien pursuant to the
terms of any such indenture, instrument or agreement, or constitute
a breach of any fiduciary duty owed by Investor to any third party,
or (e) require the approval of any third-party (that has not been
obtained) pursuant to any material contract to which Investor is
subject or to which any of its assets, operations or management may
be subject.
Section 3.7 Disclosure; Access to Information. Investor
has received all documents, records, books and other information
pertaining to Investor's investment in the Company that have been
requested by Investor. The Investor has reviewed or received copies
of the SEC Documents.
Section 3.8 Manner of Sale. At no time was Investor
presented with or solicited by or through any leaflet, public
promotional meeting, television advertisement or any other form of
general solicitation or advertising.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor that:
Section 4.1 Organization of the Company. The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite power
and authority to own, lease and operate its properties and to carry
on its business as now being conducted. Except as set forth in the
SEC Documents, the Company does not own more than fifty percent
(50%) of the outstanding capital stock of or control any other
business entity. 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.
Section 4.2 Authority. (i) The Company has the requisite
corporate power and authority to enter into and perform its
obligations under this Agreement, the Registration Rights
Agreement, the Warrant and the Escrow Agreement and to issue the
Put Shares, the Warrant, the Warrant Shares and the Blackout
Shares; (ii) the execution and delivery of this Agreement and the
Registration Rights Agreement, and the execution, issuance and
delivery of the Warrant, by the Company and the consummation by it
of the transactions contemplated hereby and thereby 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; and (iii) each of this Agreement and the
Registration Rights Agreement has been duly executed and delivered,
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and the Warrant has been duly executed, issued and delivered, by
the Company and constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their
respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and
remedies or by other equitable principles of general application.
Section 4.3 Capitalization. As of September 30, 1998, the
authorized capital stock of the Company consisted of 89,600,000
shares of Common Stock, of which 58,603,000 shares were issued and
outstanding. Except as set forth on Schedule 4.3 hereof, there are
no options, warrants, or rights to subscribe to, securities, rights
or obligations convertible into or exchangeable for or giving any
right to subscribe for any shares of capital stock of the Company.
All of the outstanding shares of Common Stock of the Company have
been duly and validly authorized and issued and are fully paid and
nonassessable.
Section 4.4 Common Stock. The Company has registered its
Common Stock pursuant to Section 12(b) or 12(g) of the Exchange Act
and is in full compliance with all reporting requirements of the
Exchange Act, and the Company has maintained all requirements for
the continued listing or quotation of its Common Stock, and such
Common Stock is currently listed or quoted on the Principal Market.
As of the date hereof, the Principal Market is the Nasdaq National
Market ("Nasdaq").
Section 4.5 SEC Documents. The Company has delivered or
made available to the Investor true and complete copies of the SEC
Documents (including, without limitation, proxy information and
solicitation materials). The Company has not provided to the
Investor any information that, according to applicable law, rule or
regulation, should have been disclosed publicly prior to the date
hereof 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 Securities Act or the
Exchange Act, as the case may be, 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 financial statements of the Company included in
the SEC Documents comply as to form and substance 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).
xv
Section 4.6 Exemption from Registration; Valid Issuances.
The sale and issuance of the Warrant, the Warrant Shares, the Put
Shares and any Blackout Shares in accordance with the terms and on
the bases of the representations and warranties set forth in this
Agreement, may and shall be properly issued pursuant to Rule 4(2),
Regulation D and/or any applicable state law. When issued and paid
for as herein provided, the Put Shares, the Warrant Shares and any
Blackout Shares shall be duly and validly issued, fully paid, and
nonassessable. Neither the sales of the Put Shares, the Warrant,
the Warrant Shares or any Blackout Shares pursuant to, nor the
Company's performance of its obligations under, this Agreement, the
Registration Rights Agreement, or the Warrant shall (i) result in
the creation or imposition of any liens, charges, claims or other
encumbrances upon the Put Shares, the Warrant Shares, any Blackout
Shares or any of the assets of the Company, or (ii) entitle the
holders of Outstanding Capital Shares to preemptive or other rights
to subscribe to or acquire the Capital Shares or other securities
of the Company. The Put Shares, the Warrant Shares and any
Blackout Shares shall not subject the Investor to personal
liability by reason of the ownership thereof.
Section 4.7 No General Solicitation or Advertising in
Regard to this Transaction. Neither the Company nor any of its
affiliates nor any distributor or any person acting on its or their
behalf (i) has conducted or will conduct any general solicitation
(as that term is used in Rule 502(c) of Regulation D) or general
advertising with respect to any of the Put Shares, the Warrant, the
Warrant Shares or any Blackout Shares, or (ii) made any offers or
sales of any security or solicited any offers to buy any security
under any circumstances that would require registration of the
Common Stock under the Securities Act.
Section 4.8 Corporate Documents. The Company has furnished
or made available to the Investor true and correct copies of the
Company's Certificate of Incorporation, as amended and in effect on
the date hereof (the "Certificate"), and the Company's By-Laws, as
amended and in effect on the date hereof (the "By-Laws").
Section 4.9 No Conflicts. The execution, delivery and
performance of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby, including
without limitation the issuance of the Put Shares, the Warrant, the
Warrant Shares and the Blackout Shares do not and will not (i)
result in a violation of the Certificate or By-Laws or (ii)
conflict with, or constitute a material default (or an event that
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 material agreement, indenture,
instrument or any "lock-up" or similar provision of any
underwriting or similar agreement to which the Company is a party,
or (iii) 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 by which any property or asset of the Company 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) nor is the Company otherwise in violation
of, conflict with or in default under any of the foregoing;
provided, however, that for purposes of the Company's
representations and warranties as to violations of foreign law,
rule or regulation referenced in clause (iii), such representations
and warranties are made only to the best of the Company's knowledge
insofar as the execution, delivery and performance of this
xvii
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby are or may be affected by the
status of the Investor under or pursuant to any such foreign law,
rule or regulation. The business of the Company is not being
conducted in violation of any law, ordinance or regulation of any
governmental entity, except for possible violations that either
singly or in the aggregate do not and will not have a Material
Adverse Effect. The Company is not required under federal, state
or local 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 or
issue and sell the Common Stock or the Warrant in accordance with
the terms hereof (other than any SEC, NASD or state securities
filings that may be required to be made by the Company subsequent
to any Closing, any registration statement that may be filed
pursuant hereto, and any shareholder approval required by the rules
applicable to companies whose common stock trades on Nasdaq);
provided that, for purposes of the representation made in this
sentence, the Company is assuming and relying upon the accuracy of
the relevant representations and agreements of the Investor herein.
Section 4.10 No Material Adverse Change. Since December 31, 1997,
no event has occurred that would have a Material Adverse Effect on the
Company, except as disclosed in the SEC Documents.
Section 4.11 No Undisclosed Liabilities. The Company has no
liabilities or obligations that are material, individually or in
the aggregate, and that are not disclosed in the SEC Documents or
otherwise publicly announced, other than those incurred in the
ordinary course of the Company's businesses since December 31, 1997
and which, individually or in the aggregate, do not or would not have a
Material Adverse Effect on the Company.
Section 4.12 No Undisclosed Events or Circumstances. Since
December 31, 1997, no event or circumstance has occurred or exists
with respect to the or its businesses, properties, operations or
financial condition, that, under applicable law, rule or regulation,
requires public disclosure or announcement prior to the date hereof
by the Company but which has not been so publicly announced or
disclosed in the SEC Documents.
Section 4.13 No Integrated Offering. Neither the Company,
nor any of its affiliates, nor any person acting on its or their
behalf has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, other than
pursuant to this Agreement, under circumstances that would require
registration of the Common Stock under the Securities Act.
Section 4.14 Litigation and Other Proceedings. Except as
may be set forth in the SEC Documents, there are no lawsuits or
proceedings pending or to the best knowledge of the Company
threatened, against the Company, nor has the Company received any
written or oral notice of any such action, suit, proceeding or
investigation, which might have a Material Adverse Effect. Except
as set forth in the SEC Documents, no judgment, order, writ,
xvii
injunction or decree or award has been issued by or, so far as is
known by the Company, requested of any court, arbitrator or
governmental agency which might result in a Material Adverse
Effect.
Section 4.15 No Misleading or Untrue Communication. The
Company and any duly authorized Person representing the Company in
connection with the transactions contemplated by this Agreement,
have not made, at any time, any oral communication in connection
with the offer or sale of the same which contained any untrue
statement of a material fact or omitted to state any material fact
necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading.
Section 4.16 Material Non-Public Information. The Company
is not in possession of, nor has the Company or its agents
disclosed to the Investor, any material non-public information that
(i) if disclosed, would, or could reasonably be expected to have,
a material effect on the price of the Common Stock or (ii)
according to applicable law, rule or regulation, should have been
disclosed publicly by the Company prior to the date hereof but
which has not been so disclosed.
ARTICLE V
COVENANTS OF THE INVESTOR
Section 5.1 Compliance with Law. The Investor's trading
activities with respect to shares of the Company's Common Stock
will be in compliance with all applicable state and federal
securities laws, rules and regulations and the rules and
regulations of the Principal Market on which the Company's Common
Stock is listed.
Section 5.2 Limitation on Short Sales. The Investor and
its affiliates shall not engage in short sales of the Company's
Common Stock; provided, however, that the Investor may enter into
any short sale or other hedging or similar arrangement it deems
appropriate with respect to Put Shares after it receives a Put
Notice with respect to such Put Shares so long as such sales or
arrangements do not involve more than the number of such Put Shares
(as determined by the Investor as of the date of such Put Notice).
ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1 Registration Rights. The Company shall cause
the Registration Rights Agreement to remain in full force and
effect and the Company shall comply in all respects with the terms
thereof.
Section 6.2 Reservation of Common Stock. As of the date
hereof, the Company has available and the Company shall reserve and
keep available at all times, free of preemptive rights, shares of
Common Stock for the purpose of enabling the Company to satisfy any
obligation to issue the Put Shares, the Warrant Shares and the
Blackout Shares; such amount of shares of Common Stock to be
reserved shall be calculated based upon the minimum Purchase Price
xviii
for the Put Shares under the terms and conditions of this Agreement
and the Exercise price of the Warrant and a good faith estimate by
the Company in consultation with the investor of the number of
Blackout Shares that will need to be issued. The number of shares
so reserved from time to time, as theretofore increased or reduced
as hereinafter provided, may be reduced by the number of shares
actually delivered hereunder.
Section 6.3 Listing of Common Stock. The Company shall
maintain the listing of the Common Stock on a Principal Market, and
as soon as practicable (but in any event prior to the commencement
of the Commitment Period) will cause the Put Shares and the Warrant
Shares to be listed on the Principal Market. The Company further
shall, if the Company applies to have the Common Stock traded on
any other Principal Market, include in such application the Put
Shares, the Warrant Shares and any Blackout Shares, and shall take
such other action as is necessary or desirable in the opinion of
the Investor to cause the Common Stock to be listed on such other
Principal Market as promptly as possible. The Company shall take
use its best efforts to continue the listing and trading of its
Common Stock on the Principal Market (including, without
limitation, maintaining sufficient net tangible assets) and will
comply in all respects with the Company's reporting, filing and
other obligations under the bylaws or rules of the NASD and the
Principal Market.
Section 6.4 Exchange Act Registration. The Company shall
(i) cause its Common Stock to continue to be registered under
Section 12(g) or 12(b) of the Exchange Act, will comply in all
respects with its reporting and filing obligations under said Act,
and will not take any action or file any document (whether or not
permitted by said Act or the rules thereunder) to terminate or
suspend such registration or to terminate or suspend its reporting
and filing obligations under said Act.
Section 6.5 Legends. The certificates evidencing the Put
Shares, the Warrant Shares and the Blackout Shares shall be free of
legends, except as provided for in Article VIII.
Section 6.6 Corporate Existence. The Company shall take
all steps necessary to preserve and continue the corporate
existence of the Company.
Section 6.7 Additional SEC Documents. The Company shall
deliver to the Investor, as and when the originals thereof are
submitted to the SEC for filing, copies of all SEC Documents so
furnished or submitted to the SEC.
Section 6.8 Notice of Certain Events Affecting
Registration; Suspension of Right to Make a Put. The Company shall
immediately notify the Investor upon the occurrence of any of the
following events in respect of a registration statement or related
prospectus in respect of an offering of Registrable Securities:
(i) receipt of any request for additional information by the SEC or
any other federal or state governmental authority during the period
of effectiveness of the registration statement or for amendments or
supplements to the registration statement or related prospectus;
(ii) the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the
effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose; (iii) receipt of any notification
xix
with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding
for such purpose; (iv) the happening of any event that makes any
statement made in such Registration Statement or related prospectus
or any document incorporated or deemed to be incorporated therein
by reference untrue in any material respect or that requires the
making of any changes in the registration statement, related
prospectus or documents so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
and that in the case of the related prospectus, it will not contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; and (v) the Company's
reasonable determination that a post-effective amendment to the
registration statement would be appropriate, and the Company shall
promptly make available to the Investor any such supplement or
amendment to the related prospectus. The Company shall not deliver
to the Investor any Put Notice during the continuation of any of
the foregoing events.
Section 6.9 Expectations Regarding Put Notices. Within ten
(10) days after the commencement of each calendar quarter occurring
subsequent to the commencement of the Commitment Period, the
Company undertakes to notify the Investor as to its reasonable
expectations as to the dollar amount it intends to raise during
such calendar quarter, if any, through the issuance of Put Notices.
Such notification shall constitute only the Company's good faith
estimate with respect to such calendar quarter and shall in no way
obligate the Company to raise such amount during such calendar
quarter or otherwise limit its ability to deliver Put Notices
during such calendar quarter. The failure by the Company to comply
with this provision can be cured by the Company's notifying the
Investor at any time as to its reasonable expectations with respect
to the current calendar quarter.
Section 6.10 Consolidation; Merger. The Company shall not,
at any time after the date hereof, effect any merger or
consolidation of the Company with or into, or a transfer of all or
substantially all of the assets of the Company to, another entity
unless the resulting successor or acquiring entity (if not the
Company) assumes by written instrument the obligation to deliver to
the Investor such shares of stock and/or securities as the Investor
is entitled to receive pursuant to this Agreement and the Warrant.
Section 6.11 Issuance of Put Shares, Warrant Shares and
Blackout Shares. The sale of the Put Shares, the issuance of the
Warrant Shares pursuant to exercise of the Warrant and the issuance
of any Blackout Shares shall be made in accordance with the
provisions and requirements of Regulation D and any applicable
state law. Issuance of the Warrant Shares pursuant to exercise of
the Warrant through a cashless exercise shall be made in accordance
with the provisions and requirements of Section 3(a)(9) under the
Securities Act and any applicable state law.
Section 6.12 Legal Opinion on Subscription Date. The
Company's general or outside counsel shall deliver to the Investor
on the Subscription Date an opinion in the form of Exhibit E,
except for paragraph 6 thereof.
xx
Section 6.13 No Other Equity Lines. The Company shall
refrain from entering into any other agreements, arrangements or
understandings granting to the Company the right to put shares of
its securities to one or more investors through private placements.
ARTICLE VII
CONDITIONS TO DELIVERY OF
PUT NOTICES AND CONDITIONS TO CLOSING
Section 7.1 Conditions Precedent to the Obligation of the
Company to Issue and Sell Common Stock. The obligation hereunder of
the Company to issue and sell the Put Shares to the Investor
incident to each Closing is subject to the satisfaction, at or
before each such Closing, of each of the conditions set forth
below.
(a) Accuracy of the Investor's Representation and
Warranties. The representations and warranties of the
Investor shall be true and correct in all material
respects as of the date of this Agreement and as of the
date of each such Closing as though made at each such
time.
(b) Performance by the Investor. The Investor shall
have performed, satisfied and complied in all respects
with all covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied
with by the Investor at or prior to such Closing.
Section 7.2 Conditions Precedent to the Right of the
Company to Deliver a Put Notice and the Obligation of the Investor
to Purchase Put Shares. The right of the Company to deliver a Put
Notice and the obligation of the Investor hereunder to acquire and
pay for the Put Shares incident to a Closing is subject to the
satisfaction, on (i) the applicable Put Date and (ii) the
applicable Closing Date (each a "Condition Satisfaction Date"), of
each of the following conditions:
(a) Registration of the Registrable Securities with the
SEC. As set forth in the Registration Rights Agreement,
the Company shall have filed with the SEC a Registration
Statement with respect to the resale of the Registrable
Securities by the Investor that shall have been declared
effective by the SEC prior to the first Put Date, but in
no event later than ninety (90) days after Subscription
Date.
(b) Effective Registration Statement. As set forth in
the Registration Rights Agreement, the Registration
Statement shall have previously become effective and
shall remain effective on each Condition Satisfaction
Date and (i) neither the Company nor the Investor shall
have received notice that the SEC has issued or intends
to issue a stop order with respect to the Registration
Statement or that the SEC otherwise has suspended or
withdrawn the effectiveness of the Registration
Statement, either temporarily or permanently, or intends
or has threatened to do so (unless the SEC's concerns
have been addressed and the Investor is reasonably
xii
satisfied that the SEC no longer is considering or
intends to take such action), and (ii) no other
suspension of the use or withdrawal of the effectiveness
of the Registration Statement or related prospectus shall
exist.
(c) Accuracy of the Company's Representations and
Warranties. The representations and warranties of the
Company shall be true and correct as of each Condition
Satisfaction Date as though made at each such time
(except for representations and warranties specifically
made as of a particular date).
(d) Performance by the Company. The Company shall have
performed, satisfied and complied in all respects with
all covenants, agreements and conditions required by this
Agreement, the Registration Rights Agreement and the
Warrant to be performed, satisfied or complied with by
the Company at or prior to each Condition Satisfaction
Date.
(e) No Injunction. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have
been enacted, entered, promulgated or adopted by any
court or governmental authority of competent jurisdiction
that prohibits the transactions contemplated by this
Agreement or otherwise has a Material Adverse Effect, and
no actions, suits or proceedings shall be in progress,
pending or threatened by any Person, that seek to enjoin
or prohibit the transactions contemplated by this
Agreement or otherwise could reasonably be expected to
have a Material Adverse Effect. For purposes of this
paragraph (e), no proceeding shall be deemed pending or
threatened unless one of the parties has received written
or oral notification thereof prior to the applicable
Closing Date.
(f) No Suspension of Trading In or Delisting of Common
Stock. The trading of the Common Stock shall not have
been suspended by the SEC, the Principal Market or the
NASD and the Common Stock shall have been approved for
listing or quotation on and shall not have been delisted
from the Principal Market (including, without limitation,
delisted to the Nasdaq Bulletin Board). The issuance of
shares of Common Stock with respect to the applicable
Closing, if any, shall not violate the shareholder
approval requirements of the Principal Market.
(g) Legal Opinion. The Company shall have caused to be
delivered to the Investor, within five (5) Trading Days
of the Effective Date, an opinion of the Company's
independent or general counsel in the form of Exhibit E
hereto, addressed to the Investor.
(h) Ten Percent Limitation. On each Closing Date, the
number of Put Shares then to be purchased by the Investor
shall not exceed the number of such shares that, when
aggregated with all other shares of Registerable
Securities then owned by the Investor beneficially or
deemed beneficially owned by the Investor, would result
in the Investor owning no more than 9.9% of all of such
Common Stock as would be outstanding on such Closing
Date, as determined in accordance with Section 16 of the
xxii
Exchange Act and the regulations promulgated thereunder.
For purposes of this Section, in the event that the
amount of Common Stock outstanding as determined in
accordance with Section 16 of the Exchange Act and the
regulations promulgated thereunder is greater on a
Closing Date than on the date upon which the Put Notice
associated with such Closing Date is given, the amount of
Common Stock outstanding on such Closing Date shall
govern for purposes of determining whether the Investor,
when aggregating all purchases of Common Stock made
pursuant to this Agreement and, if any, Warrant Shares
and Blackout Shares, would own more than 9.9% of the
Common Stock following such Closing Date.
(i) Minimum Bid Price. The Bid Price equals or exceeds
the Floor Price throughout the applicable Valuation
Period (or, with respect to any Put Date, the portion of
the Valuation Period preceding such Put Date).
(j) Minimum Average Daily Trading Volume. The Average
Daily Trading Volume for the Common Stock with respect to
the applicable Put Date and Closing Date equals or
exceeds 50,000 shares.
(k) No Knowledge. The Company shall have no knowledge
of any event more likely than not to have the effect of
causing such Registration Statement to be suspended or
otherwise ineffective (which event is more likely than
not to occur within the fifteen Trading Days following
the Trading Day on which such Notice is deemed
delivered).
(l) Trading Cushion. The Trading Cushion shall have
elapsed since the immediately preceding Put Date.
(m) Shareholder Vote. The issuance of shares of Common
Stock with respect to the applicable Closing, if any,
shall not violate the shareholder approval requirements
of the Principal Market.
(n) Escrow Agreement. The parties hereto shall have
entered into the Escrow Agreement.
(o) Other. On each Condition Satisfaction Date, the
Investor shall have received and been reasonably
satisfied with such other certificates and documents as
shall have been reasonably requested by the Investor in
order for the Investor to confirm the Company's
satisfaction of the conditions set forth in this Section
7.2., including, without limitation, a certificate in
substantially the form and substance of Exhibit F hereto,
executed in either case by an executive officer of the
Company and to the effect that all the conditions to such
Closing shall have been satisfied as at the date of each
such certificate.
Section 7.3 Due Diligence Review; Non-Disclosure of Non-Public
Information.
xxiii
(a) The Company shall make available for inspection and
review by the Investor, advisors to and representatives
of the Investor (who may or may not be affiliated with
the Investor and who are reasonably acceptable to the
Company), any Underwriter, any Registration Statement or
amendment or supplement thereto or any blue sky, NASD or
other filing, all financial and other records, all SEC
Documents and other filings with the SEC, and all other
corporate documents and properties of the Company as may
be reasonably necessary for the purpose of such review,
and cause the Company's officers, directors and employees
to supply all such information reasonably requested by
the Investor or any such representative, advisor or
Underwriter in connection with such Registration
Statement (including, without limitation, in response to
all questions and other inquiries reasonably made or
submitted by any of them), prior to and from time to time
after the filing and effectiveness of the Registration
Statement for the sole purpose of enabling the Investor
and such representatives, advisors and Underwriters and
their respective accountants and attorneys to conduct
initial and ongoing due diligence with respect to the
Company and the accuracy of the Registration Statement.
(b) Each of the Company, its officers, directors,
employees and agents shall in no event disclose non-public
information to the Investor, advisors to or
representatives of the Investor unless prior to
disclosure of such information the Company identifies
such information as being non-public information and
provides the Investor, such advisors and representatives
with the opportunity to accept or refuse to accept such
non-public information for review. The Company may, as a
condition to disclosing any non-public information
hereunder, require the Investor's advisors and
representatives to enter into a confidentiality agreement
in form reasonably satisfactory to the Company and the
Investor.
(c) Nothing herein shall require the Company to disclose
non-public information to the Investor or its advisors or
representatives, and the Company represents that it does
not disseminate non-public information to any investors
who purchase stock in the Company in a public offering,
to money managers or to securities analysts; provided,
however, that notwithstanding anything herein to the
contrary, the Company shall, as hereinabove provided,
immediately notify the advisors and representatives of
the Investor and any Underwriters of any event or the
existence of any circumstance (without any obligation to
disclose the specific event or circumstance) of which it
becomes aware, constituting non-public information
(whether or not requested of the Company specifically or
generally during the course of due diligence by such
persons or entities), which, if not disclosed in the
prospectus included in the Registration Statement would
cause such prospectus to include a material misstatement
or to omit a material fact required to be stated therein
in order to make the statements, therein, in light of the
circumstances in which they were made, not misleading.
Nothing contained in this Section 7.3 shall be construed
to mean that such persons or entities other than the
Investor (without the written consent of the Investor
prior to disclosure of such information) may not obtain
non-public information in the course of conducting due
xxiv
diligence in accordance with the terms and conditions of
this Agreement and nothing herein shall prevent any such
persons or entities from notifying the Company of their
opinion that based on such due diligence by such persons
or entities, that the Registration Statement contains an
untrue statement of a material fact or omits a material
fact required to be stated in the Registration Statement
or necessary to make the statements contained therein,
in light of the circumstances in which they were made,
not misleading.
ARTICLE VIII
LEGENDS
Section 8.1 Legends. Each of the Warrant and, unless
otherwise provided below, each certificate representing Registrable
Securities will bear the following legend (the "Legend"):
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER
APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN
RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR
OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO A TRANSACTION THAT IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS
CERTIFICATE IS THE BENEFICIARY OF CERTAIN OBLIGATIONS OF
THE COMPANY SET FORTH IN A PRIVATE EQUITY LINE AGREEMENT
BETWEEN CYTOGEN CORPORATION AND KINGSBRIDGE CAPITAL
LIMITED DATED AS OF OCTOBER 23, 1998. A COPY OF THE
PORTION OF THE AFORESAID AGREEMENT EVIDENCING SUCH
OBLIGATIONS MAY BE OBTAINED FROM THE COMPANY'S EXECUTIVE
OFFICES.
As soon as practicable after the execution and delivery
hereof, but in any event within 5 Trading Days hereafter, the
Company shall issue to the transfer agent for its Common Stock (and
to any substitute or replacement transfer agent for its Common
Stock upon the Company's appointment of any such substitute or
replacement transfer agent) instructions in substantially the form
of Exhibit G hereto, with a copy to the Investor. Such
instructions shall be irrevocable by the Company from and after the
date hereof or from and after the issuance thereof to any such
substitute or replacement transfer agent, as the case may be,
except as otherwise expressly provided in the Registration Rights
Agreement. It is the intent and purpose of such instructions, as
xxv
provided therein, to require the transfer agent for the Common
Stock from time to time upon transfer of Registrable Securities by
the Investor to issue certificates evidencing such Registrable
Securities free of the Legend during the following periods and
under the following circumstances and without consultation by the
transfer agent with the Company or its counsel and without the need
for any further advice or instruction or documentation to the
transfer agent by or from the Company or its counsel or the
Investor:
(a) At any time after the Effective Date, upon surrender
of one or more certificates evidencing Common Stock that
bear the Legend, to the extent accompanied by a notice
requesting the issuance of new certificates free of the
Legend to replace those surrendered; provided that (i)
the Registration Statement shall then be effective and
(ii) if reasonably requested by the transfer agent the
Investor confirms to the transfer agent that the Investor
has complied with the prospectus delivery requirement.
(b) At any time upon any surrender of one or more
certificates evidencing Registrable Securities that bear
the Legend, to the extent accompanied by a notice
requesting the issuance of new certificates free of the
Legend to replace those surrendered and containing
representations that (i) the Investor is permitted to
dispose of such Registrable Securities without limitation
as to amount or manner of sale pursuant to Rule 144(k)
under the Securities Act or (ii) the Investor has sold,
pledged or otherwise transferred or agreed to sell,
pledge or otherwise transfer such Registrable Securities
in a manner other than pursuant to an effective
registration statement, to a transferee who shall upon
such transfer be entitled to freely tradeable securities.
Section 8.2 No Other Legend or Stock Transfer Restrictions.
No legend other than the one specified in Section 8.1 has been or
shall be placed on the share certificates representing the Common
Stock and no instructions or "stop transfers orders," so called,
"stock transfer restrictions," or other restrictions have been or
shall be given to the Company's transfer agent with respect thereto
other than as expressly set forth in this Article VIII.
Section 8.3 Investor's Compliance. Nothing in this Article
VIII shall affect in any way the Investor's obligations under any
agreement to comply with all applicable securities laws upon resale
of the Common Stock.
ARTICLE IX
INDEMNIFICATION
Section 9.1 Indemnification. (i) The Company agrees to
indemnify and hold harmless the Investor, its partners, affiliates,
officers, directors, employees, and duly authorized agents, and
each Person or entity, if any, who controls the Investor within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, together with the Controlling Persons (as defined in
the Registration Rights Agreement) from and against any Damages,
joint or several, and any action in respect thereof to which the
Investor, its partners, affiliates, officers, directors, employees,
and duly authorized agents, and any such Controlling Person becomes
subject to, resulting from, arising out of or relating to any
misrepresentation, breach of warranty or nonfulfillment of or
failure to perform any covenant or agreement on the part of Company
contained in this Agreement, as such Damages are incurred, except
to the extent that such damages result solely from the Investor's
failure to perform any covenant or agreement contained in this
Agreement, provided, however, that the Company shall not be liable
in any such case to the extent that any such Damages arise out of
or are based upon information furnished to the Company by or on
behalf of the Investor in writing and (ii) the Investor agrees to
indemnify and hold harmless the Company, its partners, affiliates,
officers, directors, employees and duly authorized agents and its
Controlling Persons (as defined in the Registration Rights
Agreement) from and against any Damages, joint or several, and any
action in respect thereof to which the Company, its partners,
affiliates, officers, directors, employees, and duly authorized
agents, and any such Controlling Person becomes subject to,
resulting from, arising out of or relating to any
xxvi
misrepresentation, breach of warranty or nonfulfillment of or
failure to perform any covenant or agreement on the part of
Investor contained in this Agreement; provided, however, that the
indemnification obligation of the Investor under this Section 9.1
shall not exceed an aggregate maximum amount of $280,000.
Section 9.2 Method of Asserting Indemnification Claims.
All claims for indemnification by any Indemnified Party (as defined
below) under Section 9.1 shall be asserted and resolved as follows:
(a) In the event any claim or demand in respect of which
any person claiming indemnification under any provision
of Section 9.1 (an "Indemnified Party") might seek
indemnity under Section 9.1 is asserted against or sought
to be collected from such Indemnified Party by a person
other than the Company, the Investor or any affiliate of
the Company or (a "Third Party Claim"), the Indemnified
Party shall deliver a written notification, enclosing a
copy of all papers served, if any, and specifying the
nature of and basis for such Third Party Claim and for
the Indemnified Party's claim for indemnification that is
being asserted under any provision of Section 12.2
against any person (the "Indemnifying Party"), together
with the amount or, if not then reasonably ascertainable,
the estimated amount, determined in good faith, of such
Third Party Claim (a "Claim Notice") with reasonable
promptness to the Indemnifying Party. If the Indemnified
Party fails to provide the Claim Notice with reasonable
promptness after the Indemnified Party receives notice of
such Third Party Claim, the Indemnifying Party shall not
be obligated to indemnify the Indemnified Party with
respect to such Third Party Claim to the extent that the
Indemnifying Party's ability to defend has been
irreparably prejudiced by such failure of the Indemnified
Party. The Indemnifying Party shall notify the In-
demnified Party as soon as practicable within the period
ending thirty (30) calendar days following receipt by the
Indemnifying Party of either a Claim Notice or an
Indemnity Notice (as defined below) (the "Dispute
Period") whether the Indemnifying Party disputes its
liability or the amount of its liability to the
Indemnified Party under Section 9.1 and whether the
Indemnifying Party desires, at its sole cost and expense,
to defend the Indemnified Party against such Third Party
Claim.
xxvii
(i) If the Indemnifying Party notifies the
Indemnified Party within the Dispute Period that
the Indemnifying Party desires to defend the
Indemnified Party with respect to the Third Party
Claim pursuant to this Section 9.2(a), then the
Indemnifying Party shall have the right to defend,
with counsel reasonably satisfactory to the
Indemnified Party, at the sole cost and expense of
the Indemnifying Party, such Third Party Claim by
all appropriate proceedings, which proceedings
shall be vigorously and diligently prosecuted by
the Indemnifying Party to a final conclusion or
will be settled at the discretion of the
Indemnifying Party (but only with the consent of
the Indemnified Party in the case of any settlement
that provides for any relief other than the payment
of monetary damages or that provides for the
payment of monetary damages as to which the
Indemnified Party shall not be indemnified in full
pursuant to Section 9.1). The Indemnifying Party
shall have full control of such defense and
proceedings, including any compromise or settlement
thereof; provided, however, that the Indemnified
Party may, at the sole cost and expense of the
Indemnified Party, at any time prior to the
Indemnifying Party's delivery of the notice
referred to in the first sentence of this
clause (i), file any motion, answer or other
pleadings or take any other action that the
Indemnified Party reasonably believes to be
necessary or appropriate to protect its interests;
and provided further, that if requested by the
Indemnifying Party, the Indemnified Party will, at
the sole cost and expense of the Indemnifying
Party, provide reasonable cooperation to the
Indemnifying Party in contesting any Third Party
Claim that the Indemnifying Party elects to
contest. The Indemnified Party may participate in,
but not control, any defense or settlement of any
Third Party Claim controlled by the Indemnifying
Party pursuant to this clause (i), and except as
provided in the preceding sentence, the Indemnified
Party shall bear its own costs and expenses with
respect to such participation. Notwithstanding the
foregoing, the Indemnified Party may take over the
control of the defense or settlement of a Third
Party Claim at any time if it irrevocably waives
its right to indemnity under Section 9.1 with
respect to such Third Party Claim.
(ii) If the Indemnifying Party fails to notify the
Indemnified Party within the Dispute Period that
the Indemnifying Party desires to defend the Third
Party Claim pursuant to Section 9.2(a), or if the
Indemnifying Party gives such notice but fails to
prosecute vigorously and diligently or settle the
Third Party Claim, or if the Indemnifying Party
fails to give any notice whatsoever within the
Dispute Period, then the Indemnified Party shall
have the right to defend, at the sole cost and
expense of the Indemnifying Party, the Third Party
Claim by all appropriate proceedings, which
proceedings shall be prosecuted by the Indemnified
Party in a reasonable manner and in good faith or
will be settled at the discretion of the
Indemnified Party (with the consent of the
Indemnifying Party, which consent will not be
unreasonably withheld). The Indemnified Party will
xxviii
have full control of such defense and proceedings,
including any compromise or settlement thereof;
provided, however, that if requested by the
Indemnified Party, the Indemnifying Party will, at
the sole cost and expense of the Indemnifying
Party, provide reasonable cooperation to the
Indemnified Party and its counsel in contesting any
Third Party Claim which the Indemnified Party is
contesting. Notwithstanding the foregoing
provisions of this clause (ii), if the Indemnifying
Party has notified the Indemnified Party within the
Dispute Period that the Indemnifying Party disputes
its liability or the amount of its liability
hereunder to the Indemnified Party with respect to
such Third Party Claim and if such dispute is
resolved in favor of the Indemnifying Party in the
manner provided in clause (iii) below, the
Indemnifying Party will not be required to bear the
costs and expenses of the Indemnified Party's
defense pursuant to this clause (ii) or of the
Indemnifying Party's participation therein at the
Indemnified Party's request, and the Indemnified
Party shall reimburse the Indemnifying Party in
full for all reasonable costs and expenses incurred
by the Indemnifying Party in connection with such
litigation. The Indemnifying Party may participate
in, but not control, any defense or settlement
controlled by the Indemnified Party pursuant to
this clause (ii), and the Indemnifying Party shall
bear its own costs and expenses with respect to
such participation.
(iii) If the Indemnifying Party notifies the
Indemnified Party that it does not dispute its
liability or the amount of its liability to the
Indemnified Party with respect to the Third Party
Claim under Section 9.1 or fails to notify the
Indemnified Party within the Dispute Period whether
the Indemnifying Party disputes its liability or
the amount of its liability to the Indemnified
Party with respect to such Third Party Claim, the
Loss in the amount specified in the Claim Notice
shall be conclusively deemed a liability of the
Indemnifying Party under Section 9.1 and the
Indemnifying Party shall pay the amount of such
Loss to the Indemnified Party on demand. If the
Indemnifying Party has timely disputed its
liability or the amount of its liability with
respect to such claim, the Indemnifying Party and
the Indemnified Party shall proceed in good faith
to negotiate a resolution of such dispute, and if
not resolved through negotiations within the
Resolution Period, such dispute shall be resolved
by arbitration in accordance with paragraph (c) of
this Section 9.2.
(b) In the event any Indemnified Party should have a
claim under Section 9.1 against the Indemnifying Party
that does not involve a Third Party Claim, the
Indemnified Party shall deliver to the Indemnifying Party
a written notification of a claim for indemnity under
Section 9.1 specifying the nature of and basis for such
claim, together with the amount or, if not then
reasonably ascertainable, the estimated amount,
determined in good faith, of such claim (an "Indemnity
Notice") with reasonable promptness to the Indemnifying
xxix
Party. The failure by any Indemnified Party to give the
Indemnity Notice shall not impair such party's rights
hereunder except to the extent that the Indemnifying
Party demonstrates that it has been irreparably
prejudiced thereby. If the Indemnifying Party notifies
the Indemnified Party that it does not dispute the claim
or the amount of the claim described in such Indemnity
Notice or fails to notify the Indemnified Party within
the Dispute Period whether the Indemnifying Party
disputes the claim or the amount of the claim described
in such Indemnity Notice, the Loss in the amount
specified in the Indemnity Notice will be conclusively
deemed a liability of the Indemnifying Party under
Section 9.1 and the Indemnifying Party shall pay the
amount of such Loss to the Indemnified Party on demand.
If the Indemnifying Party has timely disputed its
liability or the amount of its liability with respect to
such claim, the Indemnifying Party and the Indemnified
Party shall proceed in good faith to negotiate a
resolution of such dispute, and if not resolved through
negotiations within the Resolution Period, such dispute
shall be resolved by arbitration in accordance with
paragraph (c) of this Section 9.2.
(c) Any dispute under this Agreement or the Warrant
shall be submitted to arbitration (including, without
limitation, pursuant to this Section 12.3) and shall be
finally and conclusively determined by the decision of a
board of arbitration consisting of three (3) members (the
"Board of Arbitration") selected as hereinafter provided.
Each of the Indemnified Party and the Indemnifying Party
shall select one (1) member and the third member shall be
selected by mutual agreement of the other members, or if
the other members fail to reach agreement on a third
member within twenty (20) days after their selection,
such third member shall thereafter be selected by the
American Arbitration Association upon application made to
it for such purpose by the Indemnified Party. The Board
of Arbitration shall meet on consecutive business days in
New York County, New York or such other place as a
majority of the members of the Board of Arbitration
determines more appropriate, and shall reach and render
a decision in writing (concurred in by a majority of the
members of the Board of Arbitration) with respect to the
xxx
amount, if any, which the Indemnifying Party is required
to pay to the Indemnified Party in respect of a claim
filed by the Indemnified Party. In connection with
rendering its decisions, the Board of Arbitration shall
adopt and follow such rules and procedures as a majority
of the members of the Board of Arbitration deems
necessary or appropriate. To the extent practical,
decisions of the Board of Arbitration shall be rendered
no more than thirty (30) calendar days following
commencement of proceedings with respect thereto. The
Board of Arbitration shall cause its written decision to
be delivered to the Indemnified Party and the
Indemnifying Party. Any decision made by the Board of
Arbitration (either prior to or after the expiration of
such thirty (30) calendar day period) shall be final,
binding and conclusive on the Indemnified Party and the
Indemnifying Party and entitled to be enforced to the
fullest extent permitted by law and entered in any court
of competent jurisdiction. Each party to any arbitration
shall bear its own expense in relation thereto, including
but not limited to such party's attorneys' fees, if any,
and the expenses and fees of the Board of Arbitration
shall be divided between the Indemnifying Party and the
Indemnified Party in the same proportion as the portion
of the related claim determined by the Board of
Arbitration to be payable to the Indemnified Party bears
to the portion of such claim determined not to be so
payable.
ARTICLE X
MISCELLANEOUS
Section 10.1 Fees and Expenses. Each of the Company and the
Investor agrees to pay its own expenses incident to the performance
of its obligations hereunder, except that the Company shall pay the
fees, expenses and disbursements of the Investor's counsel in an
amount not to exceed $25,000 for the preparation, negotiation,
execution and delivery of this Agreement, the Registration Rights
Agreement, the Escrow Agreement and the Warrant.
Section 10.2 Reporting Entity for the Common Stock. The
reporting entity relied upon for the determination of the trading
price or trading volume of the Common Stock on any given Trading
Day for the purposes of this Agreement shall be Nasdaq or any
successor thereto. The written mutual consent of the Investor and
the Company shall be required to employ any other reporting entity.
Section 10.3 Brokerage. Each of the parties hereto
represents that it has had no dealings in connection with this
transaction with any finder or broker who will demand payment of
any fee or commission from the other party. The Company on the one
hand, and the Investor, on the other hand, agree to indemnify the
other against and hold the other harmless from any and all
liabilities to any persons claiming brokerage commissions or
finder's fees on account of services purported to have been
rendered on behalf of the indemnifying party in connection with
this Agreement or the transactions contemplated hereby.
Section 10.4 Notices. All notices, demands, requests,
consents, approvals, and other communications required or permitted
hereunder shall be in writing and, unless otherwise specified
herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or
facsimile, addressed as set forth below or to such other address as
such party shall have specified most recently by written notice
given in accordance herewith. Any notice or other communication
required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile, with
accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on
a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours
where such notice is to be received) or (b) on the second business
day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur. The addresses for such
communications shall be:
xxxi
If to the Company:
Cytogen Corporation
000 Xxxxxxx Xxxx Xxxx XX0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: H. Xxxxxx Xxxxxx, Ph.D.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Cytogen Corporation
000 Xxxxxxx Xxxx Xxxx XX0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx., Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to the Investor:
Xxxx Xxxxxx
Kingsbridge Capital Limited
c/o Kingsbridge Corporate Services Limited
Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxx Xxxxxxx
Xxxxxxxx xx Xxxxxxx
Telephone: 000-000-00-000-000
Facsimile: 011-353-45-482-003
with a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Either party hereto may from time to time change its address or
facsimile number for notices under this Section by giving at least
ten (10) days' prior written notice of such changed address or
facsimile number to the other party hereto.
Section 10.5 Assignment. Neither this Agreement nor any
rights of the Investor or the Company hereunder may be assigned by
either party to any other person. Notwithstanding the foregoing,
xxxii
(a) the provisions of this Agreement shall inure to the benefit of,
and be enforceable by, any transferee of any of the Common Stock
purchased or acquired by the Investor hereunder with respect to the
Common Stock held by such person, and (b) the Investor's interest
in this Agreement may be assigned at any time, in whole or in part,
to any other person or entity (including any affiliate of the
Investor) upon the prior written consent of the Company, which
consent shall not to be unreasonably withheld.
Section 10.6 Amendment; No Waiver. No party shall be liable
or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth in
this Agreement or therein. Except as expressly provided in this
Agreement, neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written
instrument signed by both parties hereto. The failure of the
either party to insist on strict compliance with this Agreement, or
to exercise any right or remedy under this Agreement, shall not
constitute a waiver of any rights provided under this Agreement,
nor estop the parties from thereafter demanding full and complete
compliance nor prevent the parties from exercising such a right or
remedy in the future.
Section 10.7 Annexes and Exhibits; Entire Agreement. All
annexes and exhibits to this Agreement are incorporated herein by
reference and shall constitute part of this Agreement. This
Agreement, the Warrant, the Registration Rights Agreement and the
Escrow Agreement set forth the entire agreement and understanding
of the parties relating to the subject matter hereof and thereof
and supersede all prior and contemporaneous agreements,
negotiations and understandings between the parties, both oral and
written, relating to the subject matter hereof.
Section 10.8 Termination; Survival. This Agreement shall
terminate on the earlier of (i) twenty four (24) months after the
commencement of the Commitment Period (ii) such date that the
Investor terminates this Agreement pursuant to Section 2.4 hereof
and (iii) the date on which the Company has made Puts with an
aggregate Investment Amount equal to the Maximum Commitment Amount;
provided, however, that the provisions of Articles VI, VIII, IX and
X, and of Section 2.1(b) and Section 7.3, shall survive the
termination of this Agreement.
Section 10.9 Severability. In the event that any provision
of this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision;
provided that such severability shall be ineffective if it
materially changes the economic benefit of this Agreement to any
party.
Section 10.10 Title and Subtitles. The titles and subtitles
used in this Agreement are used for the convenience of reference
and are not to be considered in construing or interpreting this
Agreement.
Section 10.11 Counterparts. This Agreement may be executed in
multiple counterparts, each of which may be executed by less than
all of the parties and shall be deemed to be an original instrument
which shall be enforceable against the parties actually executing
such counterparts and all of which together shall constitute one
and the same instrument.
xxxiii
Section 10.12 Choice of Law. This Agreement shall be
construed under the laws of the State of New York.
xxxiv
IN WITNESS WHEREOF, the parties hereto have caused this
Private Equity Line Agreement to be executed by the undersigned,
thereunto duly authorized, as of the date first set forth above.
KINGSBRIDGE CAPITAL LIMITED
By: /s/ Valentine X'Xxxxxxxx
------------------------
Valentine X'Xxxxxxxx
Director
CYTOGEN CORPORATION
By: /s/ H. Xxxxxx Xxxxxx
-------------------------
H. Xxxxxx Xxxxxx, Ph.D.
President and Chief Executive Officer
ANNEX A
MAXIMUM PUT AMOUNT
The Maximum Put Amount with respect to a Put shall be
determined based upon the Average Daily Trading Volume of shares of
Common Stock with respect to the relevant Put Date and the Market
Price as of such Put Date of shares of Common Stock on such Put
Date as follows:
Average Daily Trading Volume
Market Price ($ 125,001-
per share) 50,000-75,000 75,001-125,000 200,000 200,001-Above
----------------------------------------------------------------------------
0.75-1.00 $150,000 $250,000 $325,000 $400,000
----------------------------------------------------------------------------
1.01-1.50 $225,000 $350,000 $375,000 $500,000
----------------------------------------------------------------------------
1.51-1.75 $300,000 $400,000 $450,000 $550,000
----------------------------------------------------------------------------
1.76-2.00 $400,000 $450,000 $500,000 $600,000
----------------------------------------------------------------------------
2.01-2.50 $500,000 $550,000 $600,000 $750,000
----------------------------------------------------------------------------
2.51-3.00 $550,000 $600,000 $700,000 $800,000
----------------------------------------------------------------------------
3.01-3.50 $550,000 $650,000 $700,000 $850,000
----------------------------------------------------------------------------
3.51-Above $600,000 $750,000 $850,000 $1,000,000
----------------------------------------------------------------------------
EXHIBIT A
FORM OF ESCROW AGREEMENT
ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of October 23, 1998 among CYTOGEN
CORPORATION a Delaware corporation, as escrow agent (the "Escrow Agent"),
CYTOGEN CORPORATION a Delaware corporation (the "Company"), and KINGSBRIDGE
CAPITAL LIMITED, a British Virgin Islands entity ("Investor"). Any capitalized
terms not defined herein shall have the meanings ascribed to them in the Private
Equity Line Agreement by and between the Company and the Investor, dated as of
October 23, 1998 (the "Equity Line Agreement").
WHEREAS, Investor and the Company have entered into the Equity Line
Agreement whereby Investor agreed to purchase capital stock of the Company upon
certain Puts made by the Company, subject to the terms and conditions of the
Equity Line Agreement;
WHEREAS, pursuant to Section 7.2(o) of the Equity Line Agreement,
Investor and the Company agreed to enter into this Agreement with Escrow Agent
in order for Escrow Agent to hold the Investment Amount with respect to a Put
(as delivered to Escrow Agent by Investor) and the certificates representing
the Put Shares with respect to such Put (as delivered to Escrow Agentby the
Company) for release to the Company and Investor, respectively, in
accordance with this Agreement; and
NOW, THEREFORE, Investor, the Company and the Escrow Agent hereby
agree as follows:
a. Appointment of the Escrow Agent; Deposit of Escrow Amount and
Share Certificate. The Company and Investor hereby constitute and appoint the
Escrow Agent as, and the Escrow Agent hereby agrees to assume and perform the
duties of, the escrow agent under and pursuant to this Agreement. The Escrow
Agent acknowledges that it will, with respect to any Put made by the Company
in accordance with the Equity Line Agreement, (i) receive from the Investor
the Investment Amount with respect to such Put (the "Escrow Fund") as provided
in Article II of the Equity Line Agreement and (ii) receive from the Company
certificate(s) representing all the Put Shares corresponding to such
Investment Amount and Put (collectively, the "Share Certificate"), as provided
in Article II of the Equity Line Agreement.
b. Escrow Fund; Share Certificate. The Escrow Fund shall be held
by the Escrow Agent in a separate account maintained for the purpose of
effecting the Closings, on the terms and subject to the conditions of this
Agreement. The Escrow Agent shall hold in escrow the Share Certificate
separately from the Escrow Fund and agrees that the Share Certificate shall
be held on the terms and subject to the conditions set forth herein. The Share
Certificate and the Escrow Fund shall not be subject to lien or attachment by
any creditor of any party hereto and shall be used solely for the purpose set
forth in this Agreement. The Share Certificate and the Escrow Fund shall not
be available to, and shall not be used by, the Escrow Agent to set off any
obligations of either Investor or the Company owing to the Escrow Agent in
any capacity.
(c) Deliveries to Effect Closing. Upon the receipt by the Escrow
Agent of a certificate in substantially the form of Annex I attached hereto
("Mutual Closing Certificate"), jointly executed by the Company and Investor,
Investor and the Company irrevocably instruct the Escrow Agent (i) to release
the Share Certificate to Investor, and simultaneously (ii) to pay over to
Investor's counsel, in immediately available funds to a bank account of the
Investor's counsel's designation, the portion of the Escrow Fund representing
any reduction in the Investment Amount due to fees, expenses and
disbursements owing to the Investor's counsel as provided for in Section 2.3 of
the Equity Line Agreement and (iii) to pay over to the Company the
remaining portion of the Escrow Fund, in immediately available funds to a
bank account of the Company's designation.
(d) Release of Escrow Fund and Share Certificate upon Failure to
Close. If, upon the expiration of two (2) Trading Days after any Closing Date,
the Escrow Agent has not received a Mutual Closing Certificate with respect
to such Closing Date, the Investor and the Company irrevocably instruct the
Escrow Agent to release the Share Certificate to the Company and to pay
over to Investor all amounts of the Escrow Fund, in immediately available
funds, to a bank account of Investor's designation.
(e) Duties and Obligations of the Escrow Agent. The duties and
obligations of the Escrow Agent are purely ministerial and shall be limited to
and determined solely by the provisions of this Agreement. The Escrow Agent
is not charged with knowledge of or any duties or responsibilities in
respect of any other agreement or document. In furtherance and not in
limitation of the foregoing:
(i) the Escrow Agent shall not be liable for any loss of
interest sustained as a result of investments made hereunder in accordance
with the terms hereof, including any liquidation of any investment of the
Escrow Fund prior to its maturity effected in order to make a payment
required by the terms of this Agreement;
(ii) the Escrow Agent shall be fully protected in relying
in good faith upon any written certification, notice, direction, request,
waiver, consent, receipt or other document that the Escrow Agent
reasonably believes to be genuine and duly authorized, executed and
delivered;
(iii) the Escrow Agent shall not be liable for any error of
judgment, or for any act done or omitted by it, or for any mistake in
fact or law, or for anything that it may do or refrain from doing in
connection herewith; provided, however, that notwithstanding any other
provision in this Agreement, the Escrow Agent shall be liable for its
willful misconduct or gross negligence or breach of this Agreement;
(iv) the Escrow Agent may seek the advice of legal counsel
selected with reasonable care in the event of any dispute or question as
to the construction of any of the provisions of this Agreement or its
duties hereunder, and it shall incur no liability and shall be fully
protected in respect of any action taken, omitted or suffered by it in
good faith in accordance with the opinion of such counsel;
(v) in the event that the Escrow Agent shall in any
instance, after seeking the advice of legal counsel pursuant to the
immediately preceding clause, in good faith be uncertain as to its
duties or rights hereunder, it shall be entitled to refrain from taking
any action in that instance and its sole obligation, in addition to
those of its duties hereunder as to which there is no such uncertainty,
shall be to keep safely all property held in the Escrow Fund until it
shall be directed otherwise in writing by each of the parties hereto
or by a final, nonappealable order of a court of competent jurisdiction;
provided, however, in the event that the Escrow Agent has not received
such written direction or court order within one hundred eighty (180)
calendar days after requesting the same, it shall have the right to
interplead Investor and the Company in any court of competent jurisdiction
and request that such court determine its rights and duties hereunder; and
(vi) the Escrow Agent may execute any of its powers or
responsibilities hereunder and exercise any rights hereunder either
directly or by or through agents or attorneys selected with reasonable care,
nothing in this Agreement shall be deemed to impose upon the Escrow Agent any
duty to qualify to do business or to act as fiduciary or otherwise in any
jurisdiction other than the State of New York and the Escrow Agent shall not be
responsible for and shall not be under a duty to examine into or pass upon
the validity, binding effect, execution or sufficiency of this Agreement or
of any agreement amendatory or supplemental hereto.
(f) Cooperation. Investor and the Company shall provide to the
Escrow Agent all instruments and documents within their respective powers to
provide that are necessary for the Escrow Agent to perform its duties and
responsibilities hereunder.
(g) Expenses; Indemnity. The Company hereby agrees to pay or
reimburse the Escrow Agent upon request for all expenses, disbursement and
advances, including reasonable attorney's fees, incurred or made by it in
connection with the preparation, execution, performance, delivery,
modification and termination of this Agreement; provided that Investor shall
bear all expenses of the investment and reinvestment of the Escrow Fund. The
Company hereby agrees to indemnify the Escrow Agent for, and to hold it
harmless against, any loss, liability or expense arising out of or in
connection with this Agreement and carrying out its duties hereunder,
including the costs and expenses of defending itself against any claim of
liability, except in those cases where the Escrow Agent has been guilty of
gross negligence, willful misconduct or in breach of this Agreement.
Anything in this Agreement to the contrary notwithstanding, in no event
shall the Escrow Agent be liable for special, indirect or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if the Escrow Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action. The provisions of this Section
shall survive any termination of this Agreement, whether by disbursement of
the collateral held, resignation of the Escrow Agent, or otherwise.
v
(h) Resignation and Removal of the Escrow Agent.
(a) The Escrow Agent may resign as such thirty (30) calendar days
following the giving of prior written notice thereof to the Company and
Investor. In addition, the Escrow Agent may be removed and replaced on a
date designated in a written instrument signed by the Company and Investor
and delivered to the Escrow Agent. Notwithstanding the foregoing, no
such resignation r removal shall be effective until a successor escrow agent
has acknowledged its appointment as such as provided in paragraph (c) below.
In either event, upon the effective date of such resignation or removal,
the Escrow Agent shall deliver the property comprising the Escrow Fund and
the Stock Certificate to such successor escrow agent, together with such
records maintained by the Escrow Agent in connection with its duties
hereunder and other information with respect to the Escrow Fund
as such successor may reasonably request.
(b) If a successor escrow agent shall not have acknowledged its
appointment as such as provided in paragraph (c) below, in the case of a
resignation, prior to the expiration of thirty (30) calendar days following
the date of a notice of resignation or, in the case of a removal, on the date
designated for the Escrow Agent's removal, as the case may be, because the
Company and Investor are unable to agree on a successor escrow agent, or for
any other reason, the Escrow Agent may select a successor escrow agent and
any such resulting appointment shall be binding upon all of the parties to
this Agreement, provided that any such successor selected by the Escrow
Agent shall be a depository institution or trust company that is designated
in writing by the Investor and is incorporated under the laws of the United
States of America, any State thereof or the District of Columbia and has
total assets in excess of U.S. $500 million.
(c) Upon written acknowledgment by a successor escrow agent
appointed in accordance with the foregoing provisions of this Section of its
agreement to serve as escrow agent hereunder and the receipt of the property
then comprising the Escrow Fund and the Stock Certificate, the Escrow Agent
shall be fully released and relieved of all duties, responsibilities and
obligations under this Agreement, subject to the proviso contained in clause
(iii) of Section 5, and such successor escrow agent shall for all purposes
hereof be the Escrow Agent.
(i) Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given if
delivered personally or by facsimile transmission (with confirmation
generated by the sending machine) or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
If to the Company:
Cytogen Corporation
000 Xxxxxxx Xxxx Xxxx XX0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: H. Xxxxxx Xxxxxx, Ph.D.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
vi
with a copy to:
Cytogen Corporation
000 Xxxxxxx Xxxx Xxxx XX0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx., Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to the Investor:
Xxxx Xxxxxx
Kingsbridge Capital Limited
c/o Kingsbridge Corporate Services Limited
Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxx Xxxxxxx
Xxxxxxxx xx Xxxxxxx
Telephone: 000-000-00-000-000
Facsimile: 011-353-45-482-003
with a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and if to the Escrow Agent:
Cytogen Corporation
000 Xxxxxxx Xxxx Xxxx XX0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx., Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile
number as provided in this Section, be deemed given upon receipt, and (iii)
if delivered by mail in the manner described above to the address as provided
in this Section, be deemed given upon receipt (in each case regardless of
whether such notice, request or other communication is received by any other
Person to whom a copy of such notice is to be delivered pursuant to this
Section). Any party from time to time may change its address, facsimile
vii
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other parties hereto.
(j) Amendments, etc.. This Agreement may be amended or modified,
and any of the terms hereof may be waived, only by a written instrument duly
executed by or on behalf of Investor and the Company and, with respect to any
amendment that would adversely affect the Escrow Agent, the Escrow Agent.
No waiver by any party of any term or condition contained of this Agreement,
in any one or more instances, shall be deemed to be or construed as a waiver
of the same or any other term or condition of this Agreement on any future
occasion.
(k) Governing Law. This Agreement shall be construed under the
laws of the State of New York.
(l) Business Day. For all purposes of this Agreement, the term
"business day" shall mean a day other than Saturday, Sunday or any day on
which banks located in the State of New York are authorized or obligated to
close.
(m) Entire Agreement. It is understood and agreed that this
Escrow Agreement supersedes all understandings and agreements heretofore had
between the parties hereto with respect to the subject matter hereof, and
contains the sole and entire agreement between the parties with
respect to the subject matter hereof.
(n) Assignment. Neither this Agreement nor any right, interest
or obligation hereunder may be assigned by any party without the prior written
consent of the other parties and any attempt to do so will be void, except
that Investor may assign all of its rights, interests and obligations
hereunder at any time, in whole or in part, to any other person or entity
(including any affiliate of the Investor) upon the prior written consent of the
Company, which consent shall not to be unreasonably withheld. Investor and
the Company shall provide to the Escrow Agent written notice of such an
assignment by Investor.
(o) Miscellaneous. This Agreement is binding upon and will inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof. This Escrow Agreement may be signed by facsimile copy (followed by
originals) and, in addition, may be executed in several counterparts, each
of which shall be deemed an original but all of which shall constitute one
instrument.
viii
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first above written.
KINGSBRIDGE CAPITAL LIMITED:
By: /s/ Valentine X'Xxxxxxxx
--------------------------
Valentine X'Xxxxxxxx
Director
CYTOGEN CORPORATION
By: /s/ H. Xxxxxx Xxxxxx
_____________________________
H. Xxxxxx Xxxxxx, Ph.D.
President and Chief Executive Officer
CYTOGEN CORPORATION, as Escrow Agent
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Vice President General Counsel and
Corporate Secretary
1
ANNEX I
MUTUAL CLOSING CERTIFICATE
to
CYTOGEN CORPORATION
as Escrow Agent
The undersigned, KINGSBRIDGE CAPITAL LIMITED, a British Virgin
Islands entity ("Investor"), and CYTOGEN CORPORATION, a Delaware corporation
("the Company"), pursuant to Section 3 of the Escrow Agreement dated as of
October 23, 1998 among Investor, the Company and you (terms defined in said
Escrow Agreement have the same meanings when used herein), hereby instruct
you:
(i) to deliver to Investor the Share Certificate,
(ii) to pay to May Xxxxx Group the amount of $_________, by wire transfer
of immediately available funds to an account at Chase Manhattan Bank, New
York, New York, (Account # 140082322865; ABA # 021 000 021),
[(iii) to pay to Investor's counsel from the Escrow Fund, the amount
of $_________, by wire transfer of immediately available funds to
Investor's counsel's account at __________________, _________, _________
(Account No.:_________).]
(iii) to pay to the Company from the Escrow Fund, all amounts remaining,
by wire transfer of immediately available funds to the Company's account
at __________________, _________, _________ (Account No.:_________),
KINGSBRIDGE CAPITAL LIMITED
By:________________________________
Name:
Title:
Dated:____________, ____
CYTOGEN CORPORATION
By:________________________________
Name:
Title:
Dated:____________, ____
EXHIBIT B
FORM OF REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of October
23, 1998 is made and entered into by and between CYTOGEN CORPORATION, a Delaware
corporation (the "Company"), and KINGSBRIDGE CAPITAL LIMITED (the "Investor").
WHEREAS, the Company and the Investor have entered into that certain
Private Equity Line Agreement, dated as of the date hereof (the "Equity Line
Agreement"), pursuant to which the Company will issue, from time to time, to
the Investor up to $12,000,000 worth of shares of Common Stock, par value $.01
per share, of the Company (the "Common Stock");
WHEREAS, pursuant to the terms of, and in partial consideration for, the
Investor entering into the Investment Agreement, the Company has issued to
the Investor a warrant dated as of the date hereof, exercisable from time to
time within three (3) years following the six-month anniversary
of the date of issuance (the "Warrant") for the purchase of an aggregate
of up to 200,000 shares of Common Stock at a price specified in such Warrant;
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investor's agreement to enter into the Investment Agreement, the Company
has agreed to provide the Investor with certain registration rights with
respect to the Registrable Securities;
NOW, THEREFORE, in consideration of the premises, the representations,
warranties, covenants and agreements contained herein, in the Warrant, and in
the Investment Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, intending to be
legally bound hereby, the parties hereto agree as follows (capitalized
terms used herein and not defined herein shall have the respective meanings
ascribed to them in the Investment Agreement):
ARTICLE XI
REGISTRATION RIGHTS
Section 11.1. REGISTRATION STATEMENTS.
(a) Filing of Registration Statement. Subject to the terms and
conditions of this Agreement, the Company shall file with the SEC within
forty-five (45) days following the Subscription Date a registration statement
on Form S-3 under the Securities Act or such other form as the SEC deems
appropriate (the "Registration Statement") for the registration of the resale
by the Investor of the Registrable Securities.
(b) Effectiveness of the Registration Statement. The Company shall
use its best efforts to have the Registration Statement declared effective by
the SEC by no later than ninety (90) days after Subscription Date and to
ensure that the Registration Statement remains in effect throughout the term
of this Agreement as set forth in Section 4.2, subject to the terms and
conditions of this Agreement.
(c) Failure to Obtain Effectiveness of Registration Statement. In
the event the Company fails for any reason to obtain the effectiveness of a
Registration Statement within the time period set forth in Section 1.1(b),
the Company shall pay to the Investor, within three (3) Trading Days of the
date by which such Registration Statement was required to have been declared
effective, $15,000 in immediately available funds into an account designated
by the Investor; provided, however, that such amount shall not be payable
with respect to the postponement of the effectiveness of a Registration
Statement (or use of the underlying prospectus) pursuant to Section 1.1(e).
Such payment shall be made by wire transfer of immediately available funds to
an account designated by the Investor.
(d) Failure to Maintain Effectiveness of Registration Statement.
In the event the Company fails to maintain the effectiveness of a Registration
Statement (or the underlying prospectus) throughout the period set forth in
Section 4.2, other than temporary suspensions as set forth in Section 1.1(e),
and the Investor holds any Registrable Securities at any time during the
period of such ineffectiveness (an "Ineffective Period"), the Company shall
pay to the Investor in immediately available funds into an account designated
by the Investor an amount equal to one percent (1%) of the aggregate Purchase
Price of all of the Registrable Securities then held by the Investor for
the each of the seven-calendar-day periods (or portion thereof) of an
Ineffective Period. Such amounts shall not be payable with respect to
suspensions of the effectiveness of a Registration Statement (or use of the
underlying prospectus), in accordance with Section 1.1(e). Such payments
shall be made on the first Trading Day after the earliest to occur of (i) the
expiration of the Commitment Period, (ii) the expiration of an Ineffective
Period, (iii) the expiration of the first twenty-eight calendar days of an
Ineffective Period and (iv) the expiration of each additional twenty-eight
calendar-day period during an Ineffective Period.
(e) Deferral or Suspension During a Blackout Period. Sections 1.1
(c) and (d) notwithstanding, if the Company shall furnish to the Investor
notice signed by the President and Chief Executive Officer of the Company
stating that the Board of Directors of the Company has, by duly authorized
resolution, determined in good faith that it would be seriously detrimental
to the Company and its shareholders for the Registration Statement to be filed
(or remain in effect) and it is therefore essential to defer the filing of
such Registration Statement (or temporarily suspend the effectiveness of
such Registration Statement or use of the related prospectus) (a "Blackout
Notice"), the Company shall have the right (i) immediately to defer such filing
for a period of not more than thirty (30) days beyond the date by which such
Registration Statement was otherwise required hereunder to be filed or (ii)
suspend such effectiveness for a period of not more than thirty (30) (any
such deferral or suspension period of up to thirty days, a "Blackout Period").
The Investor acknowledges that it would be seriously detrimental to the Company
and its shareholders for such Registration Statement to be filed (or remain in
effect) during a Blackout Period and therefore essential to defer such filing
(or suspend such effectiveness) during such Blackout Period and agrees
to cease any disposition of the Registrable Securities during such Blackout
Period. The Company may not utilize any of its rights under this Section
1.1(e) to defer the filing of a Registration Statement (or suspend its
effectiveness) more than twice in any twelve (12) month period.
Following such deferral or suspension, the Investor shall be entitled to
such additional number of shares of Common Stock as set forth in Section 2.6
of the Investment Agreement.
(f) Liquidated Damages. The Company and the Investor hereto
acknowledge and agree that the sums payable under subsections 1(c) or 1(d)
above shall constitute liquidated damages and not penalties. The parties
further acknowledge that (i) the amount of loss or damages likely to be
incurred is incapable or is difficult to precisely estimate, (ii) the amounts
specified in such subsections bear a reasonable proportion and are not
plainly or grossly disproportionate to the probable loss likely to be
incurred in connection with any failure by the Company to obtain or maintain
the effectiveness of a Registration Statement, (iii) one of the reasons for
the Company and the Investor reaching an agreement as to such amounts was
the uncertainty and cost of litigation regarding the question of actual
damages, and (iv) the Company and the Investor are sophisticated
business parties and have been represented by sophisticated and able legal
and financial counsel and negotiated this Agreement at arm's length.
ARTICLE XII
REGISTRATION PROCEDURES
Section 12.1 FILINGS; INFORMATION. The Company will effect the registration
and sale of such Registrable Securities in accordance with the intended
methods of disposition thereof. Without limiting the foregoing, the Company
in each such case will do the following as expeditiously as possible, but in
no event later than the deadline, if any, prescribed therefor in this Agreement:
(a) The Company shall (i) prepare and file with the SEC a
Registration Statement on Form S-3 (if use of such form is then available to
the Company pursuant to the rules of the SEC and, if not, on such other form
promulgated by the SEC for which the Company then qualifies, that counsel
for the Company shall deem appropriate and which form shall be available for
the sale of the Registrable Securities to be registered thereunder in accordance
with the provisions of this Agreement and in accordance with the intended
method of distribution of such Registrable Securities); (ii) use reasonable
best efforts to cause such filed Registration Statement to become and remain
effective (pursuant to Rule 415 under the Securities Act or otherwise); (iii)
prepare and file with the SEC such amendments and supplements to such
Registration Statement and the prospectus used in connection therewith as
may be necessary to keep such Registration Statement effective for the time
period prescribed by Section 1.1(b); and (iv) comply with the provisions of
the Securities Act with respect to the disposition of all securities covered
by such Registration Statement during such period in accordance with the
intended methods of disposition by the Investor set forth in such
Registration Statement.
(b) The Company shall file all necessary amendments to the
Registration Statement in order to effectuate the purpose of this Agreement,
the Investment Agreement, and the Warrant.
(c) If so requested by the managing underwriters, if any, or the
holders of a majority in aggregate principal amount of the Registrable
Securities being sold in connection with the filing of a Registration
Statement under the Securities Act for the offering on a continuous or
delayed basis in the future of all of the Registrable Securities (a "Shelf
Registration"), the Company shall (i) promptly incorporate in a prospectus
supplement or post-effective amendment such information as the managing
underwriters, if any, and such holders agree should be included therein,
and (ii) make all required filings of such prospectus supplement or
post-effective amendment as soon as practicable after the Company has
received notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment; provided, however, that
the Company shall not be required to take any action pursuant to this Section
2.1(c)(ii) that would, in the opinion of counsel for the Company, violate
applicable law.
(d) In connection with the filing of a Shelf Registration, the
Company shall enter into such agreements and take all such other reasonable
actions in connection therewith (including those reasonably requested by the
managing underwriters, if any, or the holders of a majority in aggregate
principal amount of the Registrable Securities being sold) in order to
expedite or facilitate the disposition of such Registrable Securities, and in
such connection, whether or not an underwriting agreement is entered into
and whether or not the registration is an underwritten registration, the
Company shall (i) make such representations and warranties to the holders of
such Registrable Securities and the underwriters, if any, with respect to the
business of the Company (including with respect to businesses or assets
acquired or to be acquired by the Company), and the Registration Statement,
prospectus and documents, if any, incorporated or deemed to be incorporated
by reference therein, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings, and
confirm such representations and warranties if and when requested; (ii) if
an underwriting agreement is entered into, it shall contain indemnification
provision and procedures no less favorable to the selling holders of such
Registrable Securities and the underwriters, if any, than those set forth
herein (or such other provisions and procedures acceptable to the holders of
a majority in aggregate principal amount of Registrable Securities covered
by such Registration Statement and the managing underwriters, if any); and
(iii) deliver such documents and certificates as may be reasonably requested
by the holders of a majority in aggregate principal amount of the Registrable
Securities being sold, their counsel and the managing underwriters, if any,
to evidence the continued validity of their representations and warranties made
pursuant to clause (i) above and to evidence compliance with any customary
conditions contained in the underwriting agreement or other agreement entered
into by the Company.
(e) Five (5) Trading Days prior to filing the Registration Statement
or prospectus, or any amendment or supplement thereto (excluding amendments
deemed to result from the filing of documents incorporated by reference
therein), the Company shall deliver to the Investor and one firm of counsel
representing the Investor, in accordance with the notice provisions of
Section 4.8, copies of the Registration Statement as proposed to be filed,
together with exhibits thereto, which documents will be subject to review by
the Investor and such counsel, and thereafter deliver to the Investor and
such counsel, in accordance with the notice provisions of Section 4.8, such
number of copies of the Registration Statement, each amendment and supplement
thereto (in each case including all exhibits thereto), the prospectus included
in the Registration Statement (including each preliminary prospectus) and such
other documents or information as the Investor or counsel may reasonably
request in order to facilitate the disposition of the Registrable Securities.
(f) The Company shall deliver, in accordance with the notice
provisions of Section 4.8, to each seller of Registrable Securities covered by
the Registration Statement such number of conformed copies of the Registration
Statement and of each amendment and supplement thereto (in each case including
all exhibits and documents incorporated by reference), such number of copies of
the prospectus contained in the Registration Statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 promulgated under the Securities Act relating to such
seller's Registrable Securities, and such other documents, as such seller
may reasonably request to facilitate the disposition of its Registrable
Securities.
(g) After the filing of the Registration Statement, the Company shall
promptly notify the Investor of any stop order issued or threatened by the SEC
in connection therewith and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered.
(h) The Company shall use its reasonable best efforts to (i)
register or qualify the Registrable Securities under such other securities or
blue sky laws of such jurisdictions in the United States as the Investor may
reasonably (in light of its intended plan of distribution) request, and (ii)
cause the Registrable Securities to be registered with or approved by such
other governmental agencies or authorities in the United States as may be
necessary by virtue of the business and operations of the Company and do any
and all other acts and things that may be reasonably necessary or advisable
to enable the Investor to consummate the disposition of the Registrable
Securities; provided, however, that the Company will not be required to
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph (h), subject
itself to taxation in any such jurisdiction, or consent or subject itself to
general service of process in any such jurisdiction.
(i) The Company shall immediately notify the Investor upon the
occurrence of any of the following events in respect of the Registration
Statement or related prospectus in respect of an offering of Registrable
Securities: (i) receipt of any request by the SEC or any other federal
or state governmental authority for additional information, amendments or
supplements to the Registration Statement or related prospectus; (ii) the
issuance by the SEC or any other federal or state governmental authority of
any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose; (iii) receipt
of any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding
for such purpose; (iv) the happening of any event that makes any statement
made in the Registration Statement or related prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in
any material respect or that requires the making of any changes in the
Registration Statement, related prospectus or documents so that, in the case
of the Registration Statement, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the related prospectus, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (v) the
Company's reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate, and the Company will promptly
make available to the Investor any such supplement or amendment to the related
prospectus.
(j) The Company shall enter into customary agreements and take such
other actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities (whereupon the Investor may, at its
option, require that any or all of the representations, warranties and covenants
of the Company also be made to and for the benefit of the Investor).
(k) The Company shall make available to the Investor (and will
deliver to Investor's counsel), subject to restrictions imposed by the United
States federal government or any agency or instrumentality thereof, copies of
all correspondence between the SEC and the Company, its counsel or its
auditors concerning the Registration Statement and will also make available for
inspection by the Investor and any attorney, accountant or other professional
retained by the Investor (collectively, the "Inspectors"), all financial and
other records, pertinent corporate documents and properties of the Company
(collectively, the "Records") as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the Company's
officers and employees to supply all information reasonably requested by any
Inspectors in connection with the Registration Statement. Records that the
Company determines, in good faith, to be confidential and that it notifies
the Inspectors are confidential shall not be disclosed by the Inspectors unless
(i) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in the Registration Statement or (ii) the disclosure
or release of such Records is requested or required pursuant to oral questions,
interrogatories, requests for information or documents or a subpoena or
other order from a court of competent jurisdiction or other process; provided,
however, that prior to any disclosure or release pursuant to clause (ii), the
Inspectors shall provide the Company with prompt notice of any such request
or requirement so that the Company may seek an appropriate protective order
or waive such Inspectors' obligation not to disclose such Records; and,
provided, further, that if failing the entry of a protective order or the
waiver by the Company permitting the disclosure or release of such Records,
the Inspectors, upon advice of counsel, are compelled to disclose such Records,
the Inspectors may disclose that portion of the Records that counsel has advised
the Inspectors that the Inspectors are compelled to disclose. The Investor
agrees that information obtained by it solely as a result of such inspections
(not including any information obtained from a third party who, insofar as is
known to the Investor after reasonable inquiry, is not prohibited from
providing such information by a contractual, legal or fiduciary obligation
to the Company) shall be deemed confidential and shall not be used by it as
the basis for any market transactions in the securities of the Company or
its affiliates unless and until such information is made generally available
to the public. The Investor further agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction,
give notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential.
(l) To the extent required by law or reasonably necessary to effect
a sale of Registrable Securities in accordance with prevailing business
practices at the time of any sale of Registrable Securities pursuant to a
Registration Statement, the Company shall deliver to the Investor a signed
counterpart, addressed to the Investor, of (1) an opinion or opinions of
counsel to the Company, and (2) a comfort letter or comfort letters from the
Company's independent publicaccountants, each in customary form and covering
such matters of the type customarily covered by opinions or comfort letters,
as the case may be, as the Investor therefor reasonably requests.
(m) The Company shall otherwise comply with all applicable rules
and regulations of the SEC, including, without limitation, compliance with
applicable reporting requirements under the Exchange Act.
(n) The Company shall appoint a transfer agent and registrar for
all of the Registrable Securities covered by such Registration Statement not
later than the effective date of such Registration Statement.
(o) The Company may require the Investor to promptly furnish in
writing to the Company such information as may be legally required in
connection with such registration including, without limitation, all such
information as may be requested by the SEC or the National Association of
Securities Dealers. The Investor agrees to provide such information requested
in connection with such registration within ten (10) business days after
receiving such written request and the Company shall not be responsible for
any delays in obtaining or maintaining the effectiveness of the Registration
Statement caused by the Investor's failure to timely provide such information.
Section 12.2 REGISTRATION EXPENSES. In connection with each Registration
Statement, the Company shall pay all registration expenses incurred in
connection with the registration thereunder (the "Registration Expenses"),
including, without limitation: (i) all registration, filing, securities
exchange listing and fees required by the National Association of Securities
Dealers, (ii) all registration, filing, qualification and other fees and
expenses of compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel in connection with blue sky qualifications
of the Registrable Securities), (iii) all word processing, duplicating,
printing, messenger and delivery expenses, (iv) the Company's internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (v) the fees and expenses
incurred by the Company in connection with the listing of the Registrable
Securities, (vi) reasonable fees and disbursements of counsel for the Company
and customary fees and expenses for independent certified public accountants
retained by the Company (including the expenses of any special audits or
comfort letters or costs associated with the delivery by independent certified
public accountants of such special audit(s) or comfort letter(s) requested
pursuant to Section 2.1(l) hereof), (vii) the fees and expenses of any special
experts retained by the Company in connection with such registration, (viii)
all reasonable fees and expenses of one firm of counsel for the Investor
retained as the Investor's counsel with respect to such Registration
Statement up to an amount of $5,000, unless a greater amount is required due
the nature of the review performed by Investor's counsel (an estimate of such
greater fees and expenses of such firm of counsel to be provided to the Company
prior to the undertaking of such counsel's review), (ix) premiums and other
costs of policies of insurance against liabilities arising out of any public
offering of the Registrable Securities being registered, and (x) any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding underwriting fees, discounts, transfer taxes or
commissions, if any, attributable to the sale of Registrable Securities,
which shall be payable by each holder of Registrable Securities pro rata on
the basis of the number of Registrable Securities of each such holder that
are included in a registration under this Agreement.
ARTICLE XIII
INDEMNIFICATION AND CONTRIBUTION
Section 13.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless the Investor, its partners, Affiliates, officers, directors,
employees and duly authorized agents, and each Person or entity, if any, who
controls the Investor within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, together with the partners, Affiliates,
officers, directors, employees and duly authorized agents of such controlling
Person or entity (collectively, the "Controlling Persons"), from and against
any loss, claim, damage, liability, costs and expenses (including, without
limitation, reasonable attorneys' fees and disbursements and costs and expenses
of investigating and defending any such claim) (collectively, "Damages"), joint
or several, and any action or proceeding in respect thereof to which the
Investor, its partners, affiliates, officers, directors, employees and duly
authorized agents, and any Controlling Person, may become subject under the
Securities Act or otherwise, as incurred, insofar as such Damages (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement, or in any preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement relating to the Registrable
Securities or arises out of, or are based upon, any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall reimburse
the Investor, its partners, affiliates, officers, directors, employees
and duly authorized agents, and each such Controlling Person, for any legal
and other expenses reasonably incurred by the Investor, its partners,
affiliates, officers, directors, employees and duly authorized agents, or
any such Controlling Person, as incurred, in investigating or defending or
preparing to defend against any such Damages or actions or proceedings;
provided, however, that the Company shall not be liable to the extent that
any such Damages arise out of the Investor's failure to send or give a copy
of the final prospectus or supplement to the persons asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to
such person if such statement or omission was corrected in such final
prospectus or supplement; provided, further, that the Company shall not be
liable to the extent that any such Damages arise out of or are based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement, or any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by the
Investor or any other person who participates as an underwriter in the
offering or sale of such securities, in either case, specifically stating that
it is for use in the preparation thereof.
Section 13.2 CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after receipt
by any person or entity in respect of which indemnity may be sought pursuant to
Section 3.1 (an "Indemnified Party") of notice of any claim or the commencement
of any action, the Indemnified Party shall, if a claim in respect thereof is to
be made against the person or entity against whom such indemnity may be sought
(the "Indemnifying Party"), notify the Indemnifying Party in writing of the
claim or the commencement of such action. In the event an Indemnified Party
shall fail to give such notice as provided in this Section 3.2 and the
Indemnifying Party to whom notice was not given was unaware of the proceeding
to which such notice would have related and was materially prejudiced by the
failure to give such notice, the indemnification provided for in Section 3.1
shall be reduced to the extent of any actual prejudice resulting from such
failure to so notify the Indemnifying Party; provided, however, that the failure
to notify the Indemnifying Party shall not relieve the Indemnifying Party
from any liability that it may have to an Indemnified Party otherwise
than under Section 3.1. If any such claim or action shall be brought against
an Indemnified Party, and it shall notify the Indemnifying Party thereof, the
Indemnifying Party shall be entitled to participate therein, and, to the
extent that it wishes, jointly with any other similarly notified Indemnifying
Party, to assume the defense thereof with counsel reasonably satisfactory to
the Indemnified Party. After notice from the Indemnifying Party to the
Indemnified Party of its election to assume the defense of such claim or
action, the Indemnifying Party shall not be liable to the Indemnified Party
for any legal or other expenses subsequently incurred by the Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Indemnified Party shall have the
right to employ separate counsel to represent the Indemnified Party and its
Controlling Persons who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by the Indemnified Party
against the Indemnifying Party, but the fees and expenses of such counsel shall
be for the account of such Indemnified Party, unless (i) the Indemnifying Party
and the Indemnified Party shall have mutually agreed to the retention of
such counsel or (ii) in the reasonable judgment of the Company and such
Indemnified Party, representation of both parties by the same counsel would
be inappropriate due to actual or potential conflicts of interest between them,
it being understood, however, that the Indemnifying Party shall not, in
connection with any one such claim or action or separate but substantially
similar or related claims or actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all Indemnified Parties, or for fees
and expenses that are not reasonable. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of
any claim or pending or threatened proceeding in respect of which the
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out
of such claim or proceeding. Whether or not the defense of any claim or action
is assumed by the Indemnifying Party, such Indemnifying Party will not be
subject to any liability for any settlement made without its consent, which
consent will not be unreasonably withheld.
Section 13.3 OTHER INDEMNIFICATION. Indemnification similar to that specified
in the preceding paragraphs of this Article 3 (with appropriate modifications)
shall be given by the Company with respect to any required registration or other
qualification of securities under any federal or state law or regulation of
any governmental authority other than the Securities Act. The provisions of
this Article III shall be in addition to any other rights to indemnification,
contribution or other remedies which an Indemnified Party may have pursuant to
law, equity, contract or otherwise.
Section 13.4 CONTRIBUTION. If the indemnification and reimbursement
obligations provided for in any section of this Article III is unavailable or
insufficient to hold harmless the Indemnified Parties in respect of any
Damages referred to herein, then the Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Damages as between the Company on the
one hand and the Investor on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of the Investor in connection
with such statements or omissions, as well as other equitable considerations.
The relative fault of the Company on the one hand and of the Investor on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
such party, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Investor agree that it would not be just and equitable if
contribution pursuant to this Section 3.4 were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Party as a result of the Damages referred
to in the immediately preceding paragraph shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 3.4, the Investor shall in no event be required to contribute any amount
in excess of the amount by which the total price at which the Registrable
Securities of the Investor were sold to the public (less underwriting discounts
and commissions) exceeds the amount of any damages which the Investor has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 NO OUTSTANDING REGISTRATION RIGHTS. The Company represents and
warrants to the Investor that, except as disclosed in the SEC Documents, there
is not in effect on the date hereof any agreement by the Company pursuant to
which any holders of securities of the Company have a right to cause the
Company to register or qualify such securities under the Securities Act or
any securities or blue sky laws of any jurisdiction.
Section 14.2 TERM. The registration rights provided to the holders of
Registrable Securities hereunder shall terminate at such time as all Registrable
Securities have been issued and have ceased to be Registrable Securities.
Notwithstanding the foregoing, paragraphs (c) and (d) of Section 1.1, Article
III, Section 4.8, and Section 4.9 shall survive the termination of this
Agreement.
Section 14.3 RULE 144. The Company will file in a timely manner, information,
documents and reports in compliance with the Securities Act and the Exchange
Act and will, at its expense,promptly take such further action as holders of
Registrable Securities may reasonably request to enable such holders of
Registrable Securities to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
(a) Rule 144 under the Securities Act ("Rule 144"), as such Rule may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted by
the SEC. If at any time the Company is not required to file such reports, it
will, at its expense, forthwith upon the written request of any holder of
Registrable Securities , make available adequate current public information
with respect to the Company within the meaning of paragraph (c)(2) of Rule 144
or such other information as necessary to permit sales pursuant to Rule 144.
Upon the request of the Investor, the Company will deliver to the Investor a
written statement, signed by the Company's principal financial officer, as to
whether it has complied with such requirements.
Section 14.4 CERTIFICATE. The Company will, at its expense, forthwith upon
the request of any holder of Registrable Securities, deliver to such holder
a certificate, signed by the Company's principal financial officer, stating
(a) the Company's name, address and telephone number (including area code),
(b) the Company's Internal Revenue Service identification number, (c) the
Company's Commission file number, (d) the number of shares of each class of
Stock outstanding as shown by the most recent report or statement published
by the Company, and (e) whether the Company has filed the reports required to
be filed under the Exchange Act for a period of at least ninety (90) days prior
to the date of such certificate and in addition has filed the most recent
annual report required to be filed thereunder.
Section 14.5 AMENDMENT AND MODIFICATION. Any provision of this Agreement
may be waived, provided that such waiver is set forth in a writing executed by
both parties to this Agreement. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of the holders of a
majority of the then outstanding Registrable Securities. Notwithstanding the
foregoing, the waiver of any provision hereof with respect to a matter that
relates exclusively to the rights of holders of Registrable Securities whose
securities are being sold pursuant to a Registration Statement and does not
directly or indirectly affect the rights of other holders of Registrable
Securities may be given by holders of at least a majority of the Registrable
Securities being sold by such holders; provided that the provisions of this
sentence may not be amended, modified or supplemented except in accordance with
the provisions of the immediately preceding sentence. No course of dealing
between or among any Person having any interest in this Agreement will be
deemed effective to modify, amend or discharge any part of this Agreement or
any rights or obligations of any person under or by reason of this Agreement.
Section 14.6 SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT. This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. The Investor may
assign its rights under this Agreement to any subsequent holder the Registrable
Securities, provided that the Company shall have the right to require any holder
of Registrable Securities to execute a counterpart of this Agreement as a
condition to such holder's claim to any rights hereunder. This Agreement,
together with the Investment Agreement and the Warrant(s) sets forth the entire
agreement and understanding between the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.
Section 14.7 SEPARABILITY. In the event that any provision of this Agreement
or the application of any provision hereof is declared to be illegal, invalid
or otherwise unenforceable by a court of competent jurisdiction, the remainder
of this Agreement shall not be affected except to the extent necessary to delete
such illegal, invalid or unenforceable provision unless that provision held
invalid shall substantially impair the benefits of the remaining portions of
this Agreement.
Section 14.8 NOTICES. All notices, demands, requests, consents, approvals,
and other communications required or permitted hereunder shall be in writing
and shall be (i) deposited in the mail, registered or certified, return receipt
requested, postage prepaid, (ii) delivered by reputable air courier service with
charges prepaid, or (iii) transmitted by hand delivery, telegram or facsimile,
addressed as set forth below or to such other address as such party shall have
specified most recently by written notice. Any notice or other communication
required or permitted to be given hereunder shall be deemed effective (a) upon
hand delivery or delivery by facsimile, with accurate confirmation generated by
the transmitting facsimile machine, at the address or number designated below
(if delivered on a business day during normal business hours where such notice
is to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following the date
of mailing by express courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be:
If to the Company:
Cytogen Corporation
000 Xxxxxxx Xxxx Xxxx XX0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: H. Xxxxxx Xxxxxx, Ph.D.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Cytogen Corporation
000 Xxxxxxx Xxxx Xxxx XX0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx., Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to the Investor:
Xxxx Xxxxxx
Kingsbridge Capital Limited
c/o Kingsbridge Corporate Services Limited
Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxx Xxxxxxx
Xxxxxxxx xx Xxxxxxx
Telephone: 000-000-00-000-000
Facsimile: 011-353-45-482-003
with a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Either party hereto may from time to time change its address or facsimile
number for notices under this Section 4.8 by giving at least ten (10) days'
prior written notice of such changed address or facsimile number to the other
party hereto.
Section 14.9 GOVERNING LAW. This Agreement shall be construed under the
laws of the State of Delaware, without giving effect to provisions regarding
conflicts of law or choice of law.
Section 14.10 HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall
they affect their meaning, construction or effect.
Section 14.11 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original instrument and
all of which together shall constitute one and the same instrument.
Section 14.12 FURTHER ASSURANCES. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out
the provisions and purposes of this Agreement and the transactions contemplated
hereby.
Section 14.13 ABSENCE OF PRESUMPTION. This Agreement shall be construed
without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted.
Section 14.14 REMEDIES. In the event of a breach or a threatened breach by
any party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach will be entitled to specific performance
of its rights under this Agreement or to injunctive relief, in addition to being
entitled to exercise all rights provided in this Agreement and granted by law.
The parties agree that the provisions of this Agreement shall be specifically
enforceable, it being agreed by the parties that the remedy at law, including
monetary damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense or objection in any action for
specific performance or injunctive relief that a remedy at law would be adequate
is waived.
IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be executed by the undersigned, thereunto duly authorized, as of
the date first set forth above.
CYTOGEN CORPORATION
By:
H. Xxxxxx Xxxxxx, Ph.D.
President and Chief Executive Officer
KINGSBRIDGE CAPITAL LIMITED
By:
Valentine X'Xxxxxxxx
Director
EXHIBIT C
FORM OF WARRANT
WARRANT
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE
BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO A TRANSACTION WHICH IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION. THE HOLDER OF THIS CERTIFICATE IS THE
BENEFICIARY OF CERTAIN OBLIGATIONS OF THE COMPANY SET FORTH IN A
PRIVATE EQUITY LINE AGREEMENT, DATED AS OF OCTOBER 23, 1998,
BETWEEN CYTOGEN CORPORATION AND KINGSBRIDGE CAPITAL LIMITED. A
COPY OF THE PORTION OF THE AFORESAID AGREEMENT EVIDENCING SUCH
OBLIGATIONS MAY BE OBTAINED FROM CYTOGEN CORPORATION'S EXECUTIVE
OFFICES.
OCTOBER 23, 1998
Warrant to Purchase up to 200,000 Shares of Common Stock of
Cytogen Corporation.
Cytogen Corporation, a Delaware corporation (the "Company"),
hereby agrees that Kingsbridge Capital Limited (the "Investor") or
any other Warrant Holder is entitled, on the terms and conditions
set forth below, to purchase from the Company at any time during
the Exercise Period up to 200,000 fully paid and nonassessable
shares of Common Stock, par value $.01 per share, of the Company
(the "Common Stock"), as the same may be adjusted from time to time
pursuant to Section 6 hereof, at the Exercise Price (hereinafter
defined), as the same may be adjusted pursuant to Section 6 hereof.
The resale of the shares of Common Stock or other securities
issuable upon exercise or exchange of this Warrant is subject to
the provisions of the Registration Rights Agreement (as defined
below).
Section 1. Definitions.
"Agreement" shall mean the Private Equity Line Agreement,
dated the date hereof, between the Company and the Investor.
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"Capital Shares" shall mean the Common Stock and any
shares of any other class of common stock whether now or hereafter
authorized, having the right to participate in the distribution of
earnings and assets of the Company.
"Date of Exercise" shall mean the date that the advance
copy of the Exercise Form is sent by facsimile to the Company,
provided that the original Warrant and Exercise Form are received
by the Company within reasonable time thereafter. If the Warrant
Holder has not sent advance notice by facsimile, the Date of
Exercise shall be the date the original Exercise Form is received
by the Company.
"Exercise Period" shall mean that period beginning on the
181st day after the Subscription Date and continuing until the
expiration of the three-year period thereafter; provided that such
period shall be extended one day for each day after such 181st day
after the Subscription Date, that a Registration Statement is not
effective during the period such Registration Statement is required
to be effective pursuant to the Registration Rights Agreement.
"Exercise Price" as of the date hereof shall mean one
hundred twenty five percent (125%) of the average of the lowest
intra-day prices per share of Common Stock for the five (5) days
preceeding the Subscription Date and shall hereafter be subject to
the adjustments provided for in Section 6 of this Warrant. "Lowest
intra-day price" shall mean the lowest price of the Common Stock
(as reported by Bloomberg L.P.) during any Trading Day.
"Per Share Warrant Value" shall mean the difference
resulting from subtracting the Exercise Price from the Bid Price of
one share of Common Stock on the Trading Day next preceding the
Date of Exercise.
"Registration Rights Agreement" shall mean the
registration rights agreement, dated the date hereof between the
Company and the Investor.
"Subscription Date" shall mean the date on which the
Agreement is executed and delivered by the parties hereto.
"Warrant Holder" shall mean the Investor or any assignee
or transferee of all or any portion of this Warrant; and
other capitalized terms used but not defined herein shall
have their respective meanings set forth in the Agreement.
Section 2. Exercise; Cashless Exercise.
a. Method of Exercise. This Warrant may be
exercised in whole or in part (but not as to a fractional share of
Common Stock), at any time and from time to time during the
Exercise Period, by the Warrant Holder by (i) surrender of this
Warrant, with the form of exercise attached hereto as Exhibit A
duly executed by the Warrant Holder (the "Exercise Notice"), to the
Company at the address set forth in Section 13 hereof, accompanied
by payment of the Exercise Price multiplied by the number of shares
of Common Stock for which this Warrant is being exercised (the
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"Aggregate Exercise Price") or (ii) telecopying an executed and
completed Exercise Notice to the Company and delivering to the
Company within three business days thereafter the original Exercise
Notice, this Warrant and the Aggregate Exercise Price. Each date
on which an Exercise Notice is received by the Company in
accordance with clause (i) and each date on which the Exercise
Notice is telecopied to the Company in accordance with clause (ii)
above shall be deemed an "Exercise Date".
b. Payment of Aggregate Exercise Price. Subject to
paragraph (c) below, payment of the Aggregate Exercise Price shall
be made by check or bank draft payable to the order of the Company
or by wire transfer to an account designated by the Company. If
the amount of the payment received by the Company is less than the
Aggregate Exercise Price, the Warrant Holder will be notified of
the deficiency and shall make payment in that amount within five
(5) business days. In the event the payment exceeds the Aggregate
Exercise Price, the Company will refund the excess to the Warrant
Holder within three (3) business days of receipt.
c. Cashless Exercise. If a Registration Statement
is not effective for the resale of the Warrant Shares by the
Warrant Holder, as an alternative to payment of the Aggregate
Exercise Price in accordance with paragraph (b) above, the Warrant
Holder may elect to effect a cashless exercise by so indicating on
the Exercise Notice and including a calculation of the number of
shares of Common Stock to be issued upon such exercise in
accordance with the terms hereof (a "Cashless Exercise"). In the
event of a Cashless Exercise, the Warrant Holder shall surrender
this Warrant for that number of shares of Common Stock determined
by (i) multiplying the number of Warrant Shares for which this
Warrant is being exercised by the Per Share Warrant Value and (ii)
dividing the product by the Bid Price of one share of the Common
Stock on the Trading Day next preceding the Date of Exercise.
d. Replacement Warrant. In the event that the
Warrant is not exercised in full, the number of Warrant Shares
shall be reduced by the number of such Warrant Shares for which
this Warrant is exercised, and the Company, at its expense, shall
forthwith issue and deliver to or upon the order of the Warrant
Holder a new Warrant of like tenor in the name of the Warrant
Holder or as the Warrant Holder may request, reflecting such
adjusted number of Warrant Shares.
Section 3. Ten Percent Limitation. The Warrant
Holder may not exercise this Warrant such that the number of
Warrant Shares to be received pursuant to such exercise aggregated
with all other shares of Common Stock then owned by the Warrant
Holder beneficially or deemed beneficially owned by the Warrant
Holder would result in the Warrant Holder owning more than 9.9% of
all of such Common Stock as would be outstanding on such Closing
Date, as determined in accordance with Section 16 of the Exchange
Act and the rules and regulations promulgated thereunder. As of
any date prior to the Date of Exercise, the aggregate number of
shares of Common Stock into which this Warrant is exercisable,
together with all other shares of Common Stock then beneficially
owned (as such term is defined in Rule 16a-1 under the Exchange
Act) by such Warrant Holder and its affiliates, shall not exceed
9.9% of the total outstanding shares of Common Stock as of such
date.
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Section 4. Delivery of Stock Certificates.
a. Subject to the terms and conditions of this Warrant,
as soon as practicable after the exercise of this Warrant in full
or in part, and in any event within three (3) Trading Days
thereafter, the Company at its expense (including, without
limitation, the payment by it of any applicable issue taxes) will
cause to be issued in the name of and delivered to the Warrant
Holder, or as the Warrant Holder may lawfully direct, a certificate
or certificates for the number of validly issued, fully paid and
non-assessable Warrant Shares to which the Warrant Holder shall be
entitled on such exercise, together with any other stock or other
securities or property (including cash, where applicable) to which
the Warrant Holder is entitled upon such exercise in accordance
with the provisions hereof; provided, however, that any such
delivery to a location outside of the United States shall be made
within five (5) Trading Days after the exercise of this Warrant in
full or in part.
b. This Warrant may not be exercised as to fractional
shares of Common Stock. In the event that the exercise of this
Warrant, in full or in part, would result in the issuance of any
fractional share of Common Stock, then in such event the Warrant
Holder shall receive in cash an amount equal to the Bid Price of
such fractional share within three (3) Trading Days.
Section 5. Representations, Warranties and Covenants
of the Company.
a. The Company shall take all necessary action and
proceedings as may be required and permitted by applicable law,
rule and regulation for the legal and valid issuance of this
Warrant and the Warrant Shares to the Warrant Holder.
b. From the date hereof through the last date on which
this Warrant is exercisable, the Company shall take all steps
reasonably necessary and within its control to insure that the
Common Stock remains listed or quoted on the Principal Market.
c. The Warrant Shares, when issued in accordance with
the terms hereof, will be duly authorized and, when paid for or
issued in accordance with the terms hereof, shall be validly
issued, fully paid and non-assessable.
d. The Company has authorized and reserved for issuance
to the Warrant Holder the requisite number of shares of Common
Stock to be issued pursuant to this Warrant. The Company shall at
all times reserve and keep available, solely for issuance and
delivery as Warrant Shares hereunder, such shares of Common Stock
as shall from time to time be issuable as Warrant Shares.
Section 6. Adjustment of the Exercise Price. The
Exercise Price and, accordingly, the number of Warrant Shares
issuable upon exercise of the Warrant, shall be subject to
adjustment from time to time upon the happening of certain events
as follows; provided, however, that nothing contained in this
Section 6 shall be construed to require such adjustment to the
exercise price of this Warrant for the payment of any placement
agent, in Capital Stock or otherwise, in consideration of the
transactions contemplated by the Agreement:
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a. Reclassification, Consolidation, Merger or Mandatory
Share Exchange. If the Company, at any time while this Warrant is
unexpired and not exercised in full, (i) reclassifies or changes
its Outstanding Capital Shares (other than a change in par value,
or from par value to no par value per share, or from no par value
per share to par value or as a result of a subdivision or
combination of outstanding securities issuable upon exercise of the
Warrant) or (ii) consolidates, merges or effects a mandatory share
exchange with or into another corporation (other than a merger or
mandatory share exchange with another corporation in which the
Company is a continuing corporation and that does not result in any
reclassification or change, other than a change in par value, or
from par value to no par value per share, or from no par value per
share to par value, or as a result of a subdivision or combination
of Outstanding Capital Shares issuable upon exercise of the
Warrant) at any time while this Warrant is unexpired and not
exercised in full, then in any such event the Company, or such
successor or purchasing corporation, as the case may be, shall,
without payment of any additional consideration therefore, amend
this Warrant or issue a new Warrant providing that the Warrant
Holder shall have rights not less favorable to the holder than
those then applicable to this Warrant and to receive upon exercise
under such amendment of this Warrant or new Warrant, in lieu of
each share of Common Stock theretofore issuable upon exercise of
the Warrant hereunder, the kind and amount of shares of stock,
other securities, money or property receivable upon such
reclassification, change, consolidation, merger, mandatory share
exchange, sale or transfer by the holder of one share of Common
Stock issuable upon exercise of the Warrant had the Warrant been
exercised immediately prior to such reclassification, change,
consolidation, merger, mandatory share exchange or sale or
transfer. Such amended Warrant shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 6.1. The provisions of
this subsection (a) shall similarly apply to successive
reclassifications, changes, consolidations, mergers, mandatory
share exchanges and sales and transfers.
b. Subdivision or Combination of Shares. If the
Company, at any time while this Warrant is unexpired and not
exercised in full, shall subdivide its Common Stock, the Exercise
Price shall be proportionately reduced as of the effective date of
such subdivision, or, if the Company shall take a record of holders
of its Common Stock for the purpose of so subdividing, as of such
record date, whichever is earlier. If the Company, at any time
while this Warrant is unexpired and not exercised in full, shall
combine its Common Stock, the Exercise Price shall be
proportionately increased as of the effective date of such
combination, or, if the Company shall take a record of holders of
its Common Stock for the purpose of so combining, as of such record
date, whichever is earlier.
c. Stock Dividends. If the Company, at any time while
this Warrant is unexpired and not exercised in full, shall pay a
dividend in its Capital Shares, or make any other distribution of
its Capital Shares, then the Exercise Price shall be adjusted, as
of the date the Company shall take a record of the holders of its
Capital Shares for the purpose of receiving such dividend or other
distribution (or if no such record is taken, as at the date of such
payment or other distribution), to that price determined by
multiplying the Exercise Price in effect immediately prior to such
payment or other distribution by a fraction:
1. the numerator of which shall be the total number of
Outstanding Capital Shares immediately prior to such dividend or
distribution, and
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2. the denominator of which shall be the total number
of Outstanding Capital Shares immediately after such dividend or
distribution. The provisions of this subsection (c) shall not
apply under any of the circumstances for which an adjustment is
provided in subsections (a) or (b).
d. Issuance of Additional Capital Shares. If the Company,
at any time while this Warrant is unexpired and not exercised in
full, shall issue any additional Capital Shares ("Additional
Capital Shares"), otherwise than as provided in the foregoing
subsections (a) through (c) above, at a price per share less, or
for other consideration lower, than the Bid Price in effect
immediately prior to such issuance, or without consideration, then
upon such issuance the Exercise Price shall be reduced to that
price determined by multiplying the Exercise Price in effect
immediately prior to such event by a fraction:
1. the numerator of which shall be the number of
Outstanding Capital Shares immediately prior to the issuance of the
Additional Capital Shares plus the number of Capital Shares that
the aggregate consideration for the total number of such Additional
Capital Shares so issued would purchase at the then effective Bid
Price, and
2. the denominator of which shall be the number of
Outstanding Capital Shares immediately after the issuance of the
Additional Capital Shares. The provisions of this subsection (d)
shall not apply under any of the circumstances for which an
adjustment is provided in subsections (a), (b) or (c).
The provisions of this subsection (d) shall not apply to the
issuance of any Additional Capital Shares that are issued pursuant
to the exercise of any warrants, options or other subscription or
purchase rights or pursuant to the exercise of any conversion or
exchange rights in any convertible or exchangeable securities.
e. Issuance of Warrants, Options or Other Rights. If
the Company, at any time while this Warrant is unexpired and not
exercised in full, shall issue any warrants, options or other
rights to subscribe for or purchase any Additional Capital Shares,
other than employee stock option and stock purchase plans granted
in the ordinary course of business, and the price per share for
which Additional Capital Shares may at any time thereafter be
issuable pursuant to such warrants, options or other rights shall
be less than the Bid Price in effect immediately prior to such
issuance, then, upon the issuance of such warrants, options or
other rights, the Exercise Price shall be adjusted as provided in
subsection (d) hereof on the basis that:
1. the maximum number of Additional Capital Shares
issuable on the date of determination (subject to adjustment on the
date(s) of exercise) pursuant to all such warrants, options or
other rights shall be deemed to have been issued as of the date of
actual issuance of such warrants, options or other rights, and
2. the aggregate consideration for such maximum number
of Additional Capital Shares issuable pursuant to such warrants,
options or other rights, shall be deemed to be the consideration
received by the Company for the issuance of such warrants, options,
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or other rights plus the minimum consideration to be received by
the Company for the issuance of Additional Capital Shares pursuant
to such warrants, options, or other rights.
f. Issuance of Convertible or Exchangeable Securities.
If the Company, at any time while this Warrant is unexpired and not
exercised in full, shall issue any securities convertible into or
exchangeable for Capital Shares and the consideration per share for
which Additional Capital Shares may at any time thereafter be
issuable pursuant to the terms of such convertible or exchangeable
securities shall be less than the Bid Price in effect immediately
prior to such issuance, then, upon the issuance of such convertible
or exchangeable securities, the Exercise Price shall be adjusted as
provided in subsection (d) hereof on the basis that:
1. the maximum number of Additional Capital Shares
necessary on the date of determination (subject to adjustment on
the date(s) of conversion or exchange) to effect the conversion or
exchange of all such convertible or exchangeable securities shall
be deemed to have been issued as of the date of issuance of such
convertible or exchangeable securities, and
2. the aggregate consideration for such maximum number
of Additional Capital Shares shall be deemed to be the
consideration received by the Company for the issuance of such
convertible or exchangeable securities plus the minimum
consideration received by the Company for the issuance of such
Additional Capital Shares pursuant to the terms of such convertible
or exchangeable securities.
No adjustment of the Exercise Price shall be made under this
subsection (f) upon the issuance of any convertible or exchangeable
securities that are issued pursuant to the exercise of any
warrants, options or other subscription or purchase rights
therefor, if the issuance of such warrants, options or other rights
was subject to subsection (e) hereof.
g. Adjustment of Number of Shares. Upon each
adjustment of the Exercise Price pursuant to any provisions of this
Section 6.1, the number of Warrant Shares issuable hereunder at the
option of the Warrant Holder shall be calculated, to the nearest
one hundredth of a whole share, multiplying the number of Warrant
Shares issuable prior to an adjustment by a fraction:
1. the numerator of which shall be the Exercise Price
before any adjustment pursuant to this Section 6.1; and
2. the denominator of which shall be the Exercise Price
after such adjustment.
h. Liquidating Dividends, Etc. If the Company, at any
while this Warrant is unexpired and not exercised in full, makes a
distribution of its assets or evidences of indebtedness to the
holders of its Capital Shares as a dividend in liquidation or by
way of return of capital (other than dividends paid or
distributions made in respect of preferred stock) or other than as
a dividend payable out of earnings or surplus legally available for
dividends under applicable law or any distribution to such holders
made in respect of the sale of all or substantially all of the
Company's assets (other than under the circumstances provided for
in the foregoing subsections (a) through (g)) while an exercise is
pending, then the Warrant Holder shall be entitled to receive upon
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such exercise of the Warrant in addition to the Warrant Shares
receivable in connection therewith, and without payment of any
consideration other than the Exercise Price, an amount in cash
equal to the value of such distribution per Capital Share
multiplied by the number of Warrant Shares that, on the record date
for such distribution, are issuable upon such exercise of the
Warrant (with no further adjustment being made following any event
which causes a subsequent adjustment in the number of Warrant
Shares issuable), and an appropriate provision therefor shall be
made a part of any such distribution. The value of a distribution
that is paid in other than cash shall be determined in good faith
by the Board of Directors of the Company.
i. Other Provisions Applicable to Adjustments Under
this Section. The following provisions will be applicable to the
making of adjustments in any Exercise Price hereinabove provided in
this Section 6.1:
1. Computation of Consideration. To the extent that
any Additional Capital Shares or any convertible or exchangeable
securities or any warrants, options or other rights to subscribe
for or purchase any Additional Capital Shares or any convertible or
exchangeable securities shall be issued for a cash consideration,
the consideration received by the Company therefor shall be deemed
to be the amount of the cash received by the Company therefor, or,
if such Additional Capital Shares or convertible or exchangeable
securities are offered by the Company for subscription, the
subscription price, or, if such Additional Capital Shares or
convertible or exchangeable securities are sold to or through
underwriters or dealers for public offering without a subscription
offering, the initial public offering price, in any such case
excluding any amounts paid or incurred by the Company for and in
the underwriting of, or otherwise in connection with the issue
thereof. To the extent that such issuance shall be for a
consideration other than cash, then, the amount of such
consideration shall be deemed to be the fair value of such
consideration at the time of such issuance as determined in good
faith by the Company's Board of Directors. The consideration for
any Additional Capital Shares issuable pursuant to any warrants,
options or other rights to subscribe for or purchase the same shall
be the consideration received by the Company for issuing such
warrants, options or other rights, plus the additional
consideration payable to the Company upon the exercise of such
warrants, options or other rights. The consideration for any
Additional Capital Shares issuable pursuant to the terms of any
convertible or exchangeable securities shall be the consideration
paid or payable to the Company in respect of the subscription for
or purchase of such convertible or exchangeable securities, plus
the additional consideration, if any, payable to the Company upon
the exercise of the right of conversion or exchange in such
convertible or exchangeable securities. In case of the issuance at
any time of any Additional Capital Shares or convertible or
exchangeable securities in payment or satisfaction of any dividend
upon any class of stock preferred as to dividends in a fixed
amount, the Company shall be deemed to have received for such
Additional Capital Shares or convertible or exchangeable securities
a consideration equal to the amount of such dividend so paid or
satisfied.
2. Readjustment of Exercise Price. Upon the expiration
of the right to convert or exchange any convertible or exchangeable
securities, or upon the expiration of any rights, options or
warrants, the issuance of which convertible or exchangeable
securities, rights, options or warrants effected an adjustment in
Exercise Price, if any such convertible or exchangeable securities
shall not have been converted or exchanged, or if any such rights,
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options or warrants shall not have been exercised, the number of
Capital Shares deemed to be issued and Outstanding by reason of the
fact that they were issuable upon conversion or exchange of any
such convertible or exchangeable securities or upon exercise of any
such rights, options, or warrants shall no longer be computed as
set forth above, and such Exercise Price shall forthwith be
readjusted and thereafter be the price that it would have been (but
reflecting any other adjustments in the Exercise Price made
pursuant to the provisions of this Section 6.1 after the issuance
of such convertible or exchangeable securities, rights, options or
warrants) had the adjustment of the Exercise Price made upon the
issuance or sale of such convertible or exchangeable securities or
issuance of rights, options or warrants been made on the basis of
the issuance only of the number of Additional Capital Shares
actually issued upon conversion or exchange of such convertible or
exchangeable securities, or upon the exercise of such rights,
options or warrants, and thereupon only the number of Additional
Capital Shares actually so issued, if any, shall be deemed to have
been issued and only the consideration actually received by the
Company (computed as set forth in sub-subsection (1. hereof) shall
be deemed to have been received by the Company. If the purchase
price provided for in any rights, options or warrants, or the
additional consideration (if any) payable upon the conversion or
exchange of any convertible or exchangeable securities, or the rate
at which any convertible or exchangeable securities are convertible
into or exchangeable for Capital Shares changes at any time (other
than under or by reason of provisions designed to protect against
dilution), the Exercise Price in effect at the time of the change
shall be adjusted to the Exercise Price that would have been in
effect at such time had such rights, options, warrants or
convertible or exchangeable securities still outstanding provided
for such changed purchase price, additional consideration or
conversion rate, as the case may be, at the time initially granted,
issued or sold.
j. In the event the Company shall, at a time while the
Warrant is unexpired and outstanding, take any action which
pursuant to subsections (a) through (h) of this Section 6.1 may
result in an adjustment of the Exercise Price, the Company shall
give to the Warrant Holder at its last address known to the Company
written notice of such action ten (10) days in advance of its
effective date in order to afford to the Warrant Holder an
opportunity to exercise the Warrant prior to such action becoming
effective.
Section 6.1 Notice of Adjustments. Whenever the
Exercise Price or number of Warrant Shares shall be adjusted
pursuant to Section 6.1 hereof, the Company shall promptly make a
certificate signed by its President or a Vice President and by its
Treasurer or Assistant Treasurer or its Secretary or Assistant
Secretary, setting forth in reasonable detail the event requiring
the adjustment, the amount of the adjustment, the method by which
such adjustment was calculated (including a description of the
basis on which the Company's Board of Directors made any
determination hereunder), and the Exercise Price and number of
Warrant Shares purchasable at that Exercise Price after giving
effect to such adjustment, and shall promptly cause copies of such
certificate to be mailed (by first class and postage prepaid) to
the Holder of the Warrant. In the event the Company shall, at a
time while the Warrant is unexpired and not exercised in full, take
any action that pursuant to subsections (a) through (g) of Section
6.1 may result in an adjustment of the Exercise Price, the Company
shall give to the Holder of the Warrant at its last address known
to the Company written notice of such action ten (10) days in
advance of its effective date in order to afford to the Holder of
the Warrant an opportunity to exercise the Warrant prior to such
action becoming effective.
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Section 7. No Impairment. The Company will not, by
amendment of its Articles of Incorporation or By-Laws or through
any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such action as may be necessary or appropriate in order to
protect the rights of the Warrant Holder against impairment.
Without limiting the generality of the foregoing, the Company
(a) will not increase the par value of any Warrant Shares above the
amount payable therefor on such exercise, and (b) will take all
such action as may be reasonably necessary or appropriate in order
that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares on the exercise of this Warrant.
Section 8. Rights As Stockholder. Prior to exercise
of this Warrant, the Warrant Holder shall not be entitled to any
rights as a stockholder of the Company with respect to the Warrant
Shares, including (without limitation) the right to vote such
shares, receive dividends or other distributions thereon or be
notified of stockholder meetings. However, in the event of any
taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a cash dividend)
or other distribution, any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, the Company
shall mail to each Warrant Holder, at least ten (10) days prior to
the date specified therein, a notice specifying the date on which
any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such
dividend, distribution or right.
Section 9. Replacement of Warrant. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of the Warrant and, in the case of any
such loss, theft or destruction of the Warrant, upon delivery of an
indemnity agreement or security reasonably satisfactory in form and
amount to the Company or, in the case of any such mutilation, on
surrender and cancellation of such Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of
like tenor.
Section 10. Choice of Law. This Agreement shall be
construed under the laws of the State of New York.
Section 11. Entire Agreement; Amendments. This
Warrant, the Registration Rights Agreement, and the Agreement
contain the entire understanding of the parties with respect to the
matters covered hereby and thereby. No provision of this Warrant
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 12. Restricted Securities.
a. Registration or Exemption Required. This Warrant has
been issued in a transaction exempt from the registration
requirements of the Securities Act in reliance upon the provisions
of Section 4(2) promulgated by the SEC under the Securities Act.
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This Warrant and the Warrant Shares issuable upon exercise of this
Warrant may not be resold except pursuant to an effective
registration statement or an exemption to the registration
requirements of the Securities Act and applicable state laws.
b. Legend. Any replacement Warrants issued pursuant to
Section 2 hereof and any Warrant Shares issued upon exercise
hereof, shall bear the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN
ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED OF,
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO A
TRANSACTION WHICH IS EXEMPT FROM, OR NOT SUBJECT
TO, SUCH REGISTRATION. THE HOLDER OF THIS
CERTIFICATE IS THE BENEFICIARY OF CERTAIN
OBLIGATIONS OF THE COMPANY SET FORTH IN A PRIVATE
EQUITY LINE AGREEMENT, DATED AS OF OCTOBER 23,
1998, BETWEEN CYTOGEN CORPORATION AND KINGSBRIDGE
CAPITAL LIMITED. A COPY OF THE PORTION OF THE
AFORESAID AGREEMENT EVIDENCING SUCH OBLIGATIONS MAY
BE OBTAINED FROM THE COMPANY'S EXECUTIVE OFFICES."
Removal of such legend shall be in accordance with the legend
removal provisions in the Agreement.
c. No Other Legend or Stock Transfer Restrictions. No
legend other than the one specified in Section 12(b) has been or
shall be placed on the share certificates representing the Warrant
Shares and no instructions or "stop transfer orders," so called,
"stock transfer restrictions" or other restrictions have been or
shall be given to the Company's transfer agent with respect thereto
other than as expressly set forth in this Section 12.
d. Assignment. Assuming the conditions of Section
12(a) above regarding registration or exemption have been
satisfied, the Warrant Holder may sell, transfer, assign, pledge or
otherwise dispose of this Warrant, in whole or in part. The
Warrant Holder shall deliver a written notice to Company,
substantially in the form of the Assignment attached hereto as
Exhibit B, indicating the person or persons to whom the Warrant
shall be assigned and the respective number of warrants to be
assigned to each assignee. The Company shall effect the assignment
within ten (10) days, and shall deliver to the assignee(s)
designated by the Warrant Holder a Warrant or Warrants of like
tenor and terms for the appropriate number of shares.
28
e. Investor's Compliance. Nothing in this Section 12
shall affect in any way the Investor's obligations under any
agreement to comply with all applicable securities laws upon resale
of the Common Stock.
Section 13. Notices. All notices, demands, requests,
consents, approvals, and other communications required or permitted
hereunder shall be in writing and shall be (i) personally served,
(ii) deposited in the mail, registered or certified, return receipt
requested, postage prepaid, (iii) delivered by reputable air
courier service with charges prepaid, or (iv) transmitted by hand
delivery, telegram or facsimile, addressed as set forth below or to
such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon
hand delivery or delivery by facsimile (with accurate confirmation
generated by the transmitting facsimile machine) at the address or
number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than
on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the
date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications
shall be:
If to the Company:
Cytogen Corporation
000 Xxxxxxx Xxxx Xxxx XX0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: H. Xxxxxx Xxxxxx, Ph.D.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Cytogen Corporation
000 Xxxxxxx Xxxx Xxxx XX0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx., Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to the Investor:
Xxxx Xxxxxx
Kingsbridge Capital Limited
c/o Kingsbridge Corporate Services Limited
Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxx Xxxxxxx
Xxxxxxxx xx Xxxxxxx
Telephone: 000-000-00-000-000
Facsimile: 011-353-45-482-003
29
with a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Either party hereto may from time to time change its address or
facsimile number for notices under this Section 13 by giving at
least ten (10) days' prior written notice of such changed address
or facsimile number to the other party hereto.
Section 14. Miscellaneous. This Warrant and any term
hereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought. The
headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof. The
invalidity or unenforceability of any provision hereof shall in no
way affect the validity or enforceability of any other provision.
30
IN WITNESS WHEREOF, this Warrant was duly executed by the
undersigned, thereunto duly authorized, as of the date first set
forth above.
CYTOGEN CORPORATION
By:
H. Xxxxxx Xxxxxx, Ph.D.
President and Chief Executive Officer
Attested:
By:
Xxxxxx X. Xxxxx, Xx., Esq.
Vice President, General Counsel and Secretary
31
EXHIBIT A TO THE WARRANT
EXERCISE FORM
CYTOGEN CORPORATION
The undersigned hereby irrevocably exercises the right to
purchase __________________ shares of Common Stock of Cytogen
Corporation, a Delaware corporation, evidenced by the attached
Warrant, and herewith makes payment of the Exercise Price with
respect to such shares in full in the form of [cash or certified
check in the amount of $___________], [______] Warrant Shares,
which represent the amount of Warrant Shares as provided in the
attached Warrant to be canceled in connection with such exercise],
all in accordance with the conditions and provisions of said
Warrant.
The undersigned requests that stock certificates for such
Warrant Shares be issued, and a Warrant representing any
unexercised portion hereof be issued, pursuant to this Warrant in
the name of the registered Holder and delivered to the undersigned
at the address set forth below.
Dated:_______________________________________
_____________________________________________
Signature of Registered Holder
Name of Registered Holder (Print)
_____________________________________________
Address
NOTICE
The signature to the foregoing Exercise Form must correspond
to the name as written upon the face of the attached Warrant in
every particular, without alteration or enlargement or any change
whatsoever.
A-ii
EXHIBIT B TO THE WARRANT
ASSIGNMENT
(To be executed by the registered Warrant Holder desiring to
transfer the Warrant)
FOR VALUED RECEIVED, the undersigned Warrant Holder of the
attached Warrant hereby sells, assigns and transfers unto the
persons below named the right to purchase ______________ shares of
the Common Stock of Cytogen Corporation evidenced by the attached
Warrant and does hereby irrevocably constitute and appoint
______________________ attorney to transfer the said Warrant on the
books of the Company, with full power of substitution in the
premises.
Dated:
______________________________
Signature
Fill in for new Registration of Warrant:
_________________________________________
Name
_________________________________________
Address
_________________________________________
Please print name and address of assignee
(including zip code number)
NOTICE
The signature to the foregoing Assignment must correspond to
the name as written upon the face of the attached Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
B-iii
EXHIBIT D
[RESERVED]
EXHIBIT E
FORM OF OPINION OF THE COMPANY'S INDEPENDENT COUNSEL
[Date]
Kingsbridge Capital Limited
Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxx Xxxxxxx
Xxxxxxxx xx Xxxxxxx
Re: Private Equity Line Agreement Between Kingsbridge Capital
Limited and CYTOGEN Corporation
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section [6.12]
[7.2(g)] of the Private Equity Line Agreement by and between
Kingsbridge Capital Limited, a British Virgin Islands entity (the
"Investor") and Cytogen Corporation, a Delaware corporation (the
"Company"), dated as of October 23, 1998 (the "Equity Line
Agreement"), which provides for the issuance and sale by the
Company of up to an indeterminate number of shares of Common
Stock of the Company (the "Put Shares"), certain additional
shares upon the occurrence of certain events as set forth in
Section 2.6 thereof (the "Blackout Shares"), and a warrant
to purchase 200,000 shares of Common Stock of the Company (the
"Warrant", and the shares of Common Stock issued or issuable
pursuant to exercise of the Warrant, the "Warrant Shares").
All terms used herein have the meanings defined for them in
the Equity Line Agreement unless otherwise defined herein.
I have acted as counsel for the Company in connection with
the negotiation of the Equity Line Agreement, the Warrant, the
Registration Rights Agreement between the Investor and the Company,
dated as of October 23, 1998 (the "Registration Rights Agreement"),
and the Escrow Agreement between the Investor, the Company and myself,
as Escrow Agent, dated as of October 23, 1998 (the "Escrow
Agreement", and together with the Equity Line Agreement and the
Registration Rights Agreement, the "Agreements"). As counsel, I
have made such legal and factual examinations and inquires as I
have deemed advisable or necessary for the purpose of rendering
this opinion. In addition, I have examined, among other things,
originals or copies of such corporate records of the Company,
certificates of public officials and such other documents and
questions of law that I consider necessary or advisable for the
purpose of rendering this opinion. In such examination I have
assumed the genuineness of all signatures on original documents,
the authenticity and completeness of all documents submitted to me
as originals, the conformity to original documents of all copies
submitted to me as copies thereof, the legal capacity of natural
persons, and the due execution and delivery of all documents
(except as to due execution and delivery by the Company) where due
execution and delivery are a prerequisite to the effectiveness
thereof. With respect to certain factual matters, I have relied,
without independent investigation on the facts stated in the
representations and warranties contained in the Equity Line Agreement
and the schedules thereto and the SEC documents (other than in each case
conclusion of law).
Page ii
As used in this opinion, the expression "to my knowledge"
refers to my current actual knowledge.
For purposes of this opinion, I have assumed that you have
all requisite power and authority, and have taken any and all
necessary corporate action, to execute and deliver the Agreements,
and I am assuming that the representations and warranties made by
the Investor in the Agreements and pursuant thereto are true and
correct.
Based upon and subject to the foregoing, I am of the opinion
that:
1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and has all requisite power and authority (corporate and
other) to carry on its business and to own, lease and operate its
properties and assets as described in the Company's SEC Documents.
To our knowledge, the Company does not own more than fifty percent
(50%) of the outstanding capital stock of or control any other
business entity, except for subsidiaries of the Company, namely, AxCell
BioSciences, Inc., Cellcor, Inc., and CytoRad, Inc. The Company
is duly qualified as a foreign corporation to do business and is
in good standing in every jurisdiction in which the Company owns or
leases property, other than those in which the failure so to qualify
would not have a Material Adverse Effect.
2. The Company has the requisite corporate power and
authority to enter into and perform its obligations under the
Agreements and the Warrant and to issue the Put Shares, the
Warrant, the Warrant Shares and the Blackout Shares. The execution
and delivery of the Agreements, and the execution, issuance and
delivery of the Warrant, by the Company and the consummation by it
of the transactions contemplated thereby 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. Each of the Agreements has been duly
executed and delivered, and the Warrant has been duly executed,
issued and delivered, by the Company and each of the Agreements and
the Warrant constitutes valid and binding obligations of the
Company enforceable against the Company in accordance with their
respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and
remedies or by other equitable principles of general application.
3. The execution, delivery and performance of the Agreements
and the Warrant by the Company and the consummation by the Company
of the transactions contemplated thereby, including without
Page iii
limitation the issuance of the Put Shares, the Warrant, the Warrant
Shares and the Blackout Shares, do not and will not (i) result in
a violation of the Company's Articles or By-Laws; (ii) to my
knowledge, conflict with, or constitute a material default (or an
event that 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 material agreement,
indenture, instrument or any "lock-up" or similar provision of any
underwriting or similar agreement to which the Company is a party,
except for such conflicts, defaults, terminations, amendments,
accelerations and cancellations as would not, individually or in
the aggregate, have a Material Adverse Effect; or (iii) result in
a violation of any federal or state law, rule or regulation
applicable to the Company or by which any property or asset of the
Company is bound or affected, except for such violations as would
not, individually or in the aggregate, have a Material Adverse
Effect. To my knowledge, the Company is not in violation of any
terms of its Articles or Bylaws.
4. The issuance of the Put Shares, the Warrant and the
Blackout Shares in accordance with the Equity Line Agreement, and
the issuance of the Warrant Shares in accordance with the Warrant,
will be exempt from registration under the Securities Act of 1933
and will be in compliance with applicable state securities laws. When
so issued, the Put Shares, the Blackout Shares and the Warrant
Shares will be duly and validly issued, fully paid and
nonassessable, and free of any liens, encumbrances and preemptive
or similar rights contained in the Company's Articles of
Incorporation (the "Articles") or Bylaws or, to my knowledge, in
any agreement to which the Company is party.
5. To my knowledge, except as disclosed in the SEC
Documents, there are no claims, actions, suits, proceedings or
investigations that are pending against the Company or its
properties, or against any officer or director of the Company in
his or her capacity as such, nor has the Company received any
written threat of any such claims, actions, suits, proceedings, or
investigations which are required to be and have not been disclosed
in the SEC Documents and which are reasonably likely to have a material adverse
affect upon the Company's financial position or results of operations.
Page iv
This opinion is furnished to the Purchaser solely for its
benefit in connection with the transactions described above and may
not be relied upon by any other person or for any other purpose
without my prior written consent.
Very truly yours,
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Xx.
Vice President General Counsel and
Corporate Secretary
Page v
EXHIBIT F
COMPLIANCE CERTIFICATE
CYTOGEN CORPORATION
The undersigned, H. Xxxxxx Xxxxxx, Ph.D., hereby certifies,
with respect to shares of common stock of Cytogen Corporation (the
"Company") issuable in connection with the Put Notice, dated
_____________ (the "Notice"), delivered pursuant to Article II of
the Private Equity Line Agreement, dated as of October 23, 1998, by
and between the Company and Kingsbridge Capital Limited (the
"Agreement"), as follows:
1. The undersigned is the duly elected President and Chief
Executive Officer of the Company.
2. The representations and warranties of the Company set
forth in Article V of the Agreement are true and correct in all
material respects as though made on and as of the date hereof.
3. The Company has performed in all material respects all
covenants and agreements to be performed by the Company on or prior
to the Closing Date related to the Notice and has complied in all
material respects with all obligations and conditions contained in
Article VII of the Agreement.
The undersigned has executed this Certificate this ____ day of
________, 199_.
____________________________________
H. Xxxxxx Xxxxxx, Ph.D.
President and Chief Executive Officer
Page i
EXHIBIT G
INSTRUCTIONS TO TRANSFER AGENT
CYTOGEN CORPORATION
October ___, 1998
[Name, address and phone and facsimile number of Transfer Agent]
Dear Sirs:
Reference is made to the Private Equity Line Agreement (the
"Agreement"), dated as of October 23, 1998 between Kingsbridge
Capital Limited (the "Investor") and Cytogen Corporation(the
"Company"). Pursuant to the Agreement, subject to the terms and
conditions set forth in the Agreement the Investor has agreed to
purchase from the Company and the Company has agreed to sell to the
Investor from time to time during the term of the Agreement shares
of Common Stock of the Company, $.01 par value per share (the
"Common Stock"). As a condition to the effectiveness of the
Agreement, the Company has agreed to issue to you, as the transfer
agent for the Common Stock (the "Transfer Agent"), these
instructions relating to the Common Stock to be issued to the
Investor (or a permitted assignee) pursuant to the Agreement. All
terms used herein and not otherwise defined shall have the meaning
set forth in the Agreement.
1. ISSUANCE OF COMMON STOCK WITHOUT THE LEGEND
Pursuant to the Agreement, the Company is required to prepare
and file with the Commission, and maintain the effectiveness of, a
registration statement or registration statements registering the
resale of the Common Stock to be acquired by the Investor under the
Agreement. The Company will advise the Transfer Agent in writing
of the effectiveness of any such registration statement promptly
upon its being declared effective. The Transfer Agent shall be
entitled to rely on such advice and shall assume that the
effectiveness of such registration statement remains in effect
unless the Transfer Agent is otherwise advised in writing by the
Company and shall not be required to independently confirm the
continued effectiveness of such registration statement. In the
circumstances set forth in the following two paragraphs, the
Transfer Agent shall deliver to the Investor certificates
representing Common Stock not bearing the Legend without requiring
further advice or instruction or additional documentation from the
Company or its counsel or the Investor or its counsel or any other
party (other than as described in such paragraphs).
At any time after the effective date of the applicable
registration statement (provided that the Company has not informed
the Transfer Agent in writing that such registration statement is
not effective) upon any surrender of one or more certificates
evidencing Common Stock which bear the Legend, to the extent
accompanied by a notice requesting the issuance of new certificates
free of the Legend to replace those surrendered, the Transfer Agent
shall deliver to the Investor the certificates representing the
Common Stock not bearing the Legend, in such names and
denominations as the Investor shall request, provided that:
(15) in connection with such event, if so requested by the
Transfer Agent, the Investor (or its permitted assignee) shall
confirm in writing to the Transfer Agent that the Investor has
complied with the prospectus delivery requirement under the
Securities Act;
(16) if so requested by the Transfer Agent, the Investor (or
its permitted assignee) shall represent that it is permitted
to dispose thereof with limitation as to amount of manner of
sale pursuant to Rule 144(k) under the Securities Act; or
(17) the Investor, its permitted assignee, or either of their
brokers confirms to the transfer agent that (i) the Investor
has held the shares of Common Stock for at least one year,
(ii) counting the shares surrendered as being sold upon the
date the unlegended Certificates would be delivered to the
Investor (or the Trading Day immediately following if such
date is not a Trading Day), the Investor will not have sold
more than the greater of (a) ____ percent (___%) of the total
number of outstanding shares of Common Stock or (b) the
average weekly trading volume of the Common Stock for the
preceding four weeks during the three months ending upon such
delivery date (or the Trading Day immediately following if
such date is not a Trading Day), and (iii) the Investor has
complied with the manner of sale and notice requirements of
Rule 144 under the Securities Act.
Any advice, notice or instructions to the Transfer Agent
required or permitted to be given hereunder may be transmitted via
facsimile to the Transfer Agent's facsimile number of (___)-___-____.
2. MECHANICS OF DELIVERY OF CERTIFICATES
REPRESENTING COMMON STOCK
In connection with any Closing pursuant to which the Investor
acquires Common Stock under the Agreement, the Transfer Agent shall
deliver certificates representing Common Stock (with or without the
Page iii
Legend, as appropriate) as promptly as practicable, but in no event
later than three business days, after such Closing.
3. FEES OF TRANSFER AGENT; INDEMNIFICATION
The Company agrees to pay the Transfer Agent for all fees
incurred in connection with these Irrevocable Instructions. The
Company agrees to indemnify the Transfer Agent and its officers,
employees and agents, against any losses, claims, damages or
liabilities, joint or several, to which it or they become subject
based upon the performance by the Transfer Agent of its duties in
accordance with the Irrevocable Instructions.
4. THIRD PARTY BENEFICIARY
The Company and the Transfer Agent acknowledge and agree that
the Investor is an express third party beneficiary of these
Irrevocable Instructions and shall be entitled to rely upon, and
enforce, the provisions hereof.
CYTOGEN CORPORATION
By:____________________________________
Name
Title
AGREED:
[NAME OF TRANSFER AGENT]
By:__________________________
Name:
Title:
