SETTLEMENT AND EXCHANGE SUPPORT AGREEMENT
SETTLEMENT
AND EXCHANGE SUPPORT AGREEMENT, dated as of May 10, 2009, by and between Cell
Genesys, Inc., a Delaware corporation (the “Company”), and Tang Capital Partners,
LP, a Delaware limited partnership (together with its Affiliates (as defined
herein) and their respective successors and assigns, “Noteholder”).
WHEREAS,
the Company has issued and outstanding $68,307,000 aggregate principal amount of
its 3.125% Convertible Senior Notes due November 1, 2011 (the “Existing
Notes”) issued
under that certain Indenture, dated as of October 20, 2004 by and between the
Company and U.S. Bank, National Association, as Trustee (the “Existing Notes
Indenture”);
WHEREAS,
Noteholder Beneficially Owns (as defined herein) $46.2 million aggregate
principal amount, or 67.6%, of the Existing Notes;
WHEREAS,
Noteholder has filed the Action (as defined herein); and
WHEREAS,
the Company and Noteholder have engaged in good faith negotiations with the
objective of settling the Action and commencing the Exchange Offer, pursuant to
which the Company will offer to exchange for each $1,000 of aggregate principal
amount outstanding of its Existing Notes (i) a cash payment of $500.00,
(ii) 205.8824 shares of the Company’s common stock, par value $0.001 per share
(the “Common
Stock”), and (iii) $310.00
principal amount of 3.125% Convertible Senior Notes due May 1, 2013 (the “New
Notes”), which are to be convertible into shares of Common Stock at a
conversion price equal to $0.68 per share, or for 1,470.5882 shares of Common
Stock per $1,000 principal amount of the New Notes and to be issued pursuant to
an indenture to be entered into by and between the Company and a trustee (the
“New Notes
Indenture”);
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Noteholder and the Company hereby
agree as follows:
1. Definitions. The following
terms shall have the following meanings:
“Action” means the lawsuit
filed on May 5, 2009 in Delaware Chancery Court captioned Tang Capital Partners, LP v. Cell
Genesys, Inc., et al., Case No. 4566.
“Affiliate” means, with
respect to any Person, any other Person that directly or indirectly through one
or more intermediaries, controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, “control” of a Person means
the power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through holding beneficial
ownership interests in such other Person, by contract or otherwise.
“Agreement” means this
Settlement and Exchange Support Agreement.
“Beneficially Own,” “Beneficially Owned,” or
“Beneficial Ownership”
shall have the meaning set forth in Rule 13d-3 of the rules and regulations
promulgated under the Exchange Act.
“Business Day” means any day
that is not a Saturday, a Sunday or a day on which banks in the State of New
York are generally closed for business.
“Commission” means the U.S.
Securities and Exchange Commission, or any other federal agency at the time
administering the Securities Act or the Exchange Act.
“Company Parties” means the
Company and its directors and executive officers, including all individuals
named as defendants in the Action.
“Exchange Act” means
the Securities Exchange Act of 1934, and any successor to such statute, and the
rules and regulations of the Commission issued under such Act, as they each may,
from time to time, be amended and in effect.
“Exchange Documents” means
this Agreement and any other documents to be executed and delivered in
connection with the consummation of the Exchange Offer.
“Exchange Offer” means that
certain exchange offer of Existing Notes for the Exchange Consideration to be
commenced pursuant to the terms set forth in this Agreement under cover of
Schedule TO.
“Person” means any
individual, partnership, corporation, limited liability company, association,
trust, joint venture, unincorporated organization, governmental unit or other
entity.
“Released Claims” means any
and all claims, actions, causes of action, liabilities, losses, obligations,
judgments, duties, costs, expenses, equitable, legal, and administrative relief,
demands or rights, suits, matters, and issues of every kind and nature
whatsoever, including, without limitation, claims for rescission, restitution,
injunctive relief, or damages of any kind, whether based on or arising under
federal, state or local law, statute, ordinance, regulation, contract, common
law, or any other source, that have been, might have been, could have been, or
might hereafter be asserted, whether known or unknown (including without
limitation unknown claims), through the Settlement Effective Date, by or on
behalf of Noteholder individually and/or derivatively and/or the Company, and
each of their heirs, executors, administrators, successors, and assigns against
the Released Parties or any of them in the Action, or in any other court action
or before any administrative or regulatory body, commission, tribunal,
arbitration panel, or other adjudicatory body, arising out of or related,
directly or indirectly, in any way to the allegations in the Action or any
facts, occurrences, disclosures, statements, acts or omissions, failures to act
or disclose by the Company Parties, breach of fiduciary or other duties, abuse
of control, unjust enrichment, self-dealing, misappropriation of information, or
any stock transactions consummated by Company Parties, provided that in the case
of Released Parties other than the Company, the Released Claims shall not
include any matter involving such Released Party serving in the capacity as a
director, officer, agent, attorney, representative, accountant, auditor,
advisor, insurer, co-insurer or re-insurers to any entity other than the Company
or any of its subsidiaries.
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“Released Parties” means the
Company Parties and each of their respective agents, attorneys, personal or
legal representatives, accountants, auditors, advisors, predecessors,
successors, spouses, partners, parents, heirs, assigns, executors, personal
representatives, immediate family members, insurers, co-insurers and
re-insurers, entities in which a Company Party has a controlling interest, or
trusts of which a Company Party is the settler or which is for the benefit of
any Company Party’s family.
“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
“Shares” shall mean shares of
Common Stock issued in the Exchange Offer or upon conversion of the New
Notes.
“Transfer” means to, directly
or indirectly, (i) sell, assign or transfer, (ii) pledge, encumber,
create any participation or grant any proxy or option, in each case such as
would prevent, preclude, hinder or delay the ability of the Person engaging in
such Transfer from fulfilling any of such Person’s obligations under this
Agreement, including, without limitation, Section 3
hereof, or (iii) enter into any agreement, commitment or other arrangement
to do any of the foregoing.
“Transaction Documents” means
the Exchange Documents and the New Notes Indenture.
2. Agreements
of the Company.
(a) Subject
to the terms and conditions of this Agreement, the Company agrees as
follows:
(i) Commencement
of the Exchange Offer. The Company
shall commence the Exchange Offer promptly after the date hereof (and in any
event by May 22, 2009), pursuant to which the Company will offer to exchange for
each $1,000 in principal amount of Existing Notes (1) $500.00 in cash, (▇)
▇▇▇.▇▇▇▇ Shares and (3) $310.00 principal amount of New Notes (the
consideration referenced in clauses (1), (2) and (3), the “Exchange
Consideration”),
which Shares and New Notes will be issued in a transaction exempt from
registration pursuant to Section 3(a)(9) of the Securities Act, and
assuming that all Existing Notes are tendered in the Exchange Offer, will result
in an aggregate cash payment by the Company of approximately $34,153,500, the
issuance of 14,063,205.88 Shares and the issuance of $21,175,170 aggregate
principal amount of New Notes, convertible into an aggregate of 31,139,955.88
Shares. Accrued and unpaid interest on the Existing Notes shall be
separately paid through the date on which the Exchange Offer is
consummated. Noteholder agrees to promptly provide any information
reasonably required by the Company from Noteholder to be included in the
Exchange Documents. The terms of the Exchange Offer and the Exchange
Documents will be consistent with the terms hereof and otherwise on terms
satisfactory to the Noteholder. The Company will consummate the Exchange Offer
as soon as practicable.
(ii) Expiration
of the Exchange Offer: The Exchange
Offer shall expire on the date which is twenty (20) Business Days from the
date of commencement of the Exchange Offer, unless extended by the Company (with
the reasonable consent of the Noteholder); provided, however, Noteholder consent
shall not be required if the purpose of the extension is to satisfy a condition
including the Minimum Tender Condition.
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(iii) Exchange
Offer Minimum Tender Condition: The Company may
not consummate the Exchange Offer unless holders of at least eighty-seven and
1/2 percent (87.5%) of the aggregate principal amount of the Existing Notes then
outstanding shall have validly tendered and not withdrawn their Existing Notes
in the Exchange Offer (the “Minimum Tender
Condition”), provided that, subject to Section 4, such condition may
be modified by the Company with the written consent of Noteholder.
(iv) New
Notes Indenture. Immediately
prior to the consummation of the Exchange Offer, the Company will enter into the
New Notes Indenture, which shall be substantially identical to the Existing
Notes Indenture (and otherwise on terms reasonably acceptable to the Noteholder
and the Company), except that the final maturity of the New Notes shall be
May 1, 2013, the conversion price shall be $0.68 per Share which shall be
convertible into 1,470.5882 Shares per $1,000 principal amount of the New Notes
and interest on the New Notes shall begin to accrue commencing on the date
following the consummation of the Exchange Offer.
(b) Notwithstanding
anything to the contrary in this Agreement, to the extent in the Exchange Offer
the Company pays any consideration to any tendering holder of Existing Notes in
exchange for the Exchange Consideration in addition to the Exchange
Consideration, Noteholder shall receive such additional consideration in amount
proportional to the principal amount of Existing Notes tendered by
Noteholder.
(c) In
the event of a stock split, stock dividend or distribution, or any change in the
Common Stock by reason of a stock split, reverse stock split, recapitalization,
combination, reclassification, readjustment, exchange of shares or the like, the
term “Exchange
Consideration” shall
be deemed to refer to and include such shares as well as all such stock
dividends and distributions and any securities into which or for which any or
all of such shares may be changed or exchanged.
3. Agreements
of Noteholder. Subject to the
terms and conditions of this Agreement:
(a) Noteholder
agrees with the Company, in connection with the consummation of the Exchange
Offer and when solicited in accordance with applicable securities law,
to:
(i) tender
(or cause to be tendered) its Existing Notes in exchange for the amount of
Exchange Consideration applicable to such Existing Notes prior to the scheduled
expiration date of the offer (without giving effect to any extension thereof),
in accordance with the terms thereof; and
(ii) not
withdraw (or cause not to be withdrawn) any of the foregoing unless and until
this Agreement is terminated in accordance with its terms, or the Minimum Tender
Condition has not been met and the Exchange Offer has been
terminated.
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(b) Noteholder
agrees, so long as this Agreement remains in effect, not to Transfer any of its
Existing Notes, in whole or in part, unless the transferee of such Existing
Notes agrees with Noteholder and the Company in writing to be bound by this
Agreement; provided, however, if the transferee holds less than 5% of the
Existing Notes, then the covenants set forth in Section 3(c) through
(h) shall not
apply to such transferee.
(c) At
every meeting of stockholders of the Company, and at every adjournment thereof,
and in every action or approval by written consent of stockholders of the
Company in lieu of such a meeting, in each case prior to the second anniversary
of the date of this Agreement, Noteholder shall be present and vote or cause to
be present and voted any Shares then Beneficially Owned by Noteholder and its
Affiliates which are entitled to vote, including Shares acquired after the date
of this Agreement (whether pursuant to the Exchange Offer as a result of
conversion of the New Notes or otherwise), in the same proportion (for, against,
withheld, and/or abstain without giving effect to any broker non-votes) as the
votes that are collectively cast by all of the other stockholders of the
Company, who are present and voting with respect to such matter, and shall
similarly execute and deliver written consents and otherwise exercise all voting
and other rights of stockholders with respect to the
Shares. Noteholder agrees to execute and deliver to Company a proxy
in a customary form to be agreed to by Company and Noteholder (the “Proxy”),
which shall be irrevocable, with the total number of shares owned by Noteholder
set forth therein. The parties agree that by reason of this Agreement
the Proxy is a proxy coupled with an interest. Notwithstanding the
foregoing, at the option of the Noteholder, the Noteholder may vote or direct
the vote or proxy in accordance with the recommendation of the Board of
Directors of the Company.
(d) So
long as this Agreement remains in effect and until the second anniversary of the
date of this Agreement, and except as provided in the preceding paragraph,
Noteholder will not enter into any voting agreement with any person or entity
with respect to any of its Shares, grant any person or entity any proxy
(revocable or irrevocable) or power of attorney with respect to any of its
Shares, deposit any of its Shares in a voting trust or otherwise enter into any
agreement or arrangement with any person or entity limiting or affecting
Noteholder’s legal power, authority or right to vote its Shares or to agree to
amendments to the terms of the Exchange Offer or this Agreement.
(e) Noteholder
agrees that it will permit public disclosure, including in a press release and
in the documents filed with the Commission for the Exchange Offer, of this
Agreement, provided that Noteholder shall be given reasonable advance
opportunity to review and comment on any such disclosures.
(f) Noteholder
further agrees, until the earlier of the consummation of the Exchange Offer or
the termination of this Agreement, that it will not:
(i) object
to, or otherwise commence or support any proceeding or action to oppose, the
Exchange Offer or the other actions of the Company contemplated by this
Agreement and shall not take any action or otherwise commence or support any
action or proceeding that would constitute a breach of any of its
representations, warranties and agreements set forth herein or would
unreasonably delay the consummation of the Exchange Offer including, but not
limited to: (A) the filing of an involuntary petition against the Company
under the Bankruptcy Code; (B) taking any action in connection with any
default or Event of Default under and as defined in the Indenture; or (C)
take any action seeking to have the Company declared insolvent, or
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(ii) directly
or indirectly seek, solicit, support, or encourage any plan, sale, proposal, or
offer of winding up, liquidation, reorganization, merger, amalgamation,
consolidation, dissolution or restructuring of the Company.
(g) In
addition, for so long as this Agreement has not been terminated, Noteholder
shall refrain from directly or indirectly taking any action, or cooperate with
any other party that takes any action or permit any of its Affiliates,
representatives attorneys, or agents from taking any action, that would
materially impede, interfere with, delay, postpone, discourage or adversely
affect the consummation of the Exchange Offer.
(h) For
a period (“Restricted
Period”) commencing with the date of this Agreement and ending on the
second anniversary of the date of this Agreement, Noteholder agrees that,
without the prior written consent of the board of directors of the
Company:
(i) except
as a result of the acquisition of additional Existing Notes, pursuant to the
Exchange Offer or pursuant to the conversion of the New Notes, Noteholder will
not acquire, offer to acquire, or agree to acquire, directly or indirectly, by
purchase or otherwise, any voting securities or direct or indirect rights to
acquire any voting securities of the Company or any subsidiary thereof, or of
any successor to the Company or Person obligated to issue Shares upon conversion
of the New Notes, or any assets of the other party or any subsidiary or division
thereof or of any such successor or Person obligated to issue Shares upon
conversion of the New Notes; provided, however, in the absence of a public
solicitation, the restriction in this Section 3(h)(i) shall not apply if as a
result of such acquisition Noteholder would not Beneficially Own more than
9.999% of the then outstanding Common Stock.
(ii) make,
or in any way participate, directly or indirectly, in any “solicitation” of
“proxies” to vote (as such terms are used in the rules of the Commission), or
seek to advise or influence any person or entity with respect to the voting of
any voting securities of the Company;
(iii) make
any public announcement with respect to, or submit a proposal for, or offer of
(with or without conditions) any extraordinary transaction involving the Company
or any of its securities or assets;
(iv) form,
join or in any way participate in a “group” as defined in Section 13(d)(3) of
the Exchange Act, in connection with any of the foregoing;
(v) otherwise
act or seek to control or influence the management, Board of Directors or
policies of the Company;
(vi) take
any action that could reasonably be expected to require the Company to make a
public announcement regarding the possibility of any of the events described in
clauses (i) through (v) above; or
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(vii) request
the Company, the Board of Directors of the Company or any committee thereof
directly or indirectly, to amend or waive any provision of this Section
3(h)
For the
avoidance of doubt, the parties acknowledge that the Noteholder is free to
acquire or dispose of securities of the Company and any related derivative
instruments, subject to Section 3 (b), Section 3(h)(i), Section 8 and as elsewhere
provided in this Agreement.
4. Amendments
to the Exchange Offer.
The
Company shall not:
(a) amend,
modify, alter or waive any of the material terms and conditions of the Exchange
Offer in a manner adverse to Noteholder or otherwise reduce the amount of cash
or Common Stock or New Notes to be paid in the Exchange Offer per $1,000
principal amount of tendered Existing Notes or otherwise take or fail to take
any action that would reasonably be expected to materially impede, interfere
with, delay, postpone, discourage or adversely affect the timely consummation of
the Exchange Offer; provided, however, the Company may extend the Exchange Offer
if any condition to the Exchange Offer may not be met on the expiration date,
subject to Noteholder’s right to terminate this Agreement pursuant to Section
5(a)(ii); or
(b) modify
the Minimum Tender Condition, without the prior written consent of
Noteholder.
5. Termination of
Agreement.
(a) Notwithstanding
anything to the contrary set forth in this Agreement, unless the Exchange Offer
has been consummated as provided in this Agreement, this Agreement and all of
the obligations and undertakings of the parties set forth in this Agreement
shall terminate and expire upon the earliest to occur of:
(i) mutual
written consent of the Company and Noteholder;
(ii) without
any action by the Company or any Noteholder, if the Exchange Offer is not
consummated on or before 60 days after the commencement of the Exchange Offer,
provided that no party may terminate this Agreement under this clause if the
failure to consummate the Exchange Offer is the result of the material breach of
this Agreement by such party;
(iii) by
action of the Noteholder, if the Exchange Offer is not commenced on or before
May 22, 2009;
(iv) without
any action by either the Company or Noteholder, if the Exchange Offer shall
expire (after giving effect to any extension) or be terminated without the
exchange of the requisite Existing Notes;
(v) the
Company receives written notification from Nasdaq that the Company is not in
compliance with a Nasdaq Marketplace rule that could reasonably result in
delisting (for a basis other than failure to meet the minimum bid price per
share requirements), and the cause of such deficiency cannot be reasonably cured
by the Company prior to the effective date of any resulting delisting; or
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(vi) The
announcement by the Company of the entry into a definitive agreement for or
consummation of (i) a merger, acquisition, or similar transaction requiring
approval by the stockholders of the Company, or (ii) the expenditure of more
than $5 million in cash in connection with the acquisition of assets of a third
party.
(b) Notwithstanding
the foregoing or any other provision of this Agreement, neither the termination
of this Agreement nor any other circumstance shall relieve a party from
liability for the willful breach of its obligations hereunder.
(c) The
provisions of this Section 5(c), Sections 12, 16, 17, 18, 19, 20, and
25, and any applicable definition of the capitalized terms used in any of the
foregoing sections shall survive any termination of this Agreement.
6. Representations,
Warranties and Covenants.
(a) The
Company represents and warrants to Noteholder, and Noteholder represents and
warrants to the Company as follows:
(i) if
an entity, it is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and has all requisite corporate,
partnership or other power and authority to enter into each Transaction Document
to which it is a party and to carry out the transactions contemplated by, and
perform its respective obligations under, each Transaction Document to which it
is a party;
(ii) the
execution, delivery and performance by it of each Transaction Document to which
it is a party does not and shall not (A) violate any provision of law,
order, rule or regulation applicable to it or any of its affiliates or its
certificate of incorporation or bylaws or other organizational documents or
those of any of its subsidiaries or (B) conflict with, result in the breach
of or constitute (with due notice or lapse of time or both) a default under any
material contractual obligations to which it or any of its affiliates is a party
or under its certificate of incorporation, bylaws or other governing
instruments;
(iii) the
execution, delivery and performance by it of each Transaction Document to which
it is a party does not and shall not require any registration or filing with,
the consent or approval of, notice to, or any other action with respect to, any
Federal, state or other governmental authority or regulatory body, except for
(A) such consents, approvals, authorizations, registrations or
qualifications as may be required under the state securities or Blue Sky laws in
connection with the issuance of the Exchange Shares, (B) the filing with
the Commission of a Tender Offer Statement on Schedule TO with respect to
the Exchange Offer, including the exhibits thereto, and (C) such other
filings as may be necessary or required by the Commission;
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(iv) each
Transaction Document to which it is a party has been duly authorized, executed
and delivered and, assuming the due execution and delivery of such Transaction
Document by each of the other parties thereto, each such Transaction Document is
the legally valid and binding obligation of it, enforceable against it in
accordance with its terms, except as enforceability may be limited or affected
by applicable bankruptcy, insolvency, moratorium, reorganization or other laws
of general application relating to or affecting creditors’ rights
generally; and
(v) it
has been represented by counsel in connection with the Transaction Documents and
the transactions contemplated by the Transaction Documents.
(b) Noteholder
further represents and warrants to the Company that:
(i) as
of the date of this Agreement, Noteholder (together with its Affiliates) is the
Beneficial Owner of $46.2 million aggregate principal amount of Existing Notes,
which represents all of the Existing Notes held by Noteholder and its
Affiliates, with the requisite power and authority to vote and dispose of such
Existing Notes, and such Existing Notes are owned free and clear of any liens,
encumbrances, equities or claims, other than (x) those under securities laws or
any ordinary course claims, and (y) pledges in connection with bona fide margin
accounts or other loan or financing agreements secured by such Existing
Notes;
(ii) as
of the date of this Agreement and through the date of acquisition of its
Existing Notes pursuant to the Exchange Offer, Noteholder has full legal power,
authority and right to exchange its Existing Notes then held of record or
Beneficially Owned by it without the consent, approval of, or any other action
on the part of, any other person or entity; and (other than this Agreement)
Noteholder has not entered into any voting agreement with any person or entity
with respect to any of its Existing Notes, granted to any person or entity any
of its Existing Notes, deposited any of its Existing Notes in a voting trust or
entered into any arrangement or agreement with any person or entity limiting or
affecting its legal power, authority or right to vote such Existing Notes on any
matter; and
(iii) Noteholder
has reviewed the Company’s reports filed with the Commission, including its
report on Form 8-K filed with the Commission on April 30, 2009, and has
reviewed, or has had the opportunity to review, with the assistance of
professional and legal advisors of its choosing, sufficient information
necessary for Noteholder to decide to exchange its Existing Notes pursuant to
the Exchange Offer. Noteholder acknowledges that the Company may be
in possession of material, nonpublic information regarding the Company, its
financial condition, results of operations, businesses, properties, assets,
liabilities, management, projections, appraisals, plans, prospects and other
information relating to the Company, including potential proposals for
recapitalizations, reorganizations, mergers, acquisitions, liquidation or other
offers respecting securities of, for or by the Company (collectively, the “Information”),
and that such information may be material to a decision to sell or purchase
securities of the Company. Noteholder acknowledges and agrees that
the Company has no obligation to disclose any Information to
Noteholder. Noteholder has determined to enter into this Agreement
based on such investigation, notwithstanding its lack of knowledge of the
Information, and not in reliance on any representation or investigation made by,
or Information known by, the Company.
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(c) The
Company further represents, warrants, covenants and agrees to and with
Noteholder as follows:
(i) as
of the date of this Agreement, the Company had 87,809,651 shares of Common Stock
outstanding and no shares of preferred stock outstanding (except as may be
increased as a result of (A) exercises of outstanding options, warrants and
other rights after the date set forth in the Company’s Annual Report on Form
10-K filed with the Commission on March 13, 2009 (the “Annual
Report”); and
(B) grants of options, warrants and other rights after the date set forth
in the Annual Report);
(ii) that
the Shares are duly authorized and, upon issuance will be duly and validly
issued and free from all taxes, liens and charges with respect to the issue
thereof and the Shares shall be fully paid and nonassessable;
(iii) that
the Company will reserve from its duly authorized capital stock the maximum
number of Shares issuable in the Exchange Offer and upon conversion of the New
Notes;
(iv) the
Company shall comply with all applicable law in connection with the Exchange
Offer;
(v) the
Company shall cause all shares of Common Stock issued in the Exchange Offer to
be listed on each securities exchange or other securities market, if any, on
which the Common Stock is then listed;
(vi) all
New Notes and Shares will be freely tradable immediately upon the consummation
of the Exchange Offer; and
(vii)
the Annual Report and all reports filed with the Commission
subsequent to the date of filing the Annual Report and prior to the date hereof
complied with the requirements of the Exchange Act in all material respects as
of the date of such filing.
7. Disclosure
of Transactions. On or before
9:30 a.m., New York City time on the first (1st)
Business Day following the date of this Agreement, the Company shall issue a
press release announcing this Agreement, and on the first (1st)
Business Day following the date of this Agreement, file a Current Report on
Form 8-K describing the terms of the transactions contemplated by this
Agreement in the form required by the Exchange Act and attaching this Agreement
as an exhibit to such filing. The press release shall be in a form reasonably
acceptable to the Noteholder.
8. Conversion
Limitation. Noteholder will not be permitted to exercise the
right to convert the New Notes if and to the extent, following such exercise,
Noteholder, together with Noteholder’s Affiliates, would Beneficially Own more
than 9.999% of the then outstanding Common Stock; provided, however, that such
exercise restriction shall not apply in connection with and subject to
completion of a bona
fide third party tender offer for the Common Stock issuable
thereupon. Upon the written request of the Holder, the Company shall
within five (5) Business Days confirm in writing to the Holder the number of
shares of Common Stock then outstanding. The Company shall not be
required to take any action under this Agreement if it would require approval by
Company stockholders under the Nasdaq Marketplace Rules.
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9. Settlement.
(a) Within
five (5) Business Days of the consummation of the Exchange Offer, Tang Capital
Partners, LP agrees to file a motion, stipulation, notice or other such
appropriate document, and if necessary the Company shall cooperate with respect
thereto, to dismiss the Action, which dismissal shall be with prejudice as
against Tang Capital Partners, LP and if permissible, its
Affiliates.
(b) Company
Parties have denied, and continue to deny, any wrongdoing, including, but not
limited to, any violation of federal or state laws, and Company Parties are
entering into this Agreement in part because it would eliminate the burden and
expense of further litigation. The provisions contained in this
Agreement shall not be deemed or offered in evidence as a presumption, a
concession, or an admission of any fault, liability, or
wrongdoing. Except as required to enforce this Agreement, the parties
shall not offer or attempt to offer the provisions of this Agreement into
evidence or use them in any manner in this or any other actions or proceedings,
whether civil, criminal, or administrative, and the parties intend that the
provisions of this Agreement shall not be offered or received as evidence or
used by any other persons in any such actions or proceedings.
10. Release,
Waiver, and Covenant Not to ▇▇▇.
(a) Noteholder
agrees to the following release and waiver, which shall take effect as of the
date of consummation of the Exchange Offer (the “Settlement
Effective Date”):
(i) Noteholder
hereby releases and discharges each and every Released Claim, and shall not now
or hereinafter institute, participate in, or maintain a proceeding involving a
Released Claim, against the Released Parties, either directly or indirectly,
derivatively, on their own behalf, or on behalf of any other person or
entity;
(ii) By
expressly releasing and forever discharging all Released Claims against the
Released Parties, Noteholder expressly waives any and all provisions, rights,
and benefits conferred by § 1542 of the California Civil Code which
provides:
A general
release does not extend to claims which the creditor does not know or suspect
exist in his favor at the time of executing the release, which if known by him
must have materially affected his settlement with the debtor.
For the
purpose of implementing a full and complete release of the Released Claims,
Noteholder also expressly waives all similar federal, state or foreign laws,
rights, rules, or legal principals which may be applicable
herein. Notwithstanding the provisions of Section 1542 and all
similar federal, state or foreign laws, rights, rules, or legal principles which
may be applicable herein, Noteholder understands and agrees that this Release is
intended to include all Released Claims, if any, which Noteholder may have
whether or not Noteholder knows or suspects those claims exist in their favor,
and that this Release extinguishes all such claims. Noteholder may
hereafter discover facts in addition to or different from those which it and/or
the Company knows or believes to be true with respect to the subject matter of
the Released Claims. Noteholder expressly shall have, fully, finally,
and forever settled and released any and all Released Claims, known or unknown,
suspected or unsuspected, disclosed or undisclosed, contingent or
non-contingent, liquidated or unliquidated, matured or unmatured, accrued or
unaccrued, apparent or unapparent, whether or not concealed or hidden, which now
exist, or heretofore have existed, or arise hereafter upon any theory of law or
equity now existing or coming into existence in the future, without regard to
the subsequent discovery or existence of such different or additional
facts. Noteholder acknowledges that the waiver of unknown claims set
forth herein was separately bargained for and a key element of this Agreement of
which this Release is a part.
11
(iii) Nothing
in this Release shall preclude: (a) any action to enforce the terms
of this Agreement; or (b) any motion to enforce the terms of this
Agreement.
(b) Upon
the Settlement Effective Date, the Company Parties and the Company shall be
deemed to have released, acquitted, and forever discharged Noteholder, its
Affiliates and each of their respective partners, members, managers, directors,
officers, employees, agents, attorneys, personal or legal representatives,
accountants, auditors, advisors, predecessors, successors, spouses, partners,
parents, heirs, assigns, executors, personal representatives, immediate family
members, insurers, co-insurers and re-insurers (“Noteholder
Released Parties”) from any and all claims, actions, causes of action,
liabilities, losses, obligations, judgments, duties, costs, expenses, equitable,
legal, and administrative relief, demands or rights, suits, matters, and issues
of every kind and nature whatsoever, including, without limitation, claims for
rescission, restitution, injunctive relief, or damages of any kind, whether
based on or arising under federal, state or local law, statute, ordinance,
regulation, contract, common law, or any other source, that have been, might
have been, could have been, or might hereafter be asserted, whether known or
unknown (including without limitation unknown claims), through the Settlement
Effective Date, against any Noteholder Released Party. In releasing
such claims, the Company Parties also expressly waive any and all provisions,
rights and benefits conferred by California Code of Civil Procedure § 1542 and
all similar federal, state or foreign law rights, rules or legal principles
which may be applicable herein.
11. Good
Faith. Each of the
signatories to this Agreement agrees to cooperate in good faith with each other
to facilitate the performance by the parties of their respective obligations
hereunder and the purposes of this Agreement.
12. Amendments
and Modifications. Except as
otherwise expressly provided in this Agreement, this Agreement shall not be
amended, changed, supplemented, waived or otherwise modified or terminated
except by instrument in writing signed by each of the parties
hereto.
13. Exchange
Documents. The Exchange
Documents shall be in customary form for an exchange offer, and shall include
such terms, conditions and releases as are customary for and exchange offer of
the type contemplated by this Agreement.
14. Further
Assurances. Each of the
signatories to this Agreement hereby further covenants and agrees to execute and
deliver all further documents and agreements and take all further action that
may be reasonably necessary or desirable in order to enforce and effectively
implement the terms and conditions of this Agreement and the Exchange
Offer.
12
15. Complete
Agreement. The Transaction
Documents, including the Schedules, Annexes and Exhibits thereto, constitute the
complete agreement between the signatories to this Agreement with respect to the
subject matter hereof and supersede all prior and contemporaneous negotiations,
agreements and understandings with respect to the subject matter hereof. The
provisions of the Transaction Documents shall be interpreted in a reasonable
manner to effect the intent of the signatories to this Agreement.
16. Notices. All notices,
requests, demands, claims and other communications hereunder shall be in writing
and shall be (a) transmitted by hand delivery, (b) transmitted by
overnight courier, or (c) transmitted by telecopy, and in each case, if to
the Company, at the address set forth below:
Cell
Genesys, Inc.
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: Chief
Financial Officer
with
copies to:
Shearman
and Sterling LLP
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
O’Melveny
& ▇▇▇▇▇ LLP
▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: ▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇
if to
Noteholder, to the address set forth below:
Tang
Capital Management, LLC
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇
▇▇▇▇
13
with a
copy to:
▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇
▇▇▇▇▇▇, Esq.
Notices
mailed or transmitted in accordance with the foregoing shall be deemed to have
been given upon receipt.
17. Governing
Law. This Agreement,
the rights of the parties and all claims, actions, causes of action, suits,
litigation, controversies, hearings, charges, complaints or proceedings arising
in whole or in part under or in connection herewith, will be governed by and
construed in accordance with the domestic substantive laws of the State of New
York, without giving effect to any choice or conflict of law provision or rule
that would cause the application of the laws of any other jurisdiction;
provided, however, that the provisions relating to settlement and release shall
be governed by the laws of the State of Delaware.
18. Jurisdiction;
Waiver of Jury Trial. By its execution
and delivery of this Agreement, each of the signatories to this Agreement
irrevocably and unconditionally agrees that any legal action, suit or proceeding
against it with respect to any matter under or arising out of or in connection
with this Agreement or for recognition or enforcement of any judgment rendered
in any such action, suit or proceeding, shall be brought exclusively in a
federal or state court of competent jurisdiction in the State of New York in the
Borough of Manhattan. By its execution and delivery of this Agreement, each of
the signatories to this Agreement irrevocably accepts and submits itself to the
jurisdiction of a court of competent jurisdiction in the State of New York, as
applicable under the preceding sentence, with respect to any such action, suit
or proceeding. Each of the signatories to this Agreement waives any right it may
have, and agrees not to request, trial by jury in any suit, action or proceeding
with respect to this Agreement and the transactions contemplated
hereby.
19. Consent
to Service of Process. Each of the
signatories to this Agreement irrevocably consents to service of process by mail
at the address listed with the signature of each such party on the signature
pages to this Agreement. Each of the signatories to this Agreement agrees that
its submission to jurisdiction and consent to service of process by mail is made
for the express benefit of each of the other signatories to this Agreement.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.
20. Specific
Performance. It is understood
and agreed by each of the signatories to this Agreement that money damages would
not be a sufficient remedy for any breach of this Agreement by any party and
each non-breaching party shall be entitled to specific performance, injunctive,
recessionary or other equitable relief as remedy for any such breach, without
the requirement to post any bond or security.
14
21. Headings. The headings of
the sections, paragraphs and subsections of this Agreement are inserted for
convenience only and shall not affect the interpretation hereof.
22. Successors
and Assigns. This Agreement
is intended to bind and inure to the benefit of the signatories to this
Agreement and their respective successors, permitted assigns, heirs, executors,
administrators and representatives. The agreements, representations and
obligations of the undersigned parties under this Agreement are, in all
respects, several and not joint.
23. Additional
Existing Notes. If, after the
date hereof and prior to expiration of the Exchange Offer, Noteholder acquires
beneficial or record ownership of any additional Existing Notes (any such
Existing Notes, “Additional
Notes”),
Noteholder shall promptly notify the Company of such acquisition and the
provisions of this Agreement shall be applicable to such Additional Notes as if
such Additional Notes had been Existing Notes owned by Noteholder as of the date
hereof. The provisions of the immediately preceding sentence shall be effective
with respect to Additional Notes without action by any person or entity
immediately upon the acquisition by Noteholder of beneficial or record ownership
of such Additional Notes.
24. Counterparts. This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original and all of which shall constitute one and the same agreement. Delivery
of an executed counterpart of a signature page by facsimile shall be as
effective as delivery of a manually executed counterpart.
25. No
Third-Party Beneficiaries. Except for the
Company Parties and the Noteholder Released Parties (which are hereby expressly
made third party beneficiaries of this Agreement), this Agreement shall be
solely for the benefit of the signatories to this Agreement, and no other Person
or entity shall be a third-party beneficiary hereof.
26. Severability. If any provision
of this Agreement is found by any court of competent jurisdiction to be invalid
or unenforceable, the provision that would otherwise be prohibited, invalid or
unenforceable shall be deemed amended to apply to the fullest extent that it
would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this
Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter
hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties.
The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of
which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).
27. Consideration. It is hereby
acknowledged by each of the signatories to this Agreement that no consideration
(other than the obligations of the other parties under this Agreement and the
other Exchange Documents) has been paid or shall be due or paid to the parties
for their agreement to support the Exchange Offer in accordance with the terms
and conditions of this Agreement.
15
28. Fees and
Expenses. Each of the
parties shall pay all of its expenses incurred in connection with the
negotiation, preparation, execution and delivery of this Agreement, and the
Company shall pay all expenses related to the Exchange Offer.
[SIGNATURES
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IN
WITNESS WHEREOF, the parties hereto have caused this Settlement and Exchange
Support Agreement to be duly executed as of the date first set forth
above.
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THE COMPANY:
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CELL
GENESYS, INC.
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By:
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/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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||
|
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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Title: Chief
Executive Officer
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NOTEHOLDER:
TANG
CAPITAL PARTNERS, LP
By Tang
Capital Management, LLC, its general partner
| By: |
/s/
▇▇▇▇▇ ▇. ▇▇▇▇
|
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Name: ▇▇▇▇▇
▇. ▇▇▇▇
|
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Title: Managing
Director
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17