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EXHIBIT 10.50
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
DATED AS OF APRIL 1, 1997
BETWEEN
CELTRIX PHARMACEUTICALS, INC.
AND
THE PURCHASERS LISTED ON EXHIBIT A
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COMMON STOCK AND WARRANT PURCHASE AGREEMENT
THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT ("Agreement") is
entered into as of this 1st day of April, 1997 between Celtrix Pharmaceuticals,
Inc., a Delaware corporation ("Celtrix"), and the purchasers listed on the
attached Exhibit A ("Purchasers").
SECTION 1
SALE OF COMMON STOCK AND WARRANTS
1.1 SALE OF COMMON STOCK AND WARRANTS. Subject to the terms
and conditions hereof, Celtrix will issue and sell to each Purchaser, and each
Purchaser will purchase from Celtrix, at the Closing (as defined below) the
number of Units set forth opposite each Purchaser's name on Exhibit A. A
"Unit" shall be composed of two shares ("Shares") of common stock, $0.01 par
value, of Celtrix ("Common Stock") and a warrant to purchase one share of
Common Stock ("Warrant Share"). A form of the warrant is attached as Exhibit B
("Warrant"). The purchase price per Unit ("Unit Purchase Price") shall be
equal to two (2) multiplied by the lower of: (i) the closing bid price of the
Common Stock as reported on the Nasdaq National Market on the day preceding the
Closing Date (as defined below), or (ii) the average of the closing bid prices
of the Common Stock as reported on the Nasdaq National Market for the 5 trading
days prior to the Closing Date. The exercise price per Warrant Share shall be
equal to 110% multiplied by 50% of the Unit Purchase Price.
1.2 CLOSING DATE. The closing of the purchase and sale of the
Units ("Closing") shall be held at the law offices of Venture Law Group, ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ on April 1, 1997, or at such other time
and place upon which Celtrix and the Purchasers purchasing a majority of the
Units shall mutually agree (the date of the Closing is hereinafter referred to
as the "Closing Date").
1.3 DELIVERY. At the Closing, Celtrix will deliver to each
Purchaser certificates representing the Shares and Warrants purchased by such
Purchaser, against payment of the aggregate Unit Purchase Price therefor, by
wire transfer to Celtrix or certified or cashier's check drawn on a United
States bank made to the order of Celtrix.
SECTION 2
REPRESENTATIONS AND WARRANTIES OF CELTRIX
Celtrix hereby represents and warrants to the Purchasers as of the
Closing Date as follows:
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2.1 ORGANIZATION AND STANDING. Celtrix is a corporation duly
organized and validly existing under, and by virtue of, the laws of the State
of Delaware and is in good standing as a domestic corporation under the laws of
said state and is qualified as a foreign corporation in California and in all
other jurisdictions in which such qualification is required; provided, however,
that Celtrix need not be qualified in a jurisdiction in which its failure to
qualify would not have a material adverse effect on the business, properties,
prospects or financial condition of Celtrix.
2.2 CORPORATE POWER; AUTHORIZATION. Celtrix has all requisite
legal and corporate power and has taken all requisite corporate action to
execute and deliver this Agreement and the Warrants, to sell and issue the
Shares, the Warrants and the Warrant Shares and to carry out and perform all of
its obligations under this Agreement and the Warrants. This Agreement and the
Warrants constitute the legal, valid and binding obligation of Celtrix,
enforceable in accordance with their terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally and (ii) as limited by equitable
principles generally. The execution and delivery of this Agreement and the
Warrants does not, and the performance of this Agreement and the Warrants and
the compliance with the provisions hereof and thereof and the issuance, sale
and delivery of the Shares, the Warrants and the Warrant Shares by Celtrix will
not materially conflict with, or result in a breach or violation of the terms,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of any lien pursuant to the terms of, the Certificate of
Incorporation or Bylaws of Celtrix or any statute, law, rule or regulation or
any state or federal order, judgement or decree or any indenture, mortgage,
lease or other agreement or instrument to which Celtrix, or any of its
properties, is subject.
2.3 SHARES; WARRANT SHARES. The Shares and the Warrants (and the
Warrant Shares issuable upon exercise of the Warrants) when issued in
compliance with the provisions of this Agreement or the Warrants, as the case
may be, will be duly and validly authorized, issued, fully paid and
nonassessable. Based on the representations and warranties of the Purchasers
contained herein, the Shares and the Warrants (and the Warrant Shares) when
issued in compliance with the provisions of this Agreement or the Warrants, as
the case may be, will be issued in compliance with federal and state securities
laws. The issuance and delivery of the Shares and the Warrants (and the
Warrant Shares upon exercise of the Warrants) is not subject to preemptive or
any other similar rights of the stockholders of Celtrix or any liens or
encumbrances. Celtrix has reserved such number of shares of its Common Stock
necessary for issuance of the Warrant Shares.
2.4 CAPITALIZATION. The authorized capital stock of Celtrix
consists of 30,000,000 shares of Common Stock, $0.01 par value, of which at
December 31, 1996, 15,263,429 shares were issued and outstanding, and 2,000,000
shares of Preferred Stock, $0.01 par value per share, no shares of which are
issued and outstanding. All such issued and outstanding shares have been duly
authorized and validly issued and are fully paid and nonassessable. In
addition to the foregoing, Celtrix has reserved and outstanding the following
warrants, options and convertible securities: (i) warrants for the purchase of
687,155 shares of Common Stock at an exercise price of $9.00 per share, which
warrant expires November 17,1998; (ii) 1,500,000 shares reserved for issuance
pursuant to Celtrix's 1991 Stock Option Plan, of which, at December 31, 1996
options
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to purchase 32,174 shares had been exercised, options to purchase 975,125
shares were outstanding and 492,701 shares remained available for future grant;
(iii) 250,000 shares reserved for issuance pursuant to Celtrix's 1991 Employee
Stock Purchase Plan, of which, at December 31, 1996, 101,132 shares had been
issued and 148,868 shares remained available for future issuance; and (iv)
200,000 shares reserved for issuance under Celtrix's 1991 Directors' Stock
Option Plan, of which, at December 31, 1996, options to purchase 39,998 shares
were outstanding and 160,002 shares remained available for future grant.
Except for an option to purchase 75,000 shares of Common Stock to be granted in
connection with this transaction and except for securities issued in the
ordinary course of business under Celtrix's stock plans, no additional
securities of Celtrix will be issued and outstanding as of the Closing. Except
as described in this Section 2.4 and except for ▇.▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and
Company's right to purchase such amount of newly issued securities of Celtrix
in order to maintain their respective percentage ownership of Celtrix Common
Stock, there are no other options, warrants, conversion privileges or other
contractual rights currently outstanding to purchase or otherwise acquire any
authorized but unissued shares of Celtrix's capital stock or other securities.
2.5 PRIVATE PLACEMENT OFFERING MEMORANDUM; SEC DOCUMENTS;
FINANCIAL STATEMENTS. Each complete or partial statement, report, prospectus
filed under the Securities Act of 1933, as amended ("Securities Act"), or proxy
statement included in or referred to in the Private Placement Offering
Memorandum of Celtrix dated March 17, 1997 ("Memorandum") is a true and
complete copy of or excerpt from such document as filed by Celtrix with the
Securities and Exchange Commission ("SEC") ("SEC Documents"). Celtrix has filed
all the documents that Celtrix was required to file with the SEC under Sections
13 or 14(a) of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), since the date on which its last report on Form 10-K was filed. As of
their respective filing dates, the SEC Documents complied in all material
respects with the requirements of the Exchange Act or the Securities Act, as
applicable. Neither the Memorandum nor any of the SEC Documents as of their
respective dates contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The financial statements of Celtrix included in the SEC
Documents or the Memorandum ("Financial Statements") comply as to form in all
material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto. Except as may
be indicated in the notes to the Financial Statements or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC, the Financial
Statements have been prepared in accordance with generally accepted accounting
principles consistently applied and fairly present the consolidated financial
position of Celtrix and any subsidiaries at the dates thereof and the
consolidated results of their operations and consolidated cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal,
recurring adjustments).
2.6 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, or local governmental authority, including
without limitation the U.S. Food and Drug Administration, on the part of
Celtrix is required in connection with the consummation of the transactions
contemplated by this Agreement except for (a) compliance with foreign
securities laws, federal
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securities laws and state "blue sky" laws in the jurisdictions in which Units
are offered and/or sold, which compliance will be effected in accordance with
such laws, (b) filing the Nasdaq National Market Notification Form for listing
of additional shares, which filing will be effected in accordance with the
rules thereunder or an appropriate waiver will be obtained, and (c) filing with
the SEC and NASD either a Current Report on Form 8-K or a Quarterly or Annual
Report on Form 10-Q or 10-K disclosing the terms of the transaction
contemplated by this Agreement. The business of Celtrix is not being conducted
in violation of any law, ordinance or regulation of any governmental entity,
including but not limited to the U.S. Food and Drug Administration, except for
violations which either singly or in the aggregate would not be reasonably
likely to have a material adverse effect on Celtrix's business, financial
condition or results of operations.
2.7 NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed
herein or in the Financial Statements, since December 31, 1996, there has not
been:
(a) any changes in the assets, liabilities, financial
condition or operations of Celtrix from that reflected in the Financial
Statements except changes in the ordinary course of business which have not
been, either in any individual case or in the aggregate, materially adverse;
(b) any material change in the contingent obligations of
Celtrix, whether by way of guarantee, endorsement, indemnity, warranty or
otherwise;
(c) any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the properties or
business of Celtrix;
(d) any declaration or payment of any dividend or other
distribution of the assets of Celtrix;
(e) any labor organization activity; or
(f) any other event or condition of any character which
has materially and adversely affected Celtrix's assets, liabilities, financial
condition or operations or prospects.
2.8 INTELLECTUAL PROPERTY. Celtrix has sufficient title and
ownership of all patents, patent applications, copyrights, trade secrets,
trademarks, proprietary information, proprietary rights, and processes
necessary for its business as now conducted and as now proposed to be conducted
in the Memorandum without any conflict with or infringement of the rights of
others except as disclosed in the documents filed with the SEC and appended to
the Memorandum, to the knowledge of Celtrix. The research, development,
manufacture, sale, and use of products presently made, used, or sold by, or
contemplated for future manufacture, sale or use by Celtrix, as disclosed in
the Memorandum, do not and would not constitute or involve a significant risk
of infringement of any patent or misappropriation of any trade secret of any
third party, except as disclosed in the Memorandum. Except as disclosed in the
documents filed with the SEC and appended to the Memorandum, there are no
outstanding options, licenses, or agreements of any kind relating to any
material use of the foregoing, nor is Celtrix bound by or a party to any
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options, licenses, encumbrances or liens, or any outstanding orders, judgments,
decrees, stipulations, or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, proprietary rights and processes of any other person or entity
that are material to Celtrix's business as currently conducted or proposed to
be conducted in the Memorandum. Celtrix has not received any communications
alleging that Celtrix, by conducting its business as proposed, would violate
any of the patents, trademarks, service marks, trade names, copyrights, or
trade secrets or other proprietary rights of any other person or entity.
Celtrix is not aware that any of its employees or consultants is obligated
under any contract (including licenses, covenants or commitments of any nature)
or other agreement, or subject to any judgement, decree or order of any court
or administrative agency, that is violated by or would materially interfere
with the current or prospective services provided to Celtrix by the employee or
consultant or the use of his best efforts to promote the interests of Celtrix
or that would materially conflict with Celtrix's business as proposed to be
conducted in the Memorandum. Neither the execution nor delivery of this
Agreement, nor the carrying on of Celtrix's business as proposed, will, to
Celtrix's knowledge, conflict with or result in a material breach of the terms,
conditions or provisions of, or constitute a material default under, any
contract, covenant or instrument under which any of such employees is now
obligated.
2.9 LITIGATION. Celtrix is not engaged in, or a party to, or
threatened with, any claim or legal action or other proceeding before any
court, any arbitrator of any kind or any administrative agency, or any
governmental investigation, which could have a material adverse effect on
Celtrix's business, financial condition or results of operations, nor to
Celtrix's knowledge does any basis for any claim or legal action or other
proceeding or governmental investigation exist. There are no orders, rulings,
decrees, judgments or stipulations to which Celtrix is a party by or with any
court, arbitrator or administrative agency and to Celtrix's knowledge, there
are no other such orders, rulings, decrees, judgments or stipulations affecting
Celtrix's business, financial condition or results of operations.
2.10 CONSISTENT TERMS. No Units are being issued and sold at the
Closing other than pursuant to the Agreement and if Celtrix shall enter into
any other agreement, side letter or other understanding with any Purchaser
listed on Exhibit A or any other purchaser containing additional or contrary
undertakings or terms to those contained herein in connection with the issuance
and sale of Units at the Closing, Celtrix shall make such undertakings or terms
available to each other Purchaser.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Each Purchaser hereby separately represents and warrants, severally
and not jointly, to Celtrix as of the Closing date as follows:
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3.1 INVESTMENT EXPERIENCE. Such Purchaser is an "accredited
investor" as defined in Rule 501(a) under the Securities Act. Purchaser is
aware of Celtrix's business affairs and financial condition and has had access
to and has acquired sufficient information about Celtrix to reach an informed
and knowledgeable decision to acquire the Units (and the Warrant Shares
issuable upon exercise of the Warrants). Purchaser has such business and
financial experience as is required to give it the capacity to protect its own
interests in connection with the purchase of the Units.
3.2 INVESTMENT INTENT. Purchaser is purchasing the Units (and the
Warrant Shares upon exercise of the Warrants) for investment for its own
account only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act. Purchaser
understands that the Shares, the Warrants and the Warrant Shares have not been
registered under the Securities Act or registered or qualified under any state
securities law in reliance on specific exemptions therefrom, which exemptions
may depend upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.
3.3 REGISTRATION OR EXEMPTION REQUIREMENTS. Purchaser further
acknowledges and understands that the Shares, the Warrants and the Warrant
Shares must be held indefinitely unless they are subsequently registered under
the Securities Act or an exemption from such registration is available.
Purchaser understands that the certificate(s) evidencing the Shares will be
imprinted with a legend that prohibits the transfer of the Shares unless (i)
they are registered or such registration is not required, and (ii) if the
transfer is pursuant to an exemption from registration other than Rule 144
under the Securities Act, and, if Celtrix shall so request in writing, an
opinion of counsel satisfactory to Celtrix is obtained to the effect that the
transaction is so exempt. In addition, Purchaser will refrain from selling,
transferring or otherwise disposing of any Shares, the Warrants or the Warrant
Shares, or any interest therein, in such manner as to cause Celtrix to be in
violation of the registration requirements of the Securities Act or applicable
state securities or blue sky laws.
3.4 NO LEGAL, TAX OR INVESTMENT ADVICE. Purchaser understands
that nothing in this Agreement or any other materials presented to Purchaser in
connection with the purchase and sale of the Units (and the Warrant Shares
issuable upon exercise of the Warrants) constitutes legal, tax or investment
advice. Purchaser has consulted such legal, tax and investment advisors as it,
in its sole discretion, has deemed necessary or appropriate in connection with
its purchase of the Units (and the Warrant Shares issuable upon exercise of the
Warrants).
SECTION 4
CONDITIONS TO OBLIGATIONS OF PURCHASERS
Each Purchaser's obligation to purchase the Units at the Closing is
subject to the fulfillment on or prior to the Closing Date of the following
conditions, unless otherwise waived by such Purchaser:
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4.1 REPRESENTATIONS AND WARRANTIES CORRECT. The
representations and warranties made by Celtrix in Section 2 hereof shall be
true and correct in all material respects when made, and shall be true and
correct in all material respects on the Closing Date with the same force and
effect as if they had been made on and as of said date.
4.2 COVENANTS. All covenants, agreements and conditions
contained in this Agreement to be performed by Celtrix on or prior to the
Closing Date shall have been performed or complied with in all material
respects.
4.3 OPINION OF COMPANY'S COUNSEL. Purchaser shall have
received from Venture Law Group, counsel to Celtrix, an opinion addressed to
it, dated the Closing Date, in substantially the form that is customary for
similar financial transactions.
4.4 NO ORDER PENDING. There shall not then be in effect any
order enjoining or restraining the transactions contemplated by this Agreement.
4.5 NO LAW PROHIBITING OR RESTRICTING SUCH SALE. There shall
not be in effect any law, rule or regulation prohibiting or restricting such
sale, or requiring any consent or approval of any person which shall not have
been obtained to issue the Units (except as otherwise provided in this
Agreement).
4.6 COMPLIANCE CERTIFICATE. Celtrix shall have delivered to
Purchasers a certificate executed on behalf of Celtrix by a duly authorized
officer of Celtrix, dated the Closing Date, and certifying to the fulfillment
of the conditions specified in Sections 4.1 and 4.2. Notwithstanding the
preceding sentence, Celtrix shall not be required to deliver such a certificate
if the Closing Date and the execution date of this Agreement are the same.
4.7 NO MATERIAL ADVERSE CHANGE. There shall have been no
material adverse change between the date of this Agreement and the Closing Date
in the financial condition, business or affairs of Celtrix.
4.8 GOVERNMENTAL APPROVALS. All consents from governmental
agencies required to consummate the transaction contemplated hereby shall have
been obtained.
SECTION 5
CONDITIONS TO OBLIGATIONS OF CELTRIX
Celtrix's obligation to sell and issue the Units at the Closing is
subject to the fulfillment on or prior to the Closing Date of the following
conditions by each of the Purchasers, unless otherwise waived by Celtrix:
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The
representations and warranties made by each Purchaser in Section 3 hereof shall
be true and correct in all material
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respects when made, and shall be true and correct in all material respects on
the Closing Date with the same force and effect as if they had been made on and
as of said date.
5.2 COVENANTS. All covenants, agreements and conditions
contained in this Agreement to be performed by each Purchaser on or prior to
the Closing Date shall have been performed or complied with in all material
respects.
5.3 NO ORDER PENDING. There shall not then be in effect any
order enjoining or restraining the transactions contemplated by this Agreement.
5.4 NO LAW PROHIBITING OR RESTRICTING SUCH SALE. There shall
not be in effect any law, rule or regulation prohibiting or restricting such
sale, or requiring any consent or approval of any person which shall not have
been obtained to issue the Units (except as otherwise provided in this
Agreement).
5.5 GOVERNMENTAL APPROVALS. All consents from governmental
agencies required to consummate the transaction contemplated hereby shall have
been obtained.
SECTION 6
COVENANTS OF CELTRIX
Until the termination of this Agreement in accordance with Section 9.1
hereof or the particular covenant, as the case may be:
6.1 WARRANTS. Celtrix will comply with the provisions of the
Warrants contained in the Form of Warrant attached as Exhibit B hereto.
6.2 REGISTRATION REQUIREMENTS.
(a) As soon as reasonably practicable and in any event no
later than 45 days after the Closing, Celtrix shall prepare and file a
registration statement with the SEC under the Securities Act to register the
resale of the Shares and the Warrant Shares ( "Registrable Securities") and
thereafter shall use its best efforts to secure the effectiveness of such
registration statement.
(b) Celtrix shall pay all Registration Expenses (as
defined below) in connection with any registration, qualification or compliance
hereunder, and each holder of Registrable Securities ("Holder") shall pay all
Selling Expenses (as defined below) and other expenses that are not
Registration Expenses relating to the Registrable Securities resold by such
Holder. "Registration Expenses" shall mean all expenses, except for Selling
Expenses, incurred by Celtrix in complying with the registration provisions
herein described, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for Celtrix, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration.
"Selling Expenses" shall mean all selling
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commissions, underwriting fees and stock transfer taxes applicable to the
Registrable Securities and all fees and disbursements of counsel for any
Holder.
(c) In the case of any registration effected by Celtrix
pursuant to these registration provisions, Celtrix will use its best efforts
to: (i) keep such registration effective until the earlier of (A) two (2)
years after the Closing Date or (B) such date as Celtrix shall be satisfied
that the then-current Holders may sell all of their Registrable Securities then
outstanding within a three (3) month period; (ii) prepare and file with the SEC
such amendments and supplements to such registration statement and the
prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement; (iii)
furnish such number of prospectuses and other documents incident thereto,
including any amendment of or supplement to the prospectus, as a Holder from
time to time may reasonably request; (iv) use its best efforts to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided that Celtrix shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions; (v) cause all such Registrable Securities registered as
described herein to be listed on each securities exchange and quoted on each
quotation service on which similar securities issued by Celtrix are then listed
or quoted; (vi) provide a transfer agent and registrar for all Registrable
Securities registered pursuant to such registration statement and a CUSIP
number for all Registrable Securities; and (vii) otherwise use its best efforts
to comply with all applicable rules and regulations of the SEC, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first month after the effective date
of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act.
(d) When a Holder is entitled to sell and gives notice of
its intent to sell pursuant to the registration statement, Celtrix shall,
within three (3) trading days (subject to Section 7.1), furnish to such Holder
a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the Holders
of such shares, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or incomplete in the
light of the circumstances then existing.
(e) The right to sell Registrable Securities pursuant to
the registration statement described herein will automatically be assigned to
each transferee of Registrable Securities. In the event that it is necessary,
in order to permit a Holder to sell Registrable Securities pursuant to
Celtrix's registration statement, to amend the registration statement to name
such Holder, such Holder shall, upon written notice to Celtrix, be entitled to
have Celtrix make such amendment as soon as reasonably practicable.
Notwithstanding the above provisions relating to Registration Expenses, in the
event that such an amendment is requested, the Holder shall, at the request of
Celtrix, be obligated to reimburse Celtrix for reasonable Registration Expenses
incurred by it in connection with such amendment.
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(f) With a view to making available to the holders the
benefits of Rule 144 promulgated under the Securities Act and any other rule or
regulation of the SEC that may at any time permit a Holder to sell Registrable
Securities to the public without registration or pursuant to a registration on
Form S-3, Celtrix hereby covenants and agrees to: (i) make and keep public
information available, as those terms are understood and defined in Rule 144,
at all times after the closing; (ii) file with the SEC in a timely manner all
reports and other documents required of Celtrix under the Securities Act and
Exchange Act; and (iii) furnish to any Holder, as long as the Holder owns any
Registrable Securities forthwith upon request, (A) a written statement by
Celtrix that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, (B) a copy of the most recent annual or
quarterly report of Celtrix, and (C) such other information as may be
reasonably requested in order to avail any Holder of any rule or regulation of
the SEC that permits the selling of any such Registrable Securities without
registration or pursuant to such Form S-3.
(g) Indemnification.
(i) To the extent permitted by law, Celtrix will
indemnify and hold harmless each Holder, any underwriter (as defined in the
Act) for such Holder, its officers, directors, shareholders or partners and
each person, if any, who controls such Holder or underwriter within the meaning
of the Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), against any losses, claims, damages, or liabilities (joint or several)
to which they may become subject under the Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a "Violation"):
(A) any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
(B) the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading, or (C) any violation or alleged violation by Celtrix of the Act,
the Exchange Act, any state securities law or any rule or regulation
promulgated under the Act, the Exchange Act or any state securities law; and
Celtrix will pay to each such Holder, underwriter or controlling person, as
incurred, any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
Section 6.2(g)(i) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability, or action if such settlement is effected
without the consent of Celtrix (which consent shall not be unreasonably
withheld), nor shall Celtrix be liable in any such case for any such loss,
claim, damage, liability, or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder, underwriter or controlling person.
(ii) To the extent permitted by law, each selling
Holder will indemnify and hold harmless Celtrix, each of its directors, each of
its officers who has signed the registration statement, each person, if any,
who controls Celtrix within the meaning of the Act, any
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underwriter, any other Holder selling securities in such registration statement
and any controlling person of any such underwriter or other Holder, against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation occurs
in reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably incurred
by any person intended to be indemnified pursuant to this subsection
6.2(g)(ii), in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this subsection 6.2(g)(ii) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided, that, in no event shall any indemnity
under this subsection 6.2(g)(ii) exceed the net proceeds from the offering
received by such Holder, except in the case of willful fraud by such Holder.
(iii) Promptly after receipt by an indemnified
party under this Section 6.2(g) of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this Section
6.2(g), deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party (together with all other indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain one
separate counsel, with the reasonable fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 6.2(g), but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
6.2(g).
(iv) If the indemnification provided for in this
Section 6.2(g) is held by a court of competent jurisdiction to be unavailable
to an indemnified party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage, or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions that resulted
in such loss, liability, claim, damage, or expense as well as any other
relevant equitable considerations; provided, that, in no event shall any
contribution by a Holder under this
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subsection 6.2(g)(iv) exceed the net proceeds from the offering received by
such Holder, except in the case of willful fraud by such Holder. The relative
fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(v) The obligations of Celtrix and Holders under
this Section 6.2(g) shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 6.2(g), and
otherwise.
SECTION 7
COVENANTS OF PURCHASERS
7.1 NOTICE TO COMPANY OF PROPOSED SALE AND RIGHT OF COMPANY TO
SUSPEND USE OF REGISTRATION STATEMENT. If any Purchaser (as defined in Section
6.2 above) shall propose to sell any Registrable Securities pursuant to the
registration statement, it shall notify Celtrix of its intent to do so at least
three (3) full trading days prior to such sale, and the provision of such
notice to Celtrix shall conclusively be deemed to establish an agreement by
such Purchaser to comply with the registration provisions herein described.
Unless otherwise specified in such notice, such notice shall be deemed to
constitute a representation that any information previously supplied by such
Purchaser is accurate as of the date of such notice. At any time within such
three (3) trading-day period, Celtrix may refuse to permit the Purchaser to
resell any Registrable Securities pursuant to the registration statement;
provided, however, that in order to exercise this right, Celtrix must deliver a
certificate in writing to the Purchaser to the effect that a delay in such sale
is necessary because a sale pursuant to such registration statement in its
then-current form could constitute a violation of the federal securities laws.
In no event shall such delay exceed ten (10) trading days; provided, however,
that if, prior to the expiration of such ten (10) trading day period, Celtrix
delivers a certificate in writing to the Purchaser to the effect that a further
delay in such sale beyond such ten (10) trading day period is necessary because
the disclosures required to be made for a sale pursuant to such registration
statement to be in compliance with federal securities laws would be seriously
detrimental to Celtrix and its stockholders, Celtrix may refuse to permit such
Purchaser to resell any Registrable Securities pursuant to the registration
statement for an additional period not to exceed ten (10) trading days.
Celtrix may not utilize this right more than once in any three (3) month
period.
7.2 RESTRICTIONS ON SHORT-SALES. No Purchaser shall engage in any
short-sales of Celtrix's Common Stock prior to the effectiveness of the
Registration Statement, except to the extent that any such short-sale is fully
covered by freely tradable shares of Common Stock of Celtrix.
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SECTION 8
RESTRICTIONS ON TRANSFERABILITY OF SHARES; COMPLIANCE WITH
SECURITIES ACT
8.1 RESTRICTIONS ON TRANSFERABILITY. The Shares, Warrants and
Warrant Shares shall not be transferable in the absence of a registration under
the Securities Act or an exemption therefrom or in the absence of compliance
with any term of this Agreement. Celtrix shall be entitled to give stop
transfer instructions to the transfer agent with respect to the Shares in order
to enforce the foregoing restrictions.
8.2 RESTRICTIVE LEGEND. Each certificate representing Shares,
Warrants and Warrant Shares shall bear substantially the following legends (in
addition to any legends required under applicable securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THE SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM.
UNTIL __________, 1998 THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT
BE SOLD OR TRANSFERRED UNLESS PRIOR NOTICE SHALL HAVE BEEN GIVEN TO
CELTRIX.
The legend contained in this Section 8.2 will be removed from a
certificate if (i) Celtrix receives an opinion of counsel reasonably
satisfactory to Celtrix that the Shares or Warrant Shares represented by such
certificates are available for resale pursuant to Rule 144 under the Securities
Act, or (ii) in Celtrix's opinion the Shares or Warrant Shares represented by
such certificates are available for resale pursuant to Rule 144(k) under the
Securities Act, or (iii) such Shares or Warrant Shares are sold pursuant to an
effective registration statement with the SEC.
SECTION 9
MISCELLANEOUS
9.1 TERMINATION OF AGREEMENT.
(a) This Agreement may be terminated at any time prior
to the Effective Time by Celtrix or any Purchaser if there has been a material
breach of any representation, warranty, covenant or agreement on the part of
the other party set forth in this agreement, which breach shall not have been
cured, in the case of a representation or warranty, prior to the Closing or, in
the case of a covenant or agreement, within thirty (30) calendar days following
receipt by the breaching party of written notice of such breach from the other
party.
13
15
(b) From and after the termination of this Agreement,
the covenants, obligations and agreements of the parties set forth herein shall
be of no further force or effect and the parties shall be under no further
obligation with respect thereto.
9.2 BEST EFFORTS. Celtrix and each Purchaser shall use its
best efforts to take all actions required under any law, rule or regulation
adopted subsequent to the date hereof in order that Celtrix may sell the Units
to Purchasers and Purchasers may purchase the Units, and to ensure that the
conditions to a Closing set forth herein are satisfied on or before the
scheduled date of such Closing.
9.3 GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of Delaware as applied to contracts entered
into solely between residents of, and to be performed entirely within, such
state.
9.4 SURVIVAL. The representations and warranties, in Sections
2 and 3 of this Agreement shall survive any investigation made by any Purchaser
or Celtrix and the Closing; provided that such representations and warranties
shall not be construed so as to constitute representations and warranties
concerning circumstances existing after the date of this Agreement.
9.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns. This Agreement may not be assigned by a party without
the prior written consent of the other party.
9.6 ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Warrants and
the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof and thereof and supersedes all prior agreements and
understandings among the parties relating to the subject matter hereof. With
the exception of Section 6 hereof, the terms of this Agreement may be waived or
amended with the written consent of Celtrix and each Purchaser. With respect
to Section 6 hereof, with the written consent of Celtrix and the record holders
of more than fifty percent (50%) of the Registrable Securities then outstanding
the terms of this Agreement may be waived and amended and any such amendment or
waiver shall be binding upon Celtrix and all holders of Shares.
9.7 NOTICES AND DATES. Any notice or other communication given
under this Agreement shall be sufficient if in writing and sent by registered
or certified mail, domestic or international courier, or facsimile, return
receipt requested, postage or courier charges prepaid, to a party at its
address set forth below (or at such other address as shall be designated for
such purpose by such party in a written notice to the other party hereto):
(a) if to Celtrix, to:
Celtrix Pharmaceuticals, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
14
16
Attention: Chief Financial Officer
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Venture Law Group
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) if to Purchasers, to the respective address
set forth on the attached Schedule of Purchasers
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
All such notices and communications shall be effective one
(1) trading day after being sent by courier or by facsimile with confirmation
of receipt or five (5) trading days after being sent by the other approved
methods.
9.8 SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restriction of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
9.9 COSTS AND EXPENSES. Each party hereto shall pay its own
costs and expenses incurred in connection herewith, including the fees of its
counsel, auditors and other representatives, whether or not the transactions
contemplated herein are consummated.
9.10 NO THIRD PARTY RIGHTS. Nothing in this Agreement shall
create or be deemed to create any rights in any person or entity not a party to
this Agreement.
9.11 COUNTERPARTS. This Agreement may be executed in
counterparts, and each such counterpart shall be deemed an original for all
purposes, but such counterparts shall together constitute one and the same
instrument.
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EXHIBIT A
SCHEDULE OF PURCHASERS
# SHARES
PURCHASER COMMON STOCK # WARRANT SHARES PURCHASE PRICE
--------- ------------ ---------------- --------------
NAME SHARES WRNTS~ $AMOUNT
18
SCHEDULE A
SCHEDULE OF PURCHASERS
# SHARES # WARRANT
PURCHASER COMMON STOCK SHARES PURCHASE PRICE
--------- ------------ --------- --------------
Pequot Private Equity Fund, L.P. 1,456,304 728,152 $3,550,470.00
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Capital Management, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Investment Advisor
Pequot Offshore Private Equity Fund, Inc. 184,384 92,192 449,530.00
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Capital Management, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Investment Advisor
Warburg, ▇▇▇▇▇▇ Partners, L.P. 922,887 461,443 2,250,000.00
Warburg, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Partner
Biotechnology Development Fund, L.P. 1,230,516 615,258 3,000,000.00
Attn: ▇▇▇▇▇ ▇▇▇▇, General Partner
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Veron International Limited 615,258 307,629 1,500,000.00
Chinachem Group
Chinachem Golden Plaza, Top Floor
77 ▇▇▇▇ Road
Tsin Sha Tsui East
Kowloon, Hong Kong
Attn: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇, Director
Fu Sheng Industrial Co., Ltd. 410,165 205,082 999,982.60
172 Nanking East Road, Sec. 2
Taipei 104, Taiwan
R.O.C.
Attn: Shuhbin King
19
Lippo Securities Ltd. 205,086 102,543 500,000.00
2302 Lippo Tower
Lippo Centre
89 Queensway, Central
Hong Kong
Attn: ▇▇▇▇▇ ▇. ▇▇▇
▇▇▇ ▇▇▇ Au 102,543 51,271 250,000.00
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇▇, ▇▇▇, ▇▇▇▇▇ Resources ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇
Hong ▇▇▇ ▇▇ 20,508 10,254 50,000.00
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇▇, ▇▇▇, ▇▇▇▇▇ Resources ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇
Tsun ▇▇▇▇ ▇▇▇ 20,508 10,254 50,000.00
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇▇, ▇▇▇, ▇▇▇▇▇ Resources ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ Pacific, Inc. 20,508 10,254 50,000.00
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇▇, ▇▇▇, ▇▇▇▇▇ Resources ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇
Nai-▇▇▇▇ ▇▇▇▇▇ 41,012 20,506 99,988.00
▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇/▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ and ▇▇▇▇▇ ▇▇ 123,051 61,525 300,000.00
Kowloon Development Co. Ltd.
▇▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
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20
▇▇▇▇▇▇ Wanpyng Chuang & ▇▇▇▇▇ ▇▇▇-▇▇▇ 61,525 30,762 150,000.00
Chen JTWROS
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ Lie ▇▇▇▇ ▇▇▇▇ 82,034 41,017 200,000.00
1757 Tower 9
88 ▇▇▇ ▇▇▇ Reservoir Road
Hong Kong
Ho Fung Holding Co. Ltd. 61,525 30,762 150,000.00
▇▇ ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
Attn: Mr. ▇▇▇▇▇▇ ▇▇
Eng-Soon Tan 82,028 41,014 199,985.00
▇▇▇ ▇▇▇▇▇ Motor Center, 4th Floor
c/o ▇▇▇ ▇▇▇▇▇ Motor Co. Ltd.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ 2158
Li-Mam Kuo 41,017 20,508 100,000.00
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
A-▇▇▇ ▇▇▇ 41,017 20,508 100,000.00
▇▇ ▇▇. ▇▇, ▇▇▇-▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Science Based Industrial Park
Hsin-Chu, Taiwan
TOTAL 5,721,876 2,860,934 $13,949,955.60
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