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Exhibit 10.51
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
Agreement dated as of September 29, 1995 by and among ILEX ONCOLOGY,
INC., a Delaware corporation (the "Company"), and the persons identified on
Exhibit A hereto (individually a "Purchaser" and, collectively, the
"Purchasers"), whose mailing addresses and states of principal residence are as
set forth on Exhibit A.
W I T N E S S E T H:
WHEREAS, the Company desires to sell up to 5,432,500 shares of Series B
Convertible Preferred Stock, $.01 par value per share, having the rights,
preferences, privileges and restrictions described herein and in the Exhibits
and Schedules hereto (the "Series B Preferred"); the purchase price for such
shares of Series B Preferred shall be $2.00 per share.
WHEREAS, the Company and The Upjohn Company ("Upjohn") previously
entered into an agreement to which Upjohn was to purchase certain shares of
Series B Preferred.
WHEREAS, Upjohn and the Company desire to rescind and terminate their
prior agreement, and in connection therewith, Upjohn and the other Purchasers
desire to enter into this Agreement pursuant to which each of the Purchasers
will purchase shares of Series B Preferred on the terms set forth herein and in
the amounts and for the aggregate consideration set forth in Exhibit A.
NOW, THEREFORE, the Company and the Purchasers agree severally, and not
jointly, as follows:
1. Purchase and Sale. Subject to the provisions of this
Agreement (including the last sentence of this SECTION 1) and on the basis of
the representations and warranties contained herein, on the Closing Date (as
hereinafter defined), the Company will sell to each Purchaser and each
Purchaser will purchase from the Company that number of shares of the Series B
Preferred set forth on Exhibit A. The purchase price to be paid by each
Purchaser for such shares of Series B Preferred shall be equal to the product
of $2.00 per share times the number of shares of Series B Preferred purchased
at the Closing by the Purchaser (the "Purchase Price").
2. Closing of Purchase and Sale.
2.1. Closing: Closing Date. The purchase and sale of the Series B
Preferred (the "Closing") shall occur at the offices of ▇▇▇▇▇▇▇, Carton &
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and shall occur at
10:00 a.m. local time on September 29, 1995 (the "Closing Date") or such other
time and date as may be agreed upon by the Company and the Purchasers.
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2.2. Transactions at Closing. The Closing of the purchase and sale of
shares of Series B Preferred to be made to Purchasers shall be effected on the
Closing Date. On the Closing Date, (i) the Company and each Purchaser shall
execute and deliver each agreement included as an exhibit hereto to which they
are a party, (ii) the Company shall deliver to each Purchaser a stock
certificate for the Series B Preferred to be issued and sold to each Purchaser,
duly registered in such Purchaser's name, and (iii) the Purchasers shall
deposit by wire transfer of immediately available funds or bank certified or
cashier's check the aggregate Purchase Price called for the in SECTION 1 of
this Agreement into one or more bank accounts of the Company as shall be
designated by the Company prior to this Closing.
2.3. Additional Purchaser. The Company shall have the right for a
period of ten (10) days following the Closing Date to sell up to 10,000 shares
of Series B Preferred (the "Additional Shares") at a purchase price of $2.00
per share (the "Additional Sale") to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, (the "Additional
Purchaser"), provided that the Additional Sale shall be effected by the
execution by the Additional Purchaser as parties hereto, with all rights and
obligations of a Purchaser hereunder. In the event of such Additional Sale,
for all purposes related to this Agreement, the Additional Purchaser shall be
deemed to have executed this Agreement as of the date hereof and the Additional
Sale shall be deemed to have occurred as of the Closing Date.
3. Representations and Warranties of Company. The Company
represents and warrants to the Purchasers as follows:
3.1. Organization, Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full power and authority to own, lease
and operate its properties and assets and to conduct its business as presently
conducted and as proposed to be conducted, and to enter into this Agreement and
the Registration Rights Agreement (as defined in SECTION 5.7) and to carry out
the transactions contemplated by such agreements. The Company is duly
qualified to do business as a foreign corporation and is in good standing in
the State of Texas and in every other jurisdiction in which the failure to so
qualify would have a material adverse effect on the business, assets,
operations or financial condition of the Company.
3.2. Capitalization. The authorized capital stock of the Company
consists of (a) 20,000,000 shares of preferred stock $.01 par value per share
("Preferred Stock"), of which (i) 5,239,900 shares have been designated as
Series A Convertible Preferred Stock, $.01 par value per share (the "Series A
Preferred"), all of which are issued and outstanding and (b) 40,000,000 shares
of Common Stock, of which (i) 2,080,100 shares are issued and outstanding, (ii)
5,239,900 shares are reserved for issuance on conversion of the Series A
Preferred, (iii) 1,000,000 shares are reserved for issuance on exercise of
options issued or to be issued to employees, advisors, officers, directors and
consultants of, and other persons performing services for, the Company pursuant
to stock option plans approved by the Board of Directors of the Company and
(iv) 170,000 shares reserved for issuance on exercise of outstanding warrants
issued to Vector Securities International, Inc. (the reserved shares referred
to in (ii) through (iv) are collectively referred to as the "Reserved Shares").
The record owners of the Company's issued and outstanding Common Stock and the
holders of all options and warrants to purchase Common Stock are set forth on
Schedule 3.2 hereto. The issued and outstanding
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shares of the Company's capital stock have been duly authorized and validly
issued and are fully paid and non-assessable. Holders of shares of the
Company's capital stock have no preemptive rights and, except as set forth in
SECTION 7.6 of this Agreement, no holder of shares of the Company's capital
stock has any right of first refusal to purchase securities sold by the
Company. Except for the Series A Preferred and transactions contemplated by
this Agreement (including the exhibits hereto) and except for the shares
reserved for issuance as set forth in this section, there are no outstanding
warrants, options, convertible securities or rights (contingent or otherwise)
to subscribe for or purchase any capital stock or other securities from the
Company. The Company is not required to register any of its equity securities
under Section 12(a) or 12(g) of the Securities Exchange Act of 1934. The
designations, powers, preferences, rights, qualifications, limitations and
restrictions in respect of each class and series of authorized capital stock of
the Company are as set forth in the Certificate of Incorporation (as defined
below), and of the Series B Preferred will be set forth in the Certificate of
Incorporation prior to the Closing, and, all such designations, powers,
preferences, rights, qualifications, limitations and restrictions are valid,
binding and enforceable and in accordance with all applicable laws. Except as
contemplated by this Agreement or set forth in Schedule 3.2, (i) there are no
restrictions on the transfer of shares of capital stock of the Company other
than those imposed by relevant state and federal securities laws, (ii) there
are no agreements, understandings, proxies, trusts or other collaborative
arrangements concerning the voting, pledge or purchase and sale of the capital
stock of the Company to which the Company is a party, or to the Company's
knowledge, to which any other Person is a party, (iii) no holder of any
security of the Company is entitled to preemptive, first refusal or similar
statutory or contractual rights, either arising pursuant to any agreement or
instrument to which the Company is a party, or which are otherwise binding upon
the Company, or the Company's knowledge, to which any other Person is a party.
Except as provided for in the Certificate of Incorporation, the Company has no
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any of its equity securities or any interest therein or to pay any dividend or
make any other distribution in respect thereof. Other than pursuant to the
terms of the Registration Rights Agreement, no Person has demand or other
rights to cause the Company to file any registration statement under the
Securities Act of 1933 relating to any securities of the Company or any right
to participate in any such registration.
3.3. Validity of Stock. Prior to the Closing, the Certificate of
Designation, Preferences and Rights of Series B Convertible Preferred Stock in
the form attached hereto as Exhibit 3.3(A) will have been duly filed with the
Delaware Secretary of State. On the Closing Date, the Series B Preferred will
be duly authorized and, when issued and sold in accordance with the terms of
this Agreement, will be duly and validly issued, and fully paid and non-
assessable and will be free and clear of all liens, charges, encumbrances or
restrictions imposed by or through the Company except as set forth in this
Agreement, the Registration Rights Agreement or applicable securities laws. On
the Closing Date, the Common Stock issuable upon conversion of the Series B
Preferred will be duly authorized and reserved for issuance by all necessary
action and when issued and sold upon such conversion in accordance with the
terms of this Agreement and the Company's Certificate of Incorporation, as
amended (including the Certificate of Designation, Preferences and Rights of
Series B Convertible Preferred Stock), in the form of Exhibit 3.3(B) (the
"Certificate of Incorporation") will be duly and validly issued, fully paid and
non-assessable.
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3.4. Subsidiaries. The Company has no subsidiaries and does not own
or control, directly or indirectly, any other corporation, partnership,
association, joint venture or entity.
3.5. Financial Statements. The Company has furnished each Purchaser
with the Company's (i) consolidated audited balance sheet (the "Audited Balance
Sheet") as of December 31, 1994 (the "Audited Balance Sheet Date") and
consolidated audited statements of operations for the year ended December 31,
1994 ("Audited Income Statement") and (ii) consolidated unaudited balance sheet
(the "Unaudited Balance Sheet") as of June 30, 1995 (the "Unaudited Balance
Sheet Date") and consolidated unaudited statements of operations for the six
(6) months ended June 30, 1995 ("Unaudited Income Statement") (each of which in
(i) and (ii) above are collectively referred to as the "Financial Statements"
and are attached hereto as Schedule 3.5). The Financial Statements are true
and correct in all material respects, are in accordance with the books and
records of the Company, have been prepared in accordance with generally
accepted accounting principles ("GAAP") consistently applied, and fairly and
accurately present in all material respects the financial position of the
Company as of such dates and the results of its operations for the periods then
ended, provided that the Unaudited Financial Statements may not contain all
footnotes required by GAAP and the Unaudited Balance Sheet and the Unaudited
Balance Sheet Date, the Company has not incurred or otherwise become subject to
any liabilities, debts or obligations otherwise than in the ordinary course of
business consistent with past practice, except for those listed on Schedule 3.5
attached hereto and those that, would not individually or in the aggregate have
a material adverse effect on the financial condition of the Company.
3.6. Insurance. Schedule 3.6 contains a list of all insurance
policies (specifying (a) the Insurer, (b) the amount of coverage and (c) the
type of insurance) maintained by or on behalf of the Company on the properties,
assets, business or personnel of the Company, all of which are (and pending
Closing will continue to be) in full force and effect.
3.7. Authorization: Approvals. The Company has the requisite
corporate power and authority to execute and deliver this Agreement and the
Registration Rights Agreement, to perform its obligations hereunder and
thereunder and to engage in the transactions contemplated hereby and thereby.
The execution, delivery and performance by the Company of this Agreement and
the Registration Rights Agreement, have been duly authorized by all necessary
corporate action, and this Agreement has been, and at the Closing the
Registration Rights Agreement will have been, duly executed and delivered by
the Company. This Agreement constitutes, and at the Closing the Registration
Rights Agreement will constitute, the legal, valid and binding obligation of
the Company legally enforceable against the Company in accordance with their
respective terms. The Company has obtained all material consents,
authorizations and approvals of, and has made or will make all material
declarations and filings with, all federal and state governmental authorities
required on the part of the Company in connection with the consummation of the
transactions contemplated by this Agreement, except to the extent any failure
by the Company to comply with the foregoing is due to misrepresentations or
nondisclosure of one or more Purchasers.
3.8. No Conflict with Other Instruments and Laws. Except as set forth
on Schedule 3.8 or any other Schedules hereto, the execution of and performance
by the Company of its
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obligations under this Agreement and the Registration Rights Agreement will not
violate any provision of law or governmental rule or regulation and will not
conflict with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default (with notice, lapse of time or both)
under (i) the Company's Certificate of Incorporation, (ii) the Company's by-
laws as currently in effect which are attached hereto as Exhibit 3.8 (the "By-
laws"), (iii) any statute, law, rule, regulation, judgment, decree or order to
which the Company is bound or applicable to the Company or its assets or (iv)
any agreement, contract, lease, indenture or other instrument to which the
Company is a party.
3.9. Absence of Undisclosed Liabilities: Changes. Except as otherwise
described in Schedule 3.9 or any other Schedule hereto, the Company does not
have any liability or obligation (whether accrued, contingent or otherwise),
which individually or in the aggregate exceeds $100,000 (including, without
limiting the generality of the foregoing, any tax liabilities due or to become
due to the extent they relate to the conduct of the business of the Company
through the date hereof) not reflected in the Financial Statements, except (i)
obligations and liabilities incurred after the Unaudited Balance Sheet Date in
the ordinary course of business consistent with past practice; (ii) obligations
under contracts made in the ordinary course of business consistent with past
practice that would not be required to be reflected or disclosed in financial
statements prepared in accordance with GAAP; and (iii) obligations under or
contemplated by this Agreement. The Company has not become directly or
contingently liable on any indebtedness, liability or obligations of any other
Person.
Since the Unaudited Balance Sheet Date, there has been no occurrence or
development that has had or is reasonably likely to have a material adverse
effect on the Company's business, assets, operations or financial condition or
prospects, and there has been no material adverse change in the business,
assets, operations or financial condition or prospects of the Company.
3.10. Labor Agreement and Actions. The Company is not bound by or
subject to any contract with any labor union and, to the knowledge of the
Company, no labor union has requested or has sought to organize or represent
any of the employees of the Company. There is no strike or other labor dispute
involving the Company pending, or to the knowledge of the Company threatened,
which could reasonably be expected to have a material adverse effect on the
business, assets, operations or financial condition of the Company, nor is the
Company aware of any labor organization activity involving its employees.
3.11. Compliance with Law and Other Instruments. The Company has
complied with and is not in violation of (with due notice or lapse of time or
both) any agreement, instrument, statute or governmental rule or regulation
(including, without limitation, its charter and bylaws) or any governmental
order, judgment, decree, writ, injunction or award of any arbitration, court or
governmental authority applicable to it or its business, operations, assets or
services, applicable to it or its assets that has or could reasonably be
expected to have a material adverse effect on the business, assets, operations
or financial condition of the Company. To the knowledge of the Company, no
employee of the Company is in violation of any term of any employment contract
or any other contract or agreement relating to the employment of such employee
with the Company, as applicable, the violation of which could reasonably be
expected to have a material adverse effect on the business, assets, operations
or financial condition of the
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Company. Except for governmental licenses, permits, approvals and consents,
the failure to obtain any of which alone or in the aggregate could not
reasonably be expected to have a material adverse effect on the business,
assets, operations or financial condition of the Company, Schedule 3.11 hereto
lists all governmental licenses, permits, franchises, approvals and consents
required to be received or obtained by the Company to conducts its business as
presently conducted, all of which the Company currently possesses.
3.12. Proprietary Rights. Schedule 3.12 contains a list of all
patents, trademarks, trade names and service marks (and all applications
therefor), whether or not registered ("Proprietary Rights"), used by the
Company in the conduct of its business. The Company owns or has the right to
use without the payment of royalties or fees or other consideration (except as
disclosed on Schedule 3.12 of any other Schedules hereto), all Proprietary
Rights and Intellectual Property Rights necessary for or used by it in the
conduct of its business as now conducted, and with respect to Mitoguazone,
Crisnatol Mesylate, Dihydro-5-Azacytide, piritrexim, oxypurinol and
difluoromethylornithine as proposed to be conducted. Except as set forth on
Schedule 3.12 or any other Schedules hereto, none of the Proprietary Rights or
Intellectual Property Rights has been declared invalid, been limited by order
of any court or by agreement, or is the subject of any infringement,
interference or similar proceeding or challenge. The Company has not
infringed, and is not infringing, on the Proprietary Rights or Intellectual
Property Rights of others which could have a material adverse effect on the
business, assets, operations or financial condition of the Company. The
conduct of the Company's business as proposed to be operated is not expected to
conflict with or infringe upon the Proprietary Rights and Intellectual Property
Rights (as defined below) of others. Except as set forth on Schedule 3.12 or
any other Schedules hereto, the Company has no obligation to compensate any
Person for the use of any such Proprietary Rights or other Intellectual
Property Rights and the Company has not granted to or assigned to any Person
any license or other right to use any of the Proprietary Rights or other
Intellectual Rights or other Intellectual Property Rights and the Company has
not granted to or assigned to any Person any license or other right to use any
of the Proprietary Rights or other Intellectual Property Rights of the Company.
The consummation of the transactions contemplated by this Agreement will not
terminate or alter the ability of the Company to utilize the Proprietary Rights
or the terms of such use. Listed on Schedule 3.12 are all corporate, trade and
fictitious names under which the Company or its business is operated. The
Company has taken all reasonable measures to protect and preserve the security,
confidentiality and value of its Proprietary Rights or other Intellectual
Property Rights. All key employees and consultants of the Company have
executed Employment Provision Agreements in the form attached hereto as Exhibit
3.12(a) and all members of the Company's Scientific Advisory Board who have not
entered into Consulting Agreements with the Company have executed Non-
Disclosure Confidentiality Agreements in the form attached hereto as Exhibit
3.12(b). To the Company's knowledge, all trade secrets and other confidential
information of the Company are presently protectible and are not part of the
public domain or knowledge, nor, to the Company's knowledge, have they been
used, divulged or appropriated for the benefit of any Person other than the
Company or otherwise to the detriment of the Company. The Company is the
exclusive owner of all rights, titles and interests in its Proprietary Rights
and other Intellectual Property Rights as purported to be exclusively owned by
the Company and insofar as such Proprietary Rights and other Intellectual
Property Rights involve patents, copyrights, licenses, permits, license rights,
contract rights, tradenames or trademarks, such Proprietary Rights and other
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Intellectual Property Rights are valid and in full force and effect. Neither
the Company, nor to the Company's knowledge, any of its officers, employees or
consultants, has received notice of, and to the Company's knowledge there are
no claims pending or threatened that the Proprietary Rights or other
Intellectual Property Rights owned or licensed by the Company or the use or
ownership thereof by the Company infringes, violates or conflicts with any such
right of any third party or, with respect to Proprietary Rights or other
Intellectual Property Rights which involved patents, copyrights, licenses,
permits, license rights, contract rights, tradenames or trademarks, that such
Proprietary Rights or other Intellectual Property Rights are invalid or
unenforceable.
"Intellectual Property Rights" shall mean, in addition to Proprietary Rights,
any and all intellectual property rights relating to trade secrets,
confidential business information, formula, biological or chemical processes,
compounds, cell lines, fungi, yeast, laboratory notebooks, algorithms,
copyrights, claims of infringement against third parties, licenses, permits,
license rights to or of technologies, contract rights with employees,
consultants or third parties, inventions and discoveries, and other such rights
generally classified as intangible, intellectual property assets in accordance
with generally accepted accounting principles.
To the Company's knowledge, no third party has claimed or has reason to
claim that any Person employed by or affiliated with the Company has in the
course of such Person's employment by or affiliation with the Company (a)
violated or may be violating any of the terms or conditions of his or her
employment, non-competition, non-disclosure or inventions agreement with such
third party, (b) disclosed or may be disclosing or utilized or may be utilizing
any trade secret or proprietary information or documentation of such third
party or (c) interfered or may be interfering in the employment relationship
between such third party and any of its present or former employees. To the
Company's knowledge, no third party has requested information from the Company
which suggests that such a claim might be contemplated. To the Company's
knowledge, no Person employed by or affiliated with the Company has employed or
proposes to employ any trade secret or any information or documentation
proprietary to any former employer, and to the Company's knowledge, no Person
employed by or affiliated with the Company has violated any confidential
relationship which such Person may have had with any third party, in connection
with the development, manufacture or sale of any product or proposed product or
the development or sale of any service or proposed service of the Company, and
the Company has no reason to believe there will be any such employment or
violation. To the Company's knowledge, none of the execution or delivery of
this Agreement or the Registration Rights Agreement, or the carrying on of the
business of the Company as officers, employees or agents by any officer,
director or key employee of the Company, or the conduct or proposed conduct of
the business of the Company, will conflict with or result in a breach of the
terms, conditions or provisions of or constitute a default under any contract,
covenant or instrument under which any such Person is obligated.
3.13. Taxes. Except where the failure to do so would not have a
material adverse effect on the Company's business, the Company has accurately
prepared and timely filed all federal income tax returns and all state and
municipal tax returns that are required to be filed by it and has paid or made
provision for the payment of all amounts due pursuant to such returns, which
are not reflected nor reserved for on the Financial Statements and of all other
taxes, assessments
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and other governmental charges imposed upon it or upon any of its assets,
income, other than any such charges that are currently payable without penalty
or interest, including, without limitation, all taxes which the Company is
obligated to withhold from amounts owing to employees, creditors and third
parties. There is no tax lien outstanding against the assets of the Company,
except for liens for taxes not yet due and payable. The federal income tax
returns of the Company have not been audited by the Internal Revenue Service,
and there are no waivers in effect of the applicable statute of limitations for
any period. No deficiency, assessment or proposed adjustment of federal income
taxes or state or local taxes of the Company is pending, and the Company has no
knowledge of any proposed liability for any tax to be imposed.
3.14. Contracts. Except as set forth in Schedule 3.14 or any other
Schedule hereto, the Company is not a party to any contract and has no
obligation or commitment (i) involving aggregate future payments by the Company
of more than $25,000, which is not cancelable on sixty (60) days' notice by the
Company or (ii) that is otherwise material to the business of the Company
(collectively, the "Material Agreements"). Except as set forth on Schedule
3.14 or any other Schedule hereto, the Company has no employment contracts,
deferred compensation agreements or bonus, incentive, profit-sharing, or
pension plans currently in force and effect, or any understanding with respect
to any of the foregoing. Except as set forth on Schedule 3.14 or any other
Schedules hereto, no default or defaults (without regard to notice or lapse of
time or both) exist by the Company (including without limitation the Company's
predecessor in interest) in the due performance by it, or to the knowledge of
the Company by the other party or parties thereto, of any term, covenant or
condition of any contract to which the Company is a party that individually or
in the aggregate would have a materially adverse effect on the business,
assets, operations or financial condition of the Company. All of the Material
Agreements are in full force and effect.
3.15. Litigation. Except as provided in Schedule 3.15 or any other
Schedule hereto, no action, proceeding or governmental inquiry or investigation
(a "Proceeding") before any court, arbitrator or tribunal or administrative or
other governmental agency, is (i) pending, or to the knowledge of the Company,
threatened against the Company or any of its officers, directors or employees
(in their capacity as such) or affecting any of its owned or leased assets, or
(ii) to the knowledge of the Company, pending or threatened against any
consultant or shareholder of the Company (in their capacity as such) or
affecting any of its other assets, nor is the Company aware of any such
threatened or contemplated action, proceeding, inquiry or investigation nor, to
the knowledge of the Company, has there occurred any event or does there exist
any condition on the basis of which it is reasonably likely that any such
Proceeding might properly be instituted. There is no Proceeding by the Company
pending or threatened against others.
3.16. Fees and Commissions. Except for Vector Securities
International, Inc., ("Vector") the Company has not retained any finder,
broker, agent, financial advisor or other intermediary (collectively,
"Intermediary") in connection with the transactions contemplated by this
Agreement. In connection with the transactions contemplated by this Agreement,
the Company will (i) pay Vector a total of $500,000, and (ii) issue to Vector
warrants to acquire 170,000 shares of Common Stock (collectively, the "Vector
Fees").
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3.17. ERISA. Except as disclosed on Schedule 3.17, the Company does
not maintain, sponsor, or contribute (and has not during the last five (5)
years been obligated to maintain, sponsor or contribute or maintained,
sponsored or contributed) to any program or arrangement that is an "employee
pension benefit plan," an "employee welfare benefit plan," "multiple employer
welfare arrangement," or a "multi-employer plan", as those terms are defined in
Sections 3(1), 3(2), 3(4) or 3(37) of the Employee Retirement Income Security
Act of 1974, as amended, deferred compensation agreement or arrangement,
supplemental executive retirement program, vacation plan, cafeteria plan,
educational assistance plan, and any other employee benefit plans, agreements,
or arrangements (collectively, "Employee Programs"). The Company has complied
with all applicable legal requirements, including without limitation ERISA and
the Code, with respect to all Employee Programs.
3.18. Title to Properties: Encumbrances. Except as set forth in
Schedule 3.18 or any other schedule attached hereto, the Company has good and
marketable title to all of the assets owned by it and used in its business,
including, without limitation, all the material properties and assets reflected
in the Financial Statements, subject to no encumbrance, lien, charge or other
restriction of any kind or character, except for (a) liens reflected in the
Financial Statements or on Schedule 3.18 or any other Schedules hereto, (b)
liens consisting of zoning or planning restrictions, easements, permits and
other restrictions or limitations on the use of real property or irregularities
in title thereto which do not materially detract from the value of, or impair
the use of, such property by the Company, as applicable, (c) liens for current
taxes, assessments or governmental charges or levies on property not yet due
and delinquent and (d) liens which do not materially affect the operation of
the business of the Company, as applicable (liens of the type described in
clauses (a) through (d) above, inclusive, are hereinafter sometimes referred to
as "Permitted Liens"). Except as set forth in Schedule 3.18, the assets of the
Company are in good working order and condition, ordinary wear and tear
excepted.
3.19. Environmental Compliance. Except as disclosed in Schedule 3.19
and to the best of their knowledge:
(a) The Company has not released, emitted, discharged, dumped or
disposed of any hazardous substances onto or into the assets of the
Company, or any part thereof, or onto or into the air, surface or
groundwater, land or soil in violation of Environmental Laws. For
purposes of this Agreement "Hazardous Substances" has the meaning set
forth in Section 101(14) of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, and shall also
expressly include (1) petroleum, crude oil and any fraction thereof or
radioactive material; (2) any other chemical, material or substance
defined as or included in the definition of "medical waste," "infectious
waste," "hazardous substance," "hazardous waste," "hazardous material,"
"toxic substance," "special waste," "contaminant" or "pollutant," or
word or term of similar import, under any applicable Environmental Law;
and (3) any other chemical, material or substance exposure to which is
regulated by any governmental authority having jurisdiction over the
Company or is reasonably likely to give rise to any liability of the
Company, in either case under any Environmental Law. The term
"Environmental Laws" means all applicable foreign, federal, state,
county and local statutes, regulations or ordinances (including common
law duties established by courts or any published
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judicial or administrative interpretation thereof) relating to human
health and the environment or the generation, treatment, storage,
recycling, transportation, release or disposal of Hazardous Substances.
(b) No Hazardous Substances resulting from the Company's
operations have been or are currently located at, in, or under or about
either the assets of the Company or any other property currently or
previously owned or operated by the Company in a manner which: (i)
violates in any material respect applicable Environmental Laws or (ii)
requires any material response, remedial, corrective action or cleanup
of any kind under any applicable Environmental Laws.
(c) With respect to the assets or other property owned or leased
by the Company, whether previously or currently owned or operated or
used by the Company for the treatment, storage or disposal of Hazardous
Substances, the Company is not subject to any judgment, injunction,
writ, order or agreement arising from: (i) any applicable Environmental
Laws; (ii) any response, remedial or cleanup activities or (iii) any
release or threatened release of Hazardous Substances. In addition, the
Company is not now aware of any facts on which such litigation,
investigation, administrative or other proceeding of any kind is pending
or threatened by any federal, foreign, state or local governmental
entity or private party arising from: (i) any applicable Environmental
Laws; (ii) any response, remedial or cleanup activities or (iii) any
release or threatened release of Hazardous Substances. In addition, the
Company is not now aware of any facts on which such litigation,
investigation, administrative or other proceeding of any kind might
reasonably be based.
(d) With respect to the assets or other property owned or leased
by the Company, whether previously or currently owned or operated or
used by the Company for the treatment, storage or disposal of Hazardous
Substances, the Company is not subject to any judgment, injunction,
writ, order or agreement arising from: (i) any applicable Environmental
Laws; (ii) any remedial, response or cleanup activities or (iii) any
liabilities, damages, costs, fees or expenses related to the release or
threatened release of Hazardous Substances. In addition, the Company is
not aware of any facts on which such a judgment, injunction, writ, order
or agreement might reasonably be based.
(e) The assets of the Company do not contain any asbestos or PCB
containing materials in material violation of any applicable
Environmental Laws.
(f) The Company has not caused or allowed, and the Company has
not contracted with any party for, the manufacture, processing,
handling, distribution, use, transportation, treatment or storage of any
Hazardous Substances, except in compliance in all material respects with
applicable Environmental Laws. The Company does not own any real
property.
(g) The Company has obtained and is maintaining in full force
and effect all Environmental Permits and is in compliance in all
material respects therewith "Environmental Permit" shall mean any
necessary permit, license, approval or other
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authorization or filing required by the Environmental Laws applicable to
the premises leased by the Company and the business operations currently
conducted thereon and as currently proposed to be conducted.
(h) The Company and the operations of its business are being
conducted in compliance in all material respects with all applicable
Environmental Laws and orders or directives of any governmental
authority having jurisdiction under such Environmental Laws. To the
Company's knowledge, the premises leased by the Company are in
compliance in all material respects with all applicable Environmental
Laws and orders or directives of any governmental authorities having
jurisdiction under such Environmental Laws.
3.20. Affiliate Transactions. Schedule 3.20 describes all material
contracts, arrangements or transactions between the Company and to the
Company's knowledge, between any customer, licensor, licensee or supplier of
the Company, and any of the Company's Affiliates.
3.21. Exemption from Registration. In sole reliance, as to factual
matters concerning each Purchaser, upon representations and warranties by each
Purchaser in SECTION 4 hereof and without independent investigation, the offer
and sale of the Series B Preferred, and the Common Stock issuable upon
conversion of the Series B Preferred, in the matter contemplated by the
Agreement are, and upon conversion will be, (i) exempt from the registration
requirements of Section 5 of the Securities Act of 1933, as amended, and (ii)
either exempt from, or registered or qualified in compliance with, the
registration requirements of all applicable state "blue sky" securities laws.
3.22. Prior Exemptions from Registration. All offers and sales of the
Company's capital stock prior to the date hereof (i) were exempt from the
registration requirements of Section 5 of the Securities Act of 1933, as
amended, and (ii) were made in compliance with all applicable federal and state
securities laws.
3.23. Disclosure. Neither this Agreement, nor any other agreement,
document or certificate furnished to any Purchaser or its counsel by the
Company or on behalf of the Company by any of its officers or counsel in
connection with the transactions contemplated hereby, including, without
limitation, the Financial Statements, when taken as a whole, contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein and therein, in light of the
circumstances under which they were made, not misleading. The Confidential
Private Placement Memorandum dated April 26, 1995, attached as Exhibit 3.23,
was prepared in good faith and with a good faith belief in the reasonableness
of the assumptions used therein. There is no currently existing fact which
materially and adversely affects, or which in the future may (so far as the
Company can reasonably foresee) materially and adversely affect, the business,
properties, operations or condition, financial or otherwise, of the Company
(except for industry and general economic conditions and climate which are
beyond the control of the Company), which has not been set forth in this
Agreement, including the Schedules and Exhibits hereto. Without limiting the
foregoing, the Company does not have knowledge that there exists, or that there
is pending or
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planned, any patent, invention, device or application of a technology or any
statute, rule, law, regulation, standard or code which will, based solely on
information currently known by the Company, materially adversely affect the
business, prospects, operations, Proprietary Rights, Intellectual Property
Rights, affairs or financial condition of the Company.
3.24. Additional Representations.
(a) Since the Unaudited Balance Sheet Date, (i) the Company has
not entered into any material transaction, made any distribution on its
capital stock, or redeemed or repurchased any of its capital stock; (ii)
paid or cancelled any obligations or liability, other than current
liabilities paid in the ordinary course of the business consistent with
past practice; (iii) suffered any substantial losses or waived any
rights of material value, whether or not in the ordinary course of
business or covered by insurance; or (iv) purchased any properties or
assets, except in the ordinary course of business in immaterial amounts.
(b) No officer or key employee of the Company has advised the
Company (orally or in writing) that he intends to terminate employment
with the Company.
(c) Each of the Material Agreements is in full force and effect.
There is no anticipated or threatened default of the Material Agreements
and none of the parties nor the Company has provided any notice of
default or if its intention to terminate any Material Agreement. The
Company is not bound by any agreement or instrument or subject to any
charge or other corporate restriction which materially and adversely
affects the business, properties, operations, condition or prospects,
financial or otherwise, of the Company.
(d) The Company is not now and has never been a "United States
real property holding corporation", as defined in Section 897(c)(2) of
the Code and Section 1.897-2(b) of the Regulations promulgated by the
Internal Revenue Service.
(e) To the extent reasonably within its control, the Company
shall endeavor to meet the active business requirements of Section
1202(e) of the Code, provided that (i) the Company does not represent
that it is or will be a "qualified small business" within the meaning of
Section 1202(d) of the Code or that the Series B Preferred Stock is or
will be qualified small business stock as defined in Section 1202(c) of
the Code, (ii) the Company shall not be required to cause any of its
stockholders to reduce its holdings of Company capital stock, and (iii)
the Company shall not be required to change its core business as
currently conducted. The value of the assets owned directly by the
Company does not exceed Fifty Million Dollars ($50,000,000) as of the
date hereof.
4. Representations, Warranties and Covenants of Purchasers.
Each Purchaser severally represents and warrants solely as to itself to the
Company as follows:
4.1. Authorization. It has full power and authority to enter into and
to perform this Agreement, the Registration Rights Agreement (as defined in
Section 5.7) and the Stockholders
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Agreement in the form attached as Exhibit 4.1 (the "Stockholders Agreement") in
accordance with their respective terms. This Agreement has been, and at the
Closing the Registration Rights Agreement and the Stockholders Agreement will
have been, duly executed and delivered by it, and constitute valid and legally
binding obligations of the Purchaser, legally enforceable against the Purchaser
in accordance with their respective terms, subject to laws of general
application from time to time in effect affecting creditors' rights and the
exercise of judicial discretion in accordance with general equitable
principles.
4.2. Investment Representations. It is acquiring the Series B
Preferred purchased by it (and any Common Stock into which Series B Preferred
may be converted) for its own account, for investment, and not with a view to,
or for sale in connection with, any distribution of such Series B Preferred (or
related Common Stock) or any part thereof in violation of Federal or state
securities laws. The Purchaser has no present or contemplated agreement,
arrangement or commitment to dispose of Series B Preferred (or any Common Stock
into which the Series B Preferred may be converted) in violation of Federal or
state securities laws.
4.3 Investment Experience: Access to Information. It (a) is an
"accredited investor" as that term is defined in Rule 501(a) of Regulation D as
promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), has completed and delivered to the Company the investor questionnaire
attached as Exhibit 4.3 (the "Investor Questionnaire") and certifies that the
information concerning it as set forth on Exhibit A and in the Investor
Questionnaire is true and correct in all respects, (b) alone or together with
its advisors is an investor experienced in the evaluation of businesses similar
to the Company's business, and has such knowledge and experience in financial,
business and other relevant matters as to be competent and fully capable of
examining all the merits, risk and other aspects of the investment contemplated
by this Agreement on its own and to make an informed decision with respect
thereto, (c) has the ability to bear the economic risks of this investment
which could include the loss of some or all of its investment and has
sufficient other assets such that the loss of all its investment in the Company
would not have a material adverse effect on its financial condition or
adversely affects its ability to maintain its present lifestyle or operations,
as the case may be, (d) has been provided and carefully reviewed the Company's
Private Placement Memorandum dated April 26, 1995 and has been afforded prior
to the date hereof the opportunity to ask questions of, and to receive answers
from, the Company and its representatives and has received from the Company all
other information concerning the investment contemplated by this Agreement that
it has requested, and (e) acknowledges that no assurances, representations or
guaranties of any nature whatsoever (including those relating to capital
appreciation, dividends or tax aspects) have been made by the Company or anyone
else to it with regard to the performance of the investment contemplated by
this Agreement. Each Purchaser severally agrees that it will indemnify and
hold harmless the Company and its directors, officers, controlling persons and
affiliates (the "indemnities") from any liability or damage (including
reasonable attorney's fees and expenses) to any third party suffered or
incurred by any of the indemnities solely as a result of the inaccuracy of any
of the foregoing representations and warranties made by the Purchaser,
including any liability or damage arising from or under Federal or state
securities laws. No investigation pursuant to this SECTION 4.3 shall affect
any representation or warranty given by the Company in this Agreement.
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4.4. Absence of Registration. Each Purchaser understands that:
The Series B Preferred to be sold and issued hereunder (and the Common
Stock into which the Series B Preferred may be converted) have not been
registered under the Securities Act or any applicable state securities or "Blue
Sky" laws, and may be required to be held indefinitely, unless subsequently
registered under the Securities Act and such applicable Blue Sky laws, or an
exemption from such registration is available.
Except as may be required by the Registration Rights Agreement, the
Company is under no obligation to the Purchaser to file a registration
statement with the Securities and Exchange Commission (the "Commission") or any
state securities commission with respect to the Series B Preferred (or the
Common Stock into which the Series B Preferred may be converted).
4.5. Economic Risk. Each Purchaser understands that it must bear the
economic risk of the investment represented by the purchase of Series B
Preferred (and any Common Stock into which the Series B Preferred may be
converted) for an indefinite period.
4.6. Fees and Commissions. Except as described in Schedule 4.6, each
Purchaser represents and warrants that it has retained no Intermediary in
connection with the transactions contemplated by this Agreement.
Notwithstanding any disclosure on Schedule 4.6, each Purchaser agrees to
indemnify and hold harmless the Company from liability for any compensation to
any Intermediary retained by such Purchaser and the fees and expenses of
defending against such liability or any such alleged liability.
5. Conditions to Closing of the Purchasers. The obligation
of each Purchaser on the Closing Date to pay the Purchase Price required by
SECTION 2 hereof shall be subject to each of the following conditions
precedent, any one or more of which may be waived by such Purchaser:
5.1. Representations and Warranties. The representations and
warranties made by the Company herein shall be true and accurate on and as of
the Closing Date.
5.2. Performance. The Company shall have performed and complied with
all agreements and conditions contained herein required to be performed or
complied with by it prior to or at the Closing.
5.3. Consents, etc. The Company shall have secured all permits,
consents and authorizations that shall be necessary or lawfully required to
consummate the transactions contemplated by this Agreement (including consents
or approvals required under Federal or state securities laws and from the
holders of the Company's outstanding shares of Common Stock and Series A
Preferred Stock), to issue the Series B Preferred to be purchased by each
Purchaser, and to issue the Common Stock into which the Series B Preferred may
be converted.
5.4. Compliance Certificates. The Company shall have delivered to
each Purchaser or their respective representative at the Closing a certificate
signed by the President and by the Treasurer of the Company to the effect that
the representations and warranties of the Company
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contained in this Agreement continue to be true and accurate on the Closing
Date, and that all conditions specified in SECTIONS 5.2 and 5.3 have been
fulfilled, including a list of any permits, consents or authorizations required
thereby.
5.5. Proceedings and Documents. All corporate and other proceedings,
and all documentation relating thereto, necessary to consummate the
transactions contemplated by this Agreement (including but not limited to the
filing by the Company with the Delaware Secretary of State of the Certificate
of Designation, Preferences and Rights of Series B Convertible Preferred Stock)
shall be reasonably satisfactory in substance and form to the Purchaser and
Purchasers' counsel and the Purchaser and Purchasers' counsel shall have
received all such counterpart originals or certified or other copies of the
documents as the Purchaser or Purchasers' counsel may reasonably request,
including without limitation, a certificate of the Secretary of the Company
attesting to the accuracy of each of the following documents which shall be
attached to such certificate: (a) the Certificate of Incorporation of the
Company, including all amendments thereto, the Certificate of Designation,
Preferences and Rights of Series A Convertible Preferred Stock, and the
Certificate of Designation, Preferences and Rights of Series B Convertible
Preferred Stock, certified as of recent date by the Delaware Secretary of
State, (b) the By-laws of the Company, and (c) the authorizations of the Board
of Directors and stockholders of the Company relating to the Company's
execution, delivery and performance of its respective obligations, if any,
under of this Agreement and the Registration Rights Agreement and all other
agreements and transactions contemplated hereby.
5.6. Opinion of Company's Counsel. The Representative shall have
received an opinion from counsel for the Company, dated the Closing Date and
addressed to the Purchasers in substantially the form attached hereto as
Exhibit 5.6.
5.7. Registration Rights Agreement. The Company shall have executed
and delivered a Registration Rights Agreement in substantially the form
attached hereto as Exhibit 5.7 (the "Registration Rights Agreement").
5.8. Founders' Sales Agreement. ▇▇▇▇▇▇▇ ▇. Love, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (the "Founders") and the
Purchasers shall have entered into an agreement in substantially the form
attached hereto as Exhibit 5.8 (the "Founders' Sales Agreement").
5.9. Performance. Purchasers shall have committed to purchase
pursuant to this Agreement and shall at the Closing make payment on the Closing
Date of not less than an aggregate of $10,000,000 and not more than $10,865,000
for the purchaser of Series B Preferred pursuant to this Agreement.
5.10. Stockholders Agreement. Each of the other Purchasers shall have
entered into a Stockholders Agreement substantially in the form attached as
Exhibit 4.1 hereto and as of the close of business on the Closing Date, the
membership of the Board of Directors shall be in compliance with the structure
provided for in the Stockholders' Agreement and the Certificate of Designation,
Preferences and Rights of Series B Convertible Preferred Stock.
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5.11. Payment of Fees and Disbursements of Purchasers. The costs, fees
and expenses identified in SECTION 22 shall have been paid in full.
5.12. Preferred Stockholders' Sales Agreement. The Purchasers and CTRC
Research Foundation shall have entered into an agreement in substantially the
form attached hereto as Exhibit 5.12 (the "Preferred Stockholders' Sales
Agreement").
6. Conditions to Closing of Company. The obligation of the
Company on the Closing Date to issue and sell the Series B Preferred to be
purchased under this Agreement shall be subject to each of the following
conditions precedent, any one or more of which may be waived by the Company:
6.1. Representations and Warranties. The representations and
warranties made herein by each Purchaser shall be true and accurate on and as
of the Closing Date and each Purchaser shall be deemed to have restated and
confirmed such representations and warranties as of the Closing Date by
authorizing or permitting the Closing to be effected without delivering in
writing to the Company a notice of change prior to the Closing.
6.2. Performance. Purchasers shall have committed to purchase
pursuant to this Agreement and shall at the Closing make payment of not less
than an aggregate of $5,500,000 for the purchase of Series B Preferred pursuant
to this Agreement. Each Purchaser shall have performed and complied with all
agreements and conditions contained herein required to be performed or complied
with by it prior to or at the Closing.
6.3. Consents, etc. The Company shall have secured all material
permits, consents and authorizations that shall be necessary or lawfully
required to consummate the transactions contemplated by this Agreement
(including but not limited to consents or approvals required under Federal or
state securities laws).
6.4. Registration Rights Agreement. The Company and the Purchasers
shall have executed and delivered a Registration Rights Agreement in
substantially the form attached hereto as Exhibit 5.7.
6.5. Stockholders Agreement. The Purchasers shall have entered into a
Stockholders Agreement substantially in the form attached as Exhibit 4.1
hereto.
7. Affirmative Covenants.
The Company covenants and agrees that it will perform and observe the
following covenants and provisions, and will cause each Subsidiary, if and when
such Subsidiary exists, to perform and observe the following covenants and
provisions, as if they applied to it in the same manner as they apply to the
Company.
7.1. Inspection. For so long as a Purchaser (or a Permitted Holder,
as defined in SECTION 14) holds at least One Hundred Thousand (100,000) shares
of Series B Preferred (or Common Stock into which it has been converted), as
adjusted for Recapitalization Events, the
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Company will permit an authorized representative of any such Purchaser (or such
Permitted Holder) reasonable access during the normal business hours of the
Company and upon reasonable notice (which notice in no event shall be provided
less than three (3) business days in advance) to the books, records, personnel
and properties of the Company, for any reasonable purpose whatsoever related to
such Purchaser's (or such Permitted Holder's) investment in the Company. The
Company will furnish to each such Permitted Holder such other information as it
from time to time may reasonably request. For purposes of this SECTION 7.1,
"Recapitalization Events" means stock splits, stock dividends,
recapitalization, reclassifications and similar events.
7.2. Accounting. The Company will maintain a system of accounting
established and administered in accordance with GAAP consistently applied, and
will set aside on its books such proper reserves as shall be required by GAAP.
In the event the services of the independent public accountants, so selected,
or any firm of independent public accountants hereafter employed by the Company
are terminated, the Company will promptly thereafter notify the Permitted
Holders and will request the firm of independent public accountants whose
services are terminated to deliver to the Permitted Holders a letter of such
firm setting forth the reasons for the termination of their services.
7.3. Monthly and Annual Financial Statements. For so long as any
Series B Preferred remains outstanding, the Company will deliver to each
Purchaser for so long as the Purchaser continues as a stockholder of the
Company:
(a) upon the written request of a Purchaser to the Company (but
in any event to any Purchaser owning greater than 100,000 shares of
Series B Preferred), within 30 days after the end of each month and each
fiscal quarter an unaudited balance sheet of the Company as at the end
of each such month or fiscal quarter and unaudited consolidated
statements of income and of cash flow of the Company for each such month
or fiscal quarter compared to budget.
(b) within 90 days after the end of each fiscal year of the
Company, a balance sheet of the Company as at the end of such year and
statements of income and of cash flow of the Company for such year,
audited by such firm of independent public accountants of national
recognition that is appointed by the Company's Board of Directors or an
authorized committee thereof, and a report summarizing the Company's
development activities during the period, and a certificate executed by
the President confirming that during such period the Company has been in
compliance with the terms of this Agreement.
(c) promptly upon receipt thereof, any written report submitted
to the Company by independent public accountants in connection with an
annual or interim audit of the books of the Company and its Subsidiaries
made by such accountants;
(d) prior to the commencement of each fiscal year, a reasonably
detailed business plan for such fiscal year including monthly operating
expenses and profit and loss projections and a capital expenditure
budget for the fiscal year as approved by the Board
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of Directors, and promptly after any revisions to such budget approved
by the Board of Directors, a copy of such revisions.
None of the foregoing provisions of this SECTION 7 nor any other
provision of this Agreement shall be in limitation of any rights which a holder
of Series B Preferred may have with respect to the books and records of the
Company, or to inspect its properties or discuss its affairs, finances and
accounts, under the laws of the jurisdiction of its incorporation.
7.4. Use of Proceeds. The Company shall use the proceeds from the
sale of Series B Preferred for purposes of expanding the development of the
Company's cancer pharmaceutical and research business and to fulfill general
corporate working capital purposes consistent therewith. It is currently
anticipated by the Company that the proceeds will be allocated approximately as
follows: $550,000 for licensing fees for products, $580,000 for capital
expenditures, $600,000 for transaction costs (including $500,000 payable to
Vector as the cash portion of the Vector Fees), $1,500,000 for specified
operating expenses and the remainder for clinical trials and general corporate
working capital purposes.
7.5. Confidentiality and Restrictions on Trading. Any confidential or
proprietary information concerning the Company provided to any Purchaser or a
representative thereof pursuant to this Agreement or otherwise, including
SECTIONS 7.1 and 7.3 hereof, shall be used by such Purchaser or any
representative or affiliate thereof solely in furtherance of its interests as
an investor in the Company, and the Purchaser or representative or affiliate
thereof shall (except as otherwise required by law to which the Purchaser or
representative or affiliate thereof may be subject) maintain the
confidentiality of all non-public information of the Company, provided that,
notwithstanding any other term of this Agreement to the contrary, (i) the
Company shall not be obligated to disclose any information, the disclosure of
which its Board of Directors or President believes in good faith could have a
material adverse effect on the Company or its stockholders, or both and (ii)
the Purchasers shall be entitled to disclose such non-public information (a) as
is reasonably necessary to enforce their rights under this Agreement, (b) on a
confidential basis to their attorneys and other professionals to the extent
reasonably necessary in connection with the Purchasers' investment in the
Company, and (c) to any prospective purchaser of the Series B Preferred, or any
affiliate or partner of a Purchaser, provided that such third party agrees to
be bound by the confidentiality provisions hereof, and such third party is not
a competitor of the Company. No Purchaser or representative, affiliate or
transferee thereof shall purchaser, sell or take any other action relating to
any capital stock or other securities issued by the Company if any such
purchase, sale or other action would be in violation of any federal or state
"▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇" or other securities laws.
7.6. Right of First Refusal. So long as there are any shares of
Series B Preferred outstanding, the Company hereby grants to the Purchasers as
a group the right of first refusal to purchase such amount of New Securities
(as defined in paragraph (a) below) that the Company may, from time to time,
propose to sell and issue that will enable the Purchasers, as a group, to
maintain their collective percentage equity interest in the Company. This
right of first refusal shall be subject to the following provisions:
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(a) "New Securities" shall mean any Common Stock, preferred
stock or other security which is convertible into or exchangeable for
shares of Common Stock of the Company or any option, warrant or other
right to acquire such security or Common Stock of the Company; provided,
however, that "New Securities" shall not include (i) Common Stock
issuable upon conversion of or with respect to Series B Preferred or
upon conversion of any other convertible security of the Company
(including the Series A Preferred) that is outstanding from time to
time, (ii) securities issued upon the exercise of any warrants or
options issued or granted by the Company that are referred to in or
contemplated by SECTION 3.2 OR SECTION 8.3 of this Agreement, (iii)
securities offered to the public in an underwritten offering pursuant to
a registration statement filed under the Securities Act, (iv) securities
issued by the Company as consideration for an acquisition of a portion
or all of the equity or other interests in another corporation,
partnership, business entity or line of business of another business
entity by the Company by merger, reorganization, stock-for-equity or
stock-for-assets exchange or any other similar transaction and (v) any
option issued pursuant to a plan as permitted by and subject to SECTION
8.3 below.
(b) If the Company proposes to issue New Securities, it shall
give each Purchaser written notice (the "Rights Notice") of its
intention, describing the New Securities, the price, and the general
terms upon which the Company proposes to issue them. Each Purchaser
shall have fifteen (15) days from the date of mailing of the Rights
Notice to agree to purchase (i) all or any part of its Pro-Rata Share
(as defined in subsection (e) below) of such New Securities and (ii) all
or any part of the Pro-Rata Share of such New Securities of all other
Purchasers to the extent that such other Purchasers do not elect to
purchase their respective full Pro-Rata Share, in each case for the
price and upon the general terms specified in the Rights Notice by
giving written notice to the Company setting forth the quantity of New
Securities it elects to purchase. If the Purchasers who elect to
purchase their full Pro-Rata Share also elect to purchase all or a
portion of the Pro-Rata Share of such New Securities of other Purchasers
who do not elect to purchase 100% of their respective Pro-Rata Share
(such other Purchasers referred to as "Non-Participating Purchasers"),
then such Purchasers shall be entitled to purchase, in addition to their
Pro-Rata Share, a percentage of the Pro-Rata Shares of the Non-
Participating Purchasers determined by the fraction the numerator of
which is the number of shares of Common Stock then held, together with
the number of shares of Common stock issuable upon conversion of the
Series B Preferred then held, by such Purchaser as of the date of the
Rights Notice, and the denominator of which is the sum of the number of
shares of Common Stock then held, plus the number of shares of Common
Stock issuable upon the conversion of Series B Preferred then held, by
all Purchasers electing to purchase more than their Pro-Rata Share.
Each Purchaser who agrees to purchase New Securities shall deliver the
purchase price for the New Securities and otherwise comply with the
general terms of sale set forth in the Rights Notice on the thirtieth
(30th) day after the date of mailing of the Rights Notice (or such other
date as agreed to by the Company and such Purchaser) and the Company
shall deliver duly registered share certificates for the New Securities
in exchange therefor.
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(c) If the Purchasers fail to exercise in full the right of
first refusal within the period or periods specified in paragraph (b)
hereof, the Company shall have ninety (90) days after the date of
mailing of the Rights Notice to sell the unsold New Securities and the
balance of the New Securities not subject to the Right of First Refusal
provided for herein at a price and upon general terms no more favorable
to the purchasers thereof than specified in the Rights Notice. If the
Company has not sold the New Securities within said ninety (90) day
period the Company shall not thereafter issue or sell any New Securities
without first offering such securities to the Purchasers in the manner
provided above.
(d) A purchaser's "Pro-Rata Share" shall be the percentage
determined by a fraction the numerator of which is the number of shares
of Common Stock then held, together with the number of shares of Common
Stock issuable upon conversion of the Series B Preferred then held, by
such Purchaser as of the date of the Rights Notice (as defined in
paragraph (b) above) and the denominator of which is the sum of the
total number of shares of Common Stock then outstanding, together with
the number of shares of Common Stock issuable upon conversion of
convertible securities of the Company then outstanding, all as of such
date.
7.7. Restrictions on Transfer. Each Purchaser (and each transferee,
successor or assign of a Purchaser) further agrees that (a) it will not offer,
sell or otherwise dispose of the Series B Preferred (of the Common Stock in to
which the Series B Preferred may be converted), unless such offer, sale or
other disposition is effected in accordance with the terms of this Agreement
and the Registration Rights Agreement and such offer, sale or other disposition
is (i) registered under the Securities Act and applicable state securities
laws, (ii) pursuant to Rule 144 of the Securities Act of 1933, or (iii) in
compliance with an opinion of counsel to such Purchaser delivered to the
Company and reasonably acceptable to the Company and its counsel to the effect
that such offer, sale or other disposition thereof does not violate the
Securities Act or applicable state securities laws, and (b) the certificate(s)
representing the Series B Preferred (and any Common Stock into which the Series
B Preferred maybe converted) shall bear legends in substantially the following
form:
THE TRANSFER AND VOTING OF THESE SHARES IS SUBJECT TO THE TERMS
OF A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT DATED AS OF
SEPTEMBER 29, 1995, A PREFERRED STOCKHOLDERS' SALES AGREEMENT
DATED AS OF SEPTEMBER 29, 1995 AND A STOCKHOLDERS' AGREEMENT
DATED AS OF SEPTEMBER 29, 1995, COPIES OF WHICH ARE AVAILABLE FOR
INSPECTION AT THE OFFICES OF THE COMPANY.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
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TRANSFERRED, UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND SUCH APPLICABLE STATE LAW OR, IN THE OPINION OF
COUNSEL REASONABLY ACCEPTABLE TO THE ISSUER OF THESE SECURITIES,
SUCH OFFER, SALE OR TRANSFER, DOES NOT VIOLATE THE PROVISIONS
THEREOF OR UNLESS SOLD PURSUANT TO RULE 144 OF THE SECURITIES ACT
OF 1933.
Upon request of a Purchaser or other person who in accordance with the
provisions of this SECTION 7.7 becomes a holder of Series B Preferred (or the
Common Stock into which the Series B Preferred has been converted), the Company
shall remove the legend set forth in the second paragraph above from the
certificates evidencing such Series B Preferred or Common Stock or issue to
such holder new certificates evidencing such Series B Preferred or Common Stock
free of such legend, if such request is accompanied by an opinion of counsel,
reasonably satisfactory to the Company and its counsel, to the effect that such
Series B Preferred or Common Stock, as applicable, is not required by the
Securities Act or other applicable law to continue to bear the legend or a
legend similar thereto.
7.8. Transfer Instructions. Each Purchaser agrees that the Company
may provide for appropriate transfer instructions to implement the provisions
of SECTION 7.7 hereof.
7.9. Operation of Business. For so long as any shares of Series B
Preferred remain outstanding, the Company shall comply with each of the
following covenants, and will cause each Subsidiary, if and when such
Subsidiary exists, to comply with each of the following covenants, as if they
applied to it in the same manner as they apply to the Company.
(a) Compliance with Laws, Etc. The Company shall comply with
all laws, rules, regulations, judgments, orders and decrees of any
governmental or regulatory authority, the violation of which could have
a material adverse effect on the business, assets or properties of the
Company and with all material contracts and agreements to which it is a
party or shall become a party and shall perform all material obligations
which it has or shall incur.
(b) Preservation of Corporate Existence and Property. The
Company shall preserve, protect and maintain: (i) its corporate
existence and good standing in its jurisdiction of incorporation, (ii)
its rights, franchises and privileges, and (iii) all of its properties
necessary or useful in the proper conduct of its business in good
working order and condition, with the exception of (x) ordinary wear and
tear, and (y) casualty losses covered by insurance, allowing for
reasonable deductibles. The Company will not enter into a new field of
business without the approval of the directors elected to the Company's
Board of Directors by the Series B Preferred, if any.
(c) Insurance. The Company shall maintain or cause to be
maintained, with financially sound and reputable insurers, insurance
with respect to the properties and business of the Company, against loss
or damage of the kinds customarily insured against
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by corporations of established reputation and similar size engaged in
the same or similar business, in adequate amounts.
(d) Payment of Indebtedness. The Company shall pay or cause to
be paid the principal of, and the interest and premium, if any, on all
indebtedness heretofore or hereafter incurred or assumed by the Company
when and as the same shall become due and payable, unless such
indebtedness shall be renewed or extended, in which case such payments
shall be made in accordance with the terms of such renewal or extension.
(e) Transactions with Affiliates. Without the consent of the
directors elected by the holders of Series B Preferred, the Company will
not enter into any agreements or transactions with any Affiliate of the
Company any member of their families, or any corporation or other entity
in which any one or more of such persons holds, directly or indirectly,
five percent (5%) or more of any class of capital stock, on terms less
favorable to the Company than could be obtained by the Company in an
arm's-length transaction with a person who was not an affiliate of the
Company.
(f) Further Assurance. The Company shall cooperate with the
Purchasers and shall execute and deliver all such further instruments
and documents and do all such further acts and things as the Company may
be reasonably requested to do from time to time by any of the Purchasers
in order to satisfy the conditions and carry out the provisions and
purposes of this Agreement, the Registration Rights Agreement and the
Stockholders Agreement.
(g) Section 305. The Company shall not enter into any
transaction which would result in a dividend on a Purchaser's shares
under Section 305 of the Code (or any successor provision) other than
dividends accruing pursuant to the Certificate of Incorporation, as
amended from time to time.
(h) U.S. Real Property Holding Corporation. The Company will
not be a "United States real property holding corporation", as defined
in Section 897(c)(2) of the Code and Section 1.897-2(b) of the
Regulations promulgated by the Internal Revenue Service and upon written
request, will provide to any holder of Preferred Stock a statement to
the effect informing such holder whether its interest in the Company
constitutes a U.S. real property interest.
7.10. Reservation of Common Stock. For so long as any shares of Series
B Preferred remain outstanding, the Company shall increase the authorized
amount and maintain in reserve that number of shares of Common Stock necessary
to accommodate the conversation into Common Stock of all issued and outstanding
shares of Series B Preferred.
7.11. Public Announcements. The Company shall not make any public
announcement or disclosure relating to any Purchaser's participation in the
transactions contemplated by this Agreement or the relationship established
hereby with any Purchaser unless such announcement or disclosure is (i) in the
judgment of the Company after consultation with its legal counsel,
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required by applicable law or regulation or (ii) approved by the Purchaser,
which approval shall not be unreasonably withheld.
7.12. Maintenance of Key Person Life Insurance. Within sixty (60) days
after the Closing, to the extent obtainable on reasonable economic terms, the
Company will obtain and thereafter maintain, with a financially sound and
reputable insurance company or association, term life insurance on the life of
▇▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and the life of ▇▇▇▇▇▇▇ ▇▇▇▇, in the amount of at least
$1,000,000, which proceeds shall be payable to the order of the Company. The
Company will not cause or permit any assignment of the proceeds of said policy,
and will not borrow against such policy. The Company will add the Purchasers
as notice parties to such policy, and will request that the insurer of such
policy provide each Purchaser with twenty (20) days' notice before such policy
is terminated (for failure to pay premiums or otherwise) or assigned, or before
any change is made in the designation of the beneficiary thereof.
7.13. New Developments. Subject to the other contractual obligations
of such consultants, the Company will cause all technological developments,
patentable or unpatentable inventions, discoveries or improvements by its
officers, employees or consultants to be documented in accordance with
appropriate professional standards, cause all officers, employees and
consultants to execute appropriate patent and copyright assignment agreements
to the Company, as the case may be, and, where possible and appropriate, cause
all officers, employees and consultants to file and execute United States and
foreign patent or copyright applications relating to and protecting such
developments on behalf of the Company. The Company will cause each officer,
key employee and key consultant now or hereafter employed to execute and
deliver an Employee Provisions Agreement in the form and substance of Exhibit
3.12 attached hereto, or as otherwise approved by the Board of Directors of the
Company.
7.14. Indemnification. The Company shall at all times maintain
provisions in its Certificate of Incorporation or By-laws indemnifying all
directors against liability and providing for the advancement of expenses to
the maximum extent permitted under the laws of the jurisdiction of its
incorporation.
7.15. Rule 144A Information. The Company covenants and agrees that, at
all times during which the Company is neither subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, nor exempt from
reporting pursuant to Rule 12g3-2(b) under the Exchange Act, it will provide in
written form (as promptly as practicable and in any event within fifteen (15)
business days), upon the written request of any holder of Series B Preferred or
a prospective buyer of such shares or the Conversion Shares, all information
required by Rule 144A(d)(4)(i) of the General Regulations promulgated by the
Commission under the Securities Act ("Rule 144A Information"). The Company
further covenants, upon written request, to cooperate with and assist any
holder of Series B Preferred or any member of the National Association of
Securities Dealers, Inc. system for Private Offerings Resales and Trading
through Automated Linkage ("PORTAL") in applying to designate and thereafter
maintain the eligibility of such shares or the Conversion Shares for trading
through PORTAL. The Company's obligations under this SECTION 7.15 shall at all
times be contingent upon the relevant holder of Series B Preferred obtaining
from a prospective purchaser an agreement to take all reasonable
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precautions to safeguard the Rule 144A Information from disclosure to anyone
other than a Person who will assist such purchaser in evaluating the purchase
of such securities.
7.16. Compliance with Material Agreements. The Company shall provide
notice to the Company's Board of Directors of any material breach by the
Company of any Material Agreement.
7.17. Meetings of Directors: Expenses of Directors. The Company shall
hold meetings of the Company's Board of Directors (any of which may be
conducted as telephonic meetings in accordance with the Delaware General
Corporation Law) not less frequently than six (6) times during each calendar
year. The Company shall promptly reimburse each director of the Company for
all reasonable out-of-pocket expenses incurred in attending each meeting of the
Board of Directors of the Company or any committee thereof.
7.18. Notice to Board of Directors. The Company shall provide notice
within a reasonable period of time to each of its directors of (i) any material
adverse change in the Company's business, assets, properties, management,
operation or financial condition, (ii) all actions, writs and proceedings
before any court or governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign affecting the Company or its assets of
which the Company has knowledge, which if resolved adversely, could result in a
material adverse effect on the Company's business.
7.19. Nomination of Directors. The Company shall cause the nomination
as directors of any individuals designated by the Venture Capital Stockholders
(as that term is defined in the Stockholders' Agreement) as directors pursuant
to the Stockholders' Agreement and shall not solicit proxies for any other
nominees for election as directors elected by the Holders of the Series B
Preferred.
7.20. Founders' Sales Agreement. Except as otherwise prohibited by
law, the Company agrees that it shall not permit any transfer of shares of
capital stock in violation of the Founders' Sales Agreement.
7.21. Preferred Stockholders' Sales Agreement. Except as otherwise
prohibited by law, the Company agrees that it shall not permit any transfer of
shares of capital stock in violation of the Preferred Stockholders' Sales
Agreement.
7.22. Certain Actions. As soon as reasonably practicable after the
Closing, the Company will use its best efforts to ensure that (i) one of the
Designees (as that term is defined in the Stockholders' Agreement) is appointed
to the Audit Committee of the Company's Board of Directors (the "Board"), (ii)
one of the Designees is appointed to the Relationships Committee of the Board,
(iii) ▇▇▇▇ ▇▇▇▇▇▇ and A. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇. are appointed to the Compensation
Committee of the Board, (iv) on or before February 29, 1996 the number of
directors on the Board is reduced to ten (10), (v) effective as of June 30,
1996 the number of directors on the Board is reduced to nine (9), and (vi) the
Company cooperates with the Board and the Designees to select by September 15,
1996 an individual with experience in the Company's business to serve as a
director of the Company.
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8. Additional Covenants of the Company.
8.1. Conduct of Business in the Ordinary Course. From the date of
this Agreement until the Closing, except with the prior approval of each
Purchaser, the Company will operate the business of the Company in the ordinary
course.
8.2. Reasonable Efforts. From the date of this Agreement until the
Closing, the Company shall use all reasonable efforts to obtain all necessary
consents and take all actions necessary for the consummation of the
transactions contemplated hereby.
8.3. Stock Option Plans. From the date of this Agreement until the
first date on which shares of Series B Preferred cease to be outstanding, the
Company shall be permitted to increase from time to time the number of shares
issuable to employees, advisors, officers, directors and consultants of, and
other persons performing services for, the Company in connection with their
advisory or other relationship with the Company only pursuant to plans approved
by Company's Board of Directors, provided that without the written consent of
Purchasers representing at least 50% of the Series B Preferred, the Company
shall not permit the total number of shares issuable pursuant to such plans to
exceed 15% of the number of shares of Common Stock and Common Stock Equivalents
that are outstanding at the time of a grant, subject in any event to the
provisions of the Certificate of Incorporation. For purposes to this SECTION
8.3, "Common Stock Equivalent" shall mean (i) Common Stock issuable upon
conversion of the Series A Preferred, the Series B Preferred, and any other
convertible security that may be outstanding from time to time, and (ii) Common
Stock issuable upon exercise of warrants to acquire Common Stock to be issued
to Vector Securities International, Inc. upon the consummation of the
transactions contemplated hereby.
9. Termination of Agreement and Survival of Representations,
Warranties and Covenants.
(a) Termination. This Agreement may be terminated prior to
Closing by the Company with respect to some or all of the Purchasers and
by a Purchaser with respect to itself upon written notice to the other
parties:
(i) At any time by mutual written agreement of all
the parties hereto;
(ii) At any time after September 30, 1995, by any
party if the Closing shall not have occurred on or prior
to such date;
(iii) By the Company if any representation or
warranty of a Purchaser contained in this Agreement or in
any certificate or other document executed and delivered
by a Purchaser to the Company pursuant to this Agreement
is or becomes untrue or breached in any material respect
or if a Purchaser fails to comply in any material respect
with any covenant or agreement contained
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herein, and any such misrepresentation, breach or
noncompliance is not cured, waived, or eliminated before
Closing;
(iv) By a Purchaser if any representation or
warranty of the Company contained in this Agreement or in
any certificate or other document executed and delivered
by the Company pursuant to this Agreement is or becomes
untrue or breached in any material respect or if the
Company fails to comply in any material respect with any
covenant or agreement contained herein, and any such
misrepresentation, breach or noncompliance is not cured,
waived, or eliminated before Closing;
(v) On the Closing Date by a Purchaser if the
conditions set forth in SECTION 5 have not been satisfied;
or
(vi) On the Closing Date by the Company if the
conditions stated in SECTION 6 have not been satisfied.
In the event this Agreement is terminated pursuant to
subparagraph (iii) or (iv) above, the Purchasers and the Company shall
be entitled to pursue, exercise and enforce any and all remedies,
rights, powers and privileges available at law or in equity and under
this Agreement.
(b) Survival of Representations, Warranties and Covenants.
Except as otherwise provided in this Agreement, all covenants made
hereunder or pursuant hereto or in connection with the transactions
contemplated hereby shall survive the Closing and shall continue in full
force and effect thereafter. Any representation or warranty the breach
or inaccuracy of which involves fraud on the part of the Company or a
Purchaser shall survive the Closing and shall continue in full force and
effect thereafter. All other representations and warranties, as
certified to by the Company pursuant to the certificate required to be
delivered under SECTION 5.4 and by the Purchasers pursuant to SECTION
6.1 of this Agreement, made hereunder or pursuant hereto or in
connection with the transactions contemplated hereby shall survive the
Closing until the expiration of the applicable statute of limitations
and notice of any claim based on a breach of any such representation or
warranty must be given prior to the expiration of such statute of
limitations.
10. Indemnification. The Company shall indemnify and hold
harmless each Purchaser against and from any losses, claims, damages or
liabilities, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (A) the falsity or
incorrectness as of the Closing Date of any representation or warranty of the
Company contained in or made pursuant to SECTION 3 hereof, or (B) the existence
of any condition, event or fact constituting, or which with notice or passage
of time, or both, would constitute a default in the observance of any of the
Company's undertakings or covenants hereunder or under any of the documents
executed in connection herewith. The Company shall also pay all reasonable
attorney's fees and costs and court costs incurred by the Purchasers in
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enforcing the indemnification provided for in this SECTION 10 (provided,
however, that where more than one Purchaser is requesting the indemnification
provided for in this SECTION 10, the Company shall only be obligated to
attorney's fees of one counsel to represent all such Purchasers).
11. Notices. All notices, requests, consents and other
communications provided for herein (except as stated in the last sentence of
this SECTION 11) shall be in writing, and shall be mailed by certified mail,
postage prepaid, delivered by Federal Express or similar overnight courier, or
personally delivered, as follows:
(a) If to the Company:
Ilex Oncology, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Love
with a copy to:
▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
(b) If to the Purchasers to the persons and addresses set
forth on Exhibit A
or such other addresses as each of the parties hereto may provide from time to
time in writing to the other parties. For purposes of computing the time
periods set forth in SECTION 7, the date of mailing shall be deemed to be the
delivery date. The financial statements and other reports required by SECTION
7 may be mailed by first-class regular mail.
12. Modifications: Waiver. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated (i) prior to
the Closing Date unless effected by a writing executed and delivered by the
parties hereto and (ii) after the Closing Date unless effected by a writing
executed and delivered by the Company and by holders representing not less than
66-2/3% of the aggregate number of issued and outstanding shares of Series B
Preferred and shares of Common Stock issued upon the conversion of Series B
Preferred, provided that this SECTION 12 may not be modified or amended without
the written consent of all the holders of Series B Preferred and the Company,
and provided further that in any event, no amendment or change may be made to
the terms hereof that imposes additional obligations or restrictions upon a
party without its written consent.
13. Entire Agreement. This Agreement, including the Schedules
and Exhibits hereto, including the Registration Rights Agreement, contain the
entire agreements between the parties with respect to the transactions
contemplated hereby, and supersedes all negotiations,
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agreements, representations, warranties, commitments, whether in writing or
oral, prior to the date hereof, including but not limited to the Convertible
Preferred Stock Purchase Agreement dated as of August 1 6, 1995 between Upjohn
and the Company (the "Prior Agreement").
14. Application to Successor Holders. The rights of each
Purchaser set forth in SECTIONS 7.1, 7.3 AND 7.6 shall inure to the benefit of
any person who becomes a holder of Series B Preferred sold pursuant to this
Agreement (or of Common Stock issued upon conversion of such Series B
Preferred) in a transfer made in accordance with the provisions of SECTION 7.7
(a "Permitted Holder") hereof as though such holder were a Purchaser, and the
obligations of each Purchaser set forth in SECTION 7.5 shall be binding on any
person who after the date hereof becomes a holder of shares of Series B
Preferred sold pursuant to this Agreement as though such holder were a
Purchaser.
15. Execution and Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original, and such counterparts together shall
constitute one instrument.
16. Governing Law and Severability. This Agreement shall be
governed by the laws of the State of Texas as applied to agreements entered
into and to be performed entirely within the State of Texas. In the event any
provision of this Agreement or the application of such provision to any party
shall be held by a court of competent jurisdiction to be contrary to law, the
remaining provisions of this Agreement shall remain in full force and effect.
17. Headings. The descriptive headings of the Sections hereof
and the Schedules and Exhibits hereto are inserted for convenience only, and do
not constitute a part of this Agreement.
18. Waivers and Consents. Any waiver or consent hereunder
shall be effective only in the specific instance and for the purpose for which
it was given, and shall not constitute a continuing waiver or consent.
Notwithstanding this Agreement, any term or condition hereof, or the
consummation of the transactions contemplated hereby, no Purchaser waives or
relinquishes any right it may have or may acquire against the Company or any of
its Affiliates or agents in connection with this acquisition of Series B
Preferred by such Purchaser, or the ownership thereof. All such rights shall
remain unimpaired by the execution of this Agreement and the consummation of
the transactions contemplated hereby.
19. Severability. In the event that any court of competent
jurisdiction shall determine that any provision, or any portion thereof,
contained in this Agreement shall be unenforceable in any respect, then such
provision shall be deemed limited to the extent that such court deems it
enforceable, and as so limited shall remain in full force and effect. In the
event that such court shall deem any such provision, or portion thereof, wholly
unenforceable, the remaining provisions of this Agreement shall nevertheless
remain in full force and effect.
20. No Waiver Of Rights, Powers and Remedies. Except as
expressly provided in this Agreement, no failure or delay by a party hereto in
exercising any right, power or remedy under this Agreement, and no course of
dealing between the parties hereto, shall
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operate as a waiver of any such right, power or remedy of the party. No single
or partial exercise of any right, power or remedy under this Agreement by a
party hereto, nor any abandonment or discontinuance of steps to enforce any
such right, power or remedy, shall preclude such party from any other or
further exercise thereof or the exercise of any other right, power or remedy
hereunder. The election of any remedy by a party hereto shall not constitute a
waiver of the right of such party to pursue other available remedies. No
notice to or demand on a party not expressly required under this Agreement
shall entitle the party receiving such notice or demand to any other or further
notice or demand in similar or other circumstances or constitute a waiver of
the rights of the party giving such notice or demand to any other or further
action in any circumstances without such notice or demand.
21. Reliance. The parties hereto agree that, notwithstanding
any access to information by any party or any right of a party to this
Agreement to investigate the affairs of any other party to this Agreement, the
party having such access and right to investigate shall have the right to rely
fully upon the representations and warranties of the other party expressly
contained in this Agreement and on the accuracy of any Schedule, Exhibit or
other document attached hereto or referred to herein or delivered by such other
party or pursuant to this Agreement. Each of the Purchasers acknowledges that,
based on information provided by the Company, it has made its own analysis and
decisions regarding the transactions contemplated hereby and that it is not
relying on any of the other Purchasers in executing this Agreement or
consummating the transactions contemplated hereby.
22. Costs, Expenses and Taxes. As a condition precedent to
the Closing, the Company agrees to pay at the Closing, the reasonable legal
fees, and other expenses of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo,
P.C., special counsel for Cross Atlantic Partners K/S, Advent International
Corporation and Boston Capital Ventures, not to exceed $30,000 (unless any
increase thereto is agreed to in writing by the Company). In addition, the
Company shall pay any and all stamp, or other similar taxes payable or
determined to be payable in connection with the execution and delivery of this
Agreement, the issuance of the Series B Preferred and the other instruments and
documents to be delivered hereunder or thereunder, and agrees to save the
Purchasers harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes. Other than
as set forth above, each of the parties hereto shall bear such party's own
costs and expenses in connection with this Agreement and the transactions
contemplated hereby.
23. Definitions. The following terms shall have the
respective meanings set forth below whenever used in this Agreement:
"Affiliate" has the meaning ascribed to that term in Rule 12b-2 under
the Exchange Act, or any successor rule and in any event with respect to
the Company, shall mean any Director, officer or stockholder thereof.
"Knowledge" or "known" shall mean or refer to the actual knowledge of
the Company, its officers, directors and key employees after reasonable
diligence.
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"Subsidiary" or "Subsidiaries" shall mean any corporation, partnership,
trust or other entity of which the Company and/or any of its other
Subsidiaries directly or indirectly owns at the time a majority of the
outstanding shares of any class of equity security of such corporation,
partnership, trust or other entity.
24. Rescission and Termination of Prior Agreement. In
connection, and as a condition to the consummation of the transactions
contemplated hereby, upon execution of this Agreement by the Company and each
of the Purchasers, the Company and Upjohn hereby terminate and rescind the
Prior Agreement, and agree that the Prior Agreement shall be null and void.
[This space intentionally left blank.]
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