1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 1)
Under the Securities Exchange Act of 1934
ALEXION PHARMACEUTICALS, INC.
-----------------------------
(Name of Issuer)
SERIES B CONVERTIBLE PREFERRED STOCK
------------------------------------
(Title of Class of Securities)
NONE
----
(CUSIP Number)
DR. ANDREAS BREMER
GRAFENAUWEG 4, 6301 ZUG CH/SWITZERLAND
011-41-41-724-5959
------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copy to:
Daniel L. Goelzer, Esq.
Baker & McKenzie
815 Connecticut Avenue, N.W.
Washington, D.C. 20006
SEPTEMBER 8, 1997
-----------------
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Check the following box if a fee is being paid with the statement [ ].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 4 Pages
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CUSIP No. None
- ---------
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Name of Reporting Persons
S.S. or I.R.S. Identification No. of Above Persons
BB Biotech AG
Biotech Target, S.A.
- -----------------------------------------------------------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) [ ]
of a Group* (b) [x]
- -----------------------------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- -----------------------------------------------------------------------------------------------------------------------------------
(4) Source of Funds
AF, WC
- -----------------------------------------------------------------------------------------------------------------------------------
(5) Check Box If Disclosure of Legal Proceedings Is Required Pursuant To Items 2(d) or 2(e) [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
BB Biotech AG -- Switzerland
Biotech Target, S.A. -- Panama
- -----------------------------------------------------------------------------------------------------------------------------------
Number of Shares (7) Sole Voting Power
Beneficially Owned 0 by Biotech AG
---------------
by Each Reporting
Person With (8) Shared Voting Power
400,000 by Biotech Target S.A.
------------------------------
(See Item 5)
------------
(9) Sole Dispositive Power
0 by Biotech AG
---------------
(10) Shared Dispositive Power
400,000 by Biotech Target S.A.
------------------------------
(See Item 5)
-------------
- -----------------------------------------------------------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
400,000 shares of Series B Preferred Convertible Stock
(See Item 5)
- -----------------------------------------------------------------------------------------------------------------------------------
(12) Check Box if the Aggregate Amount in Row (9)
Excludes Certain Shares* [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (9)
100%
- -----------------------------------------------------------------------------------------------------------------------------------
(12) Type of Reporting Person*
BB Biotech AG -- HC, CO
Biotech Target, S.A. -- CO
Page 2 of 4 Pages
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SCHEDULE 13D
This Amendment No. 1 reflects the addition of the Series B Preferred
Stock Purchase Agreement as an exhibit to the Schedule 13D which was filed on
September 18, 1997 (the "Schedule 13D"). No other material changes have
occurred with respect to information which was contained in the Schedule 13D.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1: Translation of minutes of the October 18, 1995, Board of
Directors Meeting of Biotech Target (evidencing a power of
attorney in favor of Dr. Andreas Bremer).
Exhibit 2: Translation of minutes of the January 3, 1997 meeting of the
Board of Directors Meeting of Biotech Target (evidencing a
power of attorney in favor of Dr. Anders Hove).
Exhibit 3: Translation of evidence of a power of attorney in favor of
Victor Bischoff and Hans-Joerg Graf on behalf of BB Biotech.*
Exhibit 4: Agreement by and between BB Biotech and Biotech Target with
respect to the filing of this disclosure statement.
Exhibit 5: Series B Preferred Stock Purchase Agreement dated September 4,
1997.
- ----------------
* See power of attorney, attached as an exhibit 99.E to the Schedule 13D
relating to Biogen, Inc. filed with the Securities and Exchange Commission on
June 2, 1994, which exhibit is incorporated by reference herein.
Page 3 of 4 Pages
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
BB BIOTECH AG
Date: September 19, 1997 By: /s/ HANS-JOERG GRAF
--- ------------------------
Name: Hans-Joerg Graf
Date: September 19, 1997 By: /s/ DR. VICTOR BISCHOFF
--- ------------------------
Name: Dr. Victor Bischoff
BIOTECH TARGET, S.A.
Date: September 19, 1997 By: /s/ DR. ANDREAS BREMER
--- ------------------------
Name: Dr. Andreas Bremer
Date: September 19, 1997 By: /s/ DR. ANDERS HOVE
--- ------------------------
Name: Dr. Anders Hove
Page 4 of 4 Pages
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APPENDIX A TO ITEM 2
PRESENT
NAME AND POSITION RESIDENCE OR PRINCIPAL
WITH COMPANY BUSINESS ADDRESS OCCUPATION
- ------------ ---------------- ----------
BB BIOTECH
Dr. Ernst Thomke Vordergasse 3, Vice-
(Swiss citizen) 8200 Schaffhausen, Chairman
CH/Switzerland and Director
Dr. Victor Bischoff Vordergasse 3, Vice-
(Swiss citizen) 8200 Schaffhausen, Chairman
CH/Switzerland and Director
Dr. David Baltimore Rockefeller University Professor
(U.S. citizen) 1239 York Avenue and Director
New York, NY 19921
BIOTECH TARGET
Dr. Andreas Bremer Grafenauweg 4, signatory
(German citizen) 6301 Zug authority
CH/Switzerland
Dr. Anders Hove Grafenauweg 4, signatory
(Danish citizen) 6301 Zug authority
CH/Switzerland
Hans-Joerg Graf Grafenauweg 4, signatory
(Swiss citizen) 6301 Zug authority
CH/Switzerland
Pablo Javier Espino Swiss Bank Tower, President
(Panamanian citizen) Panama 1, and Director
Republic of Panama
Adelina M. de Estribi Swiss Bank Tower, Director
(Panamanian citizen) Panama 1,
Republic of Panama
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CERTIFICADO:---- Yo, Adelina M. de Estribi, Secretaria de la sociedad BIOTECH
TARGET S.A., certifico que lo anterior es copia autentica de su original.
- ---------- (Fdo.) Adelina M. de Estribi Secretaria.---
- --------------------------------- -MINUTES OF A MEETING OF THE BOARD OF
DIRECTORS OF THE CORPORATION BIOTECH TARGET S.A.----In the City of Panama,
Republic of Panama, on October 18, 1995, a Meeting of the Board of Directors of
BIOTECH TARGET S.A., was held in the principal offices of said corporation at
53rd Street, Urbanizacion Obarrio, Torre Swiss Bank, 16th floor, Panama,
Republic of Panama, wherein a quorum was at all time present and active.--- All
of the Directors of the corporation, PABLO JAVIER ESPINO, AIDA MAY BIGGS and
ADELINA M. DE ESTRIBI, were present at the Meeting, therefore the notice of the
meeting was waived.-- The President of the Corporation PABLO JAVIER ESPINO
presided the Meeting, and the Secretary of the Corporation ADELINA M. DE ESTRIBI
served as Secretary.-- The President then called the Meeting to order and
explained its objects: to grant power of attorney to persons chosen by the Board
of Directors to act on behalf of the corporation with such authority as the
Board may approve, there upon, after an exchange of views on motion duly made
and seconded the following resolutions were unanimously approved:-- RESOLVED:
That be and hereby is granted a Power of Attorney as full as it may be legally
necessary in favor of DANIEL BUGMANN, born the 10.10.1966, at Wiesenstrasse 10,
8008 Zurich, Switzerland; ANDREAS BREMER, born the 1.7.1961, at Schaedruetirain
8, 6006 Lucerna, Switzerland; NICOLAS MERIAN, born the 18.1.1961, at Rennweg 10,
8001 Zurich, Switzerland, to act on behalf of the Corporation, jointly by two,
with full powers, which for purposes of enunciation and not in order to limit
this Power of Attorney, are detailed as follows: - to purchase, alienate,
transfer, sell, lease, pledge, mortgage, encumber, or dispose of in any way or
manner, the movable or immovable, corporeal or incorporeal, property of the
corporation; to accept, endorse, collect, deposit and transfer checks, tes and
any other negotiable instruments in its name; to open and to close any kind of
banking account, to draw from accounts and the banking deposits of the
corporation, be they checking accounts, time
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deposits or against overdraft or any other kind of deposits, be it in the
Republic of Panama or abroad. To issue notes, sign, bills of exchange as a
drawer, acceptor, endorser or guarantor; accept obligations, be they of a
commercial or civil nature; to represent the corporation in matters of
disposition and administration as well as in all affairs of management and
situations in which the corporation has an interest, also in general
partnerships or joint ventures; to buy stock or shares of any kind in other
companies; to take part in Assemblies or meetings in order to make any kind of
agreements, including agreements of constitution, transformation, increase of
capital and dissolution of companies, to become the legal representative of the
company, as plaintiff, defendant, third party or in any other form, in front of
any office of the Republic of Panama or abroad, be they judicial,
administrative, concerning labor, or of any other nature, to substitute this
power in whole or partially and to revoke the substitutions, to subscribe
documents wherein the corporation may be involved; as debtor or creditor; to
make agreements using arbitrators or any other type of arrangement whatsoever
and to complete any act or to enter into any contract that may be considered
beneficial to the interests of the company BIOTECH TARGET S.A., because it is
the intention of this Power of Attorney that it be exercised without any
limitations whatsoever. It is hereby expressed that this Power of Attorney can
be exercised inside the territory of the Republic of Panama or in any other
country.--- It was also resolved to give authority to the law firm MORGAN Y
MORGAN to protocolize a copy of the minutes of this meeting of the Board of
Directors.---------------Having nothing else to discuss, the meeting was
adjourned.----------------(sgd.) Pablo J. Espino- President-------- Adelina M.
de Estribi- Secretary.---CERTIFICATE:- I, ADELINA M. DE ESTRIBI, Secretary of
the corporation BIOTECH TARGET S.A., certify that the foregoing is a genuine
copy of its original.-----(sgd.) Adelina M. de Estribi-
Secretary.----------Concuerda con su original esta copia que expido, firmo y
sello en la Ciudad de Panama, a los dieciocho (18) dias del mes de octubre de
mil novecientos noventa y cinco (1995)
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TARGET S.A. certifico que lo anterior es copia autentica de su original.
- ------(Fdo.) Adeline M. de Estribi-Secretaria.------------------- MINUTES OF A
MEETING OF THE BOARD OF DIRECTORS OF THE CORPORATION BIOTECH TARGET S.A. -----
In the City of Panama, Republic of Panama, on January 3, 1997, a Meeting of the
Board of Directors of BIOTECH TARGET S.A. was held in the principal offices of
said corporation at 53rd Street Urbanizaicion Obarrio, Torre Swiss Bank, 16th
floor, Panama, Republic of Panama, wherein a quorum was at all time present and
active.------ All of the Directors of the corporation, PABLO JAVIER ESPINO, AIDA
MAY BIGGS and ADELINA M. DE ESTRIBI, were present at the Meeting, therefore
notice of the meeting was waived.-- The President of the Corporation PABLO
JAVIER ESPINO presided the Meeting, and the Secretary of the Corporation ADELINA
M. DE ESTRIBI served as Secretary.--- The President then called the Meeting to
order and explained its objects: to grant a Power of Attorney to a person chosen
by the Board of Directors to act on behalf of the corporation with such
authority as the Board may approve. There upon, after an exchange of views on
motion duly made and seconded the following resolutions were unanimously
approved: -- RESOLVED: That be and hereby is granted a Power of Attorney as full
as it may be legally necessary in favor of Dr. ANDERS HOVE, Danish, born on
October 31, 1965, to act on behalf of the Corporation, jointly by two, with
Messrs. HANS JOERG GRAF, DANIEL BUGMANN, ANDREAS BREMER and NICOLAS MERIAM, with
full powers, which for purposes of enunciation and not in order to limit this
Power of Attorney, are detailed as follows: to purchase, alienate, transfer,
sell, lease, pledge, mortgage, encumber, or dispose of in any way or manner, the
movable or immovable, corporeal or incorporeal property of the corporation; to
accept, endorse, collect, deposit and transfer checks, notes and any other
negotiable instruments in its name; to open and to close any kind of bank
account, to draw from accounts and the bank deposits of the corporation, be they
checking accounts, time deposits overdraft, or any other kind of deposits, be
they in the Republic of Panama or abroad. To issue notes, sign bill of exchange
as a drawer, acceptor, endorser or guarantor; accept obligations, be they of a
commercial or civil nature; to represent the corporation in matters of
disposition and administration as well as in all affairs of management and
situations in which the corporation has an interest, also in general
partnerships or joint ventures; to buy stock or shares of any kind in other
companies; to take part in Assemblies or meetings in order to make any kind of
agreements, including agreements of constitution, transformation, increase of
capital and dissolution of companies, to become the legal representative of the
company, as plaintiff, defendant, third party or in any other form, before any
office of the Republic of Panama or abroad, be they judicial, administrative,
concerning labor, or of any other nature, to substitute this power in whole or
in part and to revoke the substitutions; to subscribe documents wherein the
corporation may be involved as debtor or creditor; to make agreements using
arbitrators or any other type of arrangement whatsoever and to complete any act
or to enter into any contract that may be considered beneficial to the interests
of the company BIOTECH TARGET S.A. because it is the intention of this Power of
Attorney that it be exercised without any limitations whatsoever. - It is hereby
expressed that this Power of Attorney can be exercised in the territory of the
Republic of Panama or in any other country.---- It was also resolved to give
authority to the Law firm MORGAN Y MORGAN to protocolize a copy of the minutes
of this meeting of the Board of Directors.---------------- Having nothing else
to discuss, the meeting was adjourned.------------ (sgd.) Pablo J. Espino-
President - Adelina H. de Estribi- Secretary.------------- CERTIFICATE:- I,
ADELINA M. DE ESTRIBI, Secretary of the corporation BIOTECH TARGET S.A. certify
that the foregoing is a genuine copy of its original.--------(sgd.) Adelina M.
de Estribi- Secretary.-------------- Concuerda con su original esta copia que
expido, firmo y sello en la Ciudad de Panama. Republica de Panama, a los
veinticuatro (24) dias del mes de abril de mil novecientos noventa y siete
(1997).
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JOINT FILING AGREEMENT
We, the undersigned, hereby express our agreement that the attached
Schedule 13D (including all amendments thereto) is filed on behalf of each of
the undersigned.
Date: September 19, 1997
---
BB BIOTECH AG
By: /s/ HANS-JOERG GRAF
------------------------
Name: Hans-Joerg Graf
By: /s/ DR. VICTOR BISCHOFF
------------------------
Name: Dr. Victor Bischoff
BIOTECH TARGET, S.A.
By: /s/ DR. ANDREAS BREMER
------------------------
Name: Dr. Andreas Bremer
By: /s/ DR. ANDERS HOVE
------------------------
Name: Dr. Anders Hove
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SERIES B PREFERRED STOCK PURCHASE AGREEMENT
Alexion Pharmaceuticals, Inc.
25 Science Park
New Haven, CT 06511
Ladies & Gentlemen:
The undersigned, Biotech Target S.A. (the "Investor"), hereby confirms
its agreement with you as follows:
1. This Series B Preferred Stock Purchase Agreement (the
"Agreement") is made as of September 4, 1997 between Alexion Pharmaceuticals,
Inc., a Delaware corporation (the "Company"), and the Investor.
2. The Company has authorized the sale and issuance of up to 400,000
shares of Series B Convertible Preferred Stock, par value $.0001 per share (the
"Series B Preferred Stock").
3. The Company and the Investor agree that the Investor will
purchase and the Company will sell, for a purchase price of $25.00 per share of
Series B Preferred Stock, or an aggregate purchase price of $10,000,000.00, the
Series B Preferred Stock, and upon such purchase and sale, the Company will
issue the Series B Preferred Stock, pursuant to the Terms and Conditions for
Purchase of Series B Preferred Stock attached hereto as Annex I and incorporated
herein by reference as if fully set forth herein (any reference to the
"Agreement" in Annex I shall mean this signature page and Annex I hereto,
collectively). Unless otherwise requested by the Investor, certificates
representing the Series B Preferred Stock will be registered in the Investor's
name and address as set forth below.
4. The Investor represents that, except as set forth below, (a) it
has had no position, office or other material relationship within the past three
years with the Company or its affiliates, (b) neither it, nor any group of which
it is a member or to which it is related, beneficially owns (including the right
to acquire or vote) any securities of the Company and (c) it has no direct or
indirect affiliation or association with any NASD member. Exceptions:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(If no exceptions, write "none." If left blank,
response will be deemed to be "none.")
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Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space below for that purpose.
INVESTOR
Biotech Target SA
----------------------------------------------
/s/ HANS-JOERG GRAF
Name: /s/ ANDREAS BREMER
-----------------------------------------
By: Hans-Joerg Graf/Andreas Bremer
-------------------------------------------
Title:
----------------------------------------
Address: Vordergasse 3, 8200 Schaffhausen,
--------------------------------------
CH/Switzerland
----------------------------------------------
Tax ID No.:
-----------------------------------
Contact name: Andreas Bremer
---------------------------------
Telephone:011 41 41 724-5930
------------------------------------
Name in which the Series B Preferred Stock
should be registered (if different):
----------
AGREED AND ACCEPTED:
- -----------------------------
ALEXION PHARMACEUTICALS, INC.
/s/ LEONARD BELL, M.D.
- ---------------------------------------------
By: Leonard Bell, M.D.
Title: President and Chief Executive Officer
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ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF SERIES B PREFERRED STOCK
1. Authorization and Sale of the Series B Preferred Stock. Subject
to the terms and conditions of this Agreement, the Company has authorized the
sale of up to 400,000 shares of its Series B Preferred Stock, $.0001 par value
(the "Series B Preferred Stock"), having the designations, powers, preferences
and rights described in the Certificate of the Designations, Powers, Preferences
and Rights of the Series B Preferred Stock (the "Certificate of Designations")
attached hereto as Exhibit A. The shares of Series B Preferred Stock, shares of
Common Stock, $.0001 par value (the "Common Stock") issuable upon the conversion
of the Series B Preferred Stock (the "Conversion Shares") and the Common Stock
issuable as a dividend upon the Series B Preferred Stock, if any, (the "Dividend
Shares") are sometimes collectively referred to herein as the "Securities."
2. Agreement to Sell and Purchase the Series B Preferred Stock. At
the Closing (as defined in Section 3), the Company will sell to the Investor,
and the Investor will purchase from the Company, upon the terms and conditions
hereinafter set forth, 400,000 shares of Series B Preferred Stock at the
purchase price set forth on the signature page hereto.
3. Delivery of the Series B Preferred Stock at Closing. The
completion of the purchase and sale of the Series B Preferred Stock (the
"Closing") shall occur on September 5, 1997 (the "Closing Date"). At the
Closing, the Company shall deliver to the Investor one or more stock
certificates representing the shares of Series B Preferred Stock to be purchased
by the Investor hereunder, each such certificate to be registered in the name of
the Investor or, if so indicated on the signature page hereto, in the name of a
nominee designated by the Investor.
The Company's obligation to close the transaction shall be subject to
the following conditions, any one or more of which may be waived by the Company:
(a) receipt by the Company of a certified or official bank check or wire
transfer of funds in the full amount of the purchase price for the shares of
Series B Preferred Stock being purchased hereunder; and (b) the accuracy of the
representations and warranties made by the Investor and the fulfillment of those
undertakings of the Investor to be fulfilled prior to the Closing.
The Investor's obligation to close the transaction shall be subject to:
(a) the receipt of the shares of Series B Preferred Stock; and (b) the accuracy
of the representations and warranties made by the Company and the fulfillment of
those undertakings of the Company to be fulfilled prior to the Closing.
4. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to, and covenants with, the Investor as
follows:
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4.1. Organization. The Company is duly organized and validly existing
in good standing under the laws of the State of Delaware. The Company has full
power and authority to own, operate and occupy its properties and conduct its
business as presently conducted and as described in its Annual Report on Form
10-K for the year ended July 31, 1996 (the "10-K") and the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended October 31, 1996, the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 1997, as
amended by Form 10-Q/A, filed March 17, 1997, and Form 10-Q/A2, filed June 19,
1997, the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
April 30, 1997, the Company's Current Report on Form 8-K, dated February 28,
1997, the Company's Current Report on Form 8-K, dated June 17, 1997, the
Company's Current Report on Form 8-K dated July 9, 1997 and Registration
Statement on Form 8-A dated February 21, 1997, the foregoing filings constitute
all documents filed by the Company since the date of the 10- K with the
Securities and Exchange Commission (the "SEC") under the Securities Exchange Act
of 1934, as amended (all such documents are hereinafter referred to as the "1934
Act Filings"), and is registered or qualified to do business and in good
standing in each jurisdiction in which it owns or leases property or transacts
business and where the failure to be so qualified would have a material adverse
effect upon the business, financial condition, properties or operations of the
Company. The Company has no subsidiaries.
4.2. Due Authorization. The Company has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement,
and this Agreement has been duly authorized and validly executed and delivered
by the Company and constitutes the legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its terms, except as
rights to indemnity and contribution may be limited by state or federal
securities laws or the public policy underlying such laws, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
4.3. Non-Contravention. The execution and delivery of the Agreement,
the issuance and sale of the shares of Series B Preferred Stock to be sold by
the Company hereunder, the fulfillment of the terms of the Agreement and the
terms of the Certificate of Designations the shares of Series B Preferred Stock
and the consummation of the transactions contemplated hereby and thereby will
not conflict with or constitute a violation of, or default (with the passage of
time or otherwise) under, any material agreement or instrument to which the
Company is a party or by which it is bound or the charter, by-laws or other
organizational documents of the Company nor result in the creation or imposition
of any lien, encumbrance, claim, security interest or restriction whatsoever
upon any of the material properties or assets of the Company or an acceleration
of indebtedness pursuant to any obligation, agreement or condition contained in
any material bond, debenture, note or any other evidence of indebtedness or any
material indenture, mortgage, deed of trust or any other agreement or instrument
to which the Company is a party or by which it is bound
-2-
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or to which any of the property or assets of the Company is subject, nor
conflict with, or result in a violation of, any law, administrative regulation,
ordinance, order, judgment or decree of any court or governmental agency,
arbitration panel or authority applicable to the Company. No consent, approval,
authorization or other order of, or registration, qualification or filing with,
any regulatory body, administrative agency, or other governmental body in the
United States is required for the valid issuance and sale of the Securities,
other than such as have been made or obtained before the date of this Agreement
and which, in the case of the Conversion Shares and the Dividend Shares, are not
required to be made until after the issuance of such shares, and other than a
Form D which will be filed under the Securities Act of 1933, as amended, after
the Closing Date, and other than Nasdaq listing which has been applied for and
will be obtained.
4.4. Capitalization. The capitalization of the Company as of July 31,
1996 is as set forth in the 10-K. The Company has not issued any capital stock
since that date other than as contemplated by or described in the 1934 Act
Filings, including the issuance in June 1997 of 1,450,000 shares of Common Stock
in a private placement transaction. At September 4, 1997 the Company had
outstanding 8,865,468 shares of Common Stock, holds in treasury 11,875 shares of
Common Stock and has outstanding options and warrants to purchase 1,471,484 and
926,669 shares of Common Stock, respectively. The shares of Series B Preferred
Stock to be sold pursuant to the Agreement have been, subject to the filing of
the Certificate of Designations with the Secretary of State of Delaware, duly
authorized, and upon Closing, will be validly issued, fully paid and
nonassessable. The Conversion Shares and, upon resolution by the Board of
Directors of the Company to pay the dividend on the shares of Series B Preferred
Stock in the form of Common Stock, the Dividend Shares, if any, issuable in
accordance with the Series B Preferred Stock have been, or will be, as the case
may be, duly authorized, and when issued in accordance with the terms of the
Series B Preferred Stock, will be validly issued, fully paid and nonassessable.
All outstanding shares of capital stock of the Company have been duly and
validly issued and are fully paid and nonassessable. Except as set forth above
there are no outstanding rights (including, without limitation, preemptive
rights), warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in the
Company, or any contract, commitment, agreement, understanding or arrangement of
any kind relating to the issuance of any capital stock of the Company, any such
convertible or exchangeable securities or any such rights, warrants or options,
except for the rights granted to the holders of Common Stock pursuant to the
Rights Agreement, dated February 14, 1997, by and between the Company and
Continental Stock Transfer & Trust Company.
4.5. Legal Proceedings. There is no material legal or governmental
proceeding pending or, to the knowledge of the Company, threatened or
contemplated to which the Company is or may be a party or of which the business
or property of the Company is or may be subject that is not disclosed in the
1934 Act Filings, and to the Company's knowledge no basis exists for any (i)
legal proceeding by or against the Company or (ii) governmental proceeding or
investigation of the Company.
-3-
6
4.6. No Violations. The Company is not in violation of its charter,
bylaws, or other organizational document, in violation of any law,
administrative regulation, ordinance, order, judgment or decree of any court or
governmental agency, arbitration panel or authority applicable to the Company,
except for any violations which, individually or in the aggregate, would have a
material adverse effect on the business or financial condition of the Company.
The Company is not in default in any material respect in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness in any indenture, mortgage, deed of trust or any
other agreement or instrument to which the Company is a party or by which the
Company is bound or by which the properties of the Company are bound or
affected, and there exists no condition which, with the passage of time or
otherwise, would constitute a material default under any such document or
instrument or result in the imposition of any material penalty or the
acceleration of any material indebtedness.
4.7. Governmental Permits, Etc. The Company has all necessary
franchises, licenses, permits, certificates and other authorizations from any
foreign, federal, state or local government or governmental agency, department,
or body that are currently necessary for the operation of the business of the
Company as currently conducted and as described in the 1934 Act Filings, the
absence of which would have a material adverse effect on the Company.
4.8. Intellectual Property. Except as described in the 1934 Act
Filings, the Company owns or possesses sufficient rights to use all material
patents, patent rights, trademarks, copyrights, licenses, inventions, trade
secrets and know-how described or referred to in the 1934 Act Filings as owned
or used by it or that are necessary for the conduct of its business as now
conducted or as described in the 1934 Act Filings. Except as described in the
1934 Act Filings, the Company has not received any notice of, and has no
knowledge of or reason to believe that, any infringement of or conflict with any
right of others with respect to any patent, patent right, trademark, copyright,
invention, trade secret or know-how that, individually or in the aggregate would
have a material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company. Except as
described in 1934 Act Filings, the Company has not entered into or become party
to any development, work for hire, license or other agreement pursuant to which
they have secured the right or obligation to use, or granted others the right or
obligation to use, any trademarks, servicemarks, trade names, copyrights,
patents or any other intellectual property right. All proprietary technical
information developed by or belonging to the Company which has not been patented
has been kept confidential.
4.9. Financial Statements. The financial statements of the Company
and the related notes contained in the 1934 Act Filings present fairly, subject
to customary year end adjustments in the case of the quarterly statements, the
financial position of the Company as of the dates indicated, and the results of
its operations and cash flows for the periods therein specified and the assets
and liabilities of the Company have not changed significantly since the date of
the most recent 1934 Act Filing except for changes in the ordinary course of
business or resulting from the Company's private
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placement of Common Stock during June 1997. Such financial statements (including
the related notes) have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
therein specified, except as disclosed in the 1934 Act Filings. The other
financial information contained in the 1934 Act Filings has been prepared on a
basis consistent with the financial statements of the Company.
4.10. No Material Adverse Change. Subsequent to the respective dates
as of which information is given in the 1934 Act Filings, and except as
contemplated or described in the 1934 Act Filings, the Company has not incurred
any material liabilities or obligations, direct or contingent, other than in the
ordinary course of business, and there has not been any material adverse change
in its condition (financial or other), results of operations, business,
prospects, key personnel or capitalization.
4.11. Additional Information. The Company has filed in a timely manner
all documents that the Company was required to file under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") since the Company's
initial public offering. The 1934 Act Filings complied in all material respects
with the SEC's requirements as of their respective filing dates, and the
information contained therein as of the respective dates thereof did not contain
any untrue statement of material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading.
4.12. Listing. The Company shall comply with all requirements of the
National Association of Securities Dealers, Inc. with respect to the issuance of
the Securities and the listing of the Conversion Shares and Dividend Shares, if
any, on the Nasdaq National Market.
4.13. Maintenance of Capital Surplus. The Company shall maintain
sufficient capital surplus (as such term is described in Section 154 of the
Delaware General Corporation Law) in order to satisfy its dividend obligations
with respect to the Series B Preferred Stock in accordance with Section 170 of
the Delaware General Corporation Law. In addition, the Corporation will take
whatever actions are necessary in order to satisfy its obligation to pay the
dividends referenced in the Certificate of Designations.
4.14. Operation of the Business. Except as described in the 1934 Act
Filings, the Company owns and retains all such assets, tangible or intangible,
contractual, license and leasehold rights necessary for it (i) to operate its
business as described in the 1934 Act Filings, and (ii) to utilize the assets
and contractual, license and leasehold rights in the same manner as they were
utilized at the Closing Date, except where the failure to own, retain or utilize
such assets or rights will not have a material adverse effect upon the business
or financial condition of the Company.
4.15. Environmental Matters. The Company is in compliance in all
respects with all applicable local, state and federal safety and environmental
laws, rules, orders and regulations ("Environmental Laws") under the
jurisdiction of the USDA, BATF, USNRC and CTDEP and any other federal or state
agency with applicable programs
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relating to biosafety, chemical hygiene, radiation safety, blood borne
pathogens, hazard communication, hazardous waste management and chemical,
medical and radiation waste disposal, except where the failure to comply with
the Environmental Laws will not have a material adverse effect upon the business
or financial condition of the Company.
4.16. Reliance. The Company acknowledges that the Investor has
reviewed and relied upon the 1934 Act Filings in making its decision to purchase
the shares of Series B Preferred Stock.
5. Representations, Warranties and Covenants of the Investor.
(a) The Investor represents and warrants to, and covenants with, the
Company that: (i) the Investor is an "accredited investor" as defined in
Regulation D under the Securities Act of 1933, as amended (the "Securities Act")
and the Investor is also knowledgeable, sophisticated and experienced in making,
and is qualified to make decisions with respect to investments in securities
presenting an investment decision like that involved in the purchase of the
Securities, including investments in securities issued by the Company and
investments in comparable companies, and has requested, received, reviewed and
considered all information it deemed relevant in making an informed decision to
purchase the Securities; (ii) the Investor is acquiring the shares of Series B
Preferred Stock set forth on the signature page hereto in the ordinary course of
its business and for its own account for investment only and with no present
intention of distributing any of the Securities or any arrangement or
understanding with any other persons regarding the distribution of such
Securities; (iii) the Investor will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the Securities except in
compliance with the Securities Act, applicable state securities laws and the
respective rules and regulations promulgated thereunder; (iv) the Investor has
answered all questions on the signature page hereto for use in preparation for
the Registration Statement (referred to below) and the answers thereto are true
and correct to the best of the Investors knowledge as of the Closing Date; and
(v) the Investor will notify the Company immediately of any change in any of
such information until such time as the Investor has sold all of its Securities
or until the Company is no longer required to keep the Registration Statement
effective.
(b) The Investor acknowledges that no action has been or will be
taken in any jurisdiction outside the United States by the Company that would
permit an offering of the Securities, or possession or distribution of offering
materials in connection with the issue of the Securities, in any jurisdiction
outside the United States where action for that purpose is required. The
Investor will comply with all applicable laws and regulations in each foreign
jurisdiction in which it purchases, offers, sells or delivers Securities or has
in its possession or distributes any offering material, in all cases at its own
expense.
(c) The Investor hereby covenants with the Company not to make any
sale of the Securities without complying with the provisions of this Agreement,
including
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Section 7.2 hereof, and without effectively causing the prospectus delivery
requirement under the Securities Act to be satisfied. The Investor acknowledges
that there may occasionally be times when the Company, based on the reasonable
advice of its counsel, determines that it must suspend the use of the prospectus
forming a part of the Registration Statement until such time as an amendment to
the Registration Statement has been filed by the Company and declared effective
by the SEC or until the Company has amended or supplemented such prospectus.
(d) The Investor further represents and warrants to the Company that
(i) the Investor has full right, power, authority and capacity to enter into
this Agreement and to consummate the transactions contemplated hereby and has
taken all necessary action to authorize the execution, delivery and performance
of this Agreement, and (ii) upon the execution and delivery of this Agreement,
this Agreement shall constitute a valid and binding obligation of the Investor
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as the indemnification agreements of the Investors
herein may be legally unenforceable.
(e) The Investor will not (unless pursuant to an applicable exemption
under the Securities Act) sell, offer to sell, solicit offers to buy, dispose
of, loan, pledge or grant any right with respect to the shares of Series B
Preferred Stock and, will not, prior to the effectiveness of the Registration
Statement, sell, offer to sell, solicit offers to buy, dispose of, loan, pledge
or grant any right with respect to (collectively, a "Disposition"), the
Conversion Shares or the Dividend Shares, if any, nor will the Investor engage
in any hedging or other transaction which is designed to or could reasonably be
expected to lead to or result in a Disposition of Common Stock of the Company by
the Investor or any other person or entity. Such prohibited hedging or other
transactions would include without limitation effecting any short sale or having
in effect any short position (whether or not such sale or position is against
the box and regardless of when such position was entered into) or any purchase,
sale or grant of any right (including without limitation any put or call option)
with respect to the Common stock of the Company or with respect to any security
(other than a broad-based market basket or index) that includes, relates to or
derives any significant part of its value from the Common Stock of the Company,
but such security shall not include the capital stock or debt of the Investor,
its parent companies or their respective subsidiaries.
(f) The Investor understands that nothing in this Agreement or any
other materials presented to the Investor in connection with the purchase and
sale of the Securities constitutes legal, tax or investment advice. The Investor
has consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection of Securities.
6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants,
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agreements, representations and warranties made by the Company and the Investor
herein shall survive the execution of this Agreement, the delivery to the
Investor of the shares of Series B Preferred Stock being purchased and the
payment therefor, including, without limitation, those contained in Section 7.3
hereof.
7. Registration of the Conversion Shares and the Dividend Shares;
Compliance with the Securities Act.
7.1. Registration Procedures and Expenses. The Company shall:
(a) subject to receipt of necessary information from the Investor to
prepare and file with the Commission, within seventy-five (75) days of the
Closing Date, a Registration Statement on Form S-3 (the "Registration
Statement") to enable the sale of the Conversion Shares and the Dividend Shares,
if any, by the Investor from time to time through the automated quotation system
of the Nasdaq National Market or in privately-negotiated transactions;
(b) use its best efforts, subject to receipt of necessary information
from the Investor, to cause the Registration Statement to become effective
within 90 days after the Registration Statement is filed by the Company;
(c) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to keep the Registration Statement effective until
the earlier of (i) the second anniversary of the Closing Date or (ii) such time
as all Conversion Shares and Dividend Shares have been sold pursuant to a
registration statement.
(d) furnish to the Investor with respect to the Conversion Shares and
Dividend Shares registered under the Registration Statement (and to each
underwriter, if any, of such shares of Common Stock) such number of copies of
prospectuses and preliminary prospectuses in conformity with the requirements of
the Securities Act and such other documents as the Investor may reasonably
request, in order to facilitate the sale or other disposition of all or any of
the Conversion Shares and Dividend Shares by the Investor, provided, however,
that the obligation of the Company to deliver copies of prospectuses or
preliminary prospectuses to the Investor shall be subject to the receipt by the
Company of reasonable assurances from the Investor that the Investor will comply
with the applicable provisions of the Securities Act and of such other
securities or blue sky laws as may be applicable in connection with any use of
such prospectuses or preliminary prospectuses;
(e) file documents required of the Company for blue sky clearance in
states specified in writing by the Investor; provided, however, that the Company
shall not be required to qualify to do business or consent to service of process
in any jurisdiction in which it is not now so qualified or has not so consented;
and
(f) bear all expenses in connection with the procedures in paragraph
(a) through (e) of this Section 7.1 and the registration of the Conversion
Shares and
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Dividend Shares pursuant to the Registration Statement, other than fees and
expenses, if any, of counsel or other advisers to the Investor.
The Company understands that the Investor disclaims being an
underwriter, but the Investor being deemed an underwriter shall not relieve the
Company of any obligations it has hereunder.
7.2. Transfer of Conversion Shares and Dividend Shares After
Registration.
(a) The Investor agrees that it will not effect any disposition of
the Conversion Shares or the Dividend Shares that would constitute a sale within
the meaning of the Securities Act except as contemplated in the Registration
Statement referred to in Section 7.1 or Section 5(e) and described below, and
that it will promptly notify the Company of any changes in the information set
forth in the Registration Statement regarding the Investor or in the "Plan of
Distribution" section of the Registration Statement.
(b) The Investor agrees that to sell the Conversion Shares or
Dividend Shares pursuant to the Registration Statement or pursuant to an
applicable exemption under the Securities Act:
(i) The Investor must notify the Company three (3) business days
prior to sale through the Company's counsel, Fulbright & Jaworski L.L.P., at the
address provided in Section 10(b) hereto, of its intent to sell, so as to
confirm that no event has occurred or is expected to occur which would make the
Registration Statement false or misleading, and to ensure that the Registration
Statement in its possession is current and has not been suspended. The Company
may refuse to permit the Investor to resell pursuant to the Registration
Statement, provided that it must notify the Investor within three (3) business
days that such a sale would violate federal securities laws unless the
Registration Statement is updated. In such an event, the Company shall use its
best efforts to amend the Registration Statement if necessary and take all other
actions necessary to allow such sale under the federal securities laws within 10
business days of Investor's initial notification, and shall notify the Investor
promptly after it has determined that such sale has become permissible under the
federal securities laws. Notwithstanding the foregoing, within any twelve (12)
month period the Company shall not, except upon advice of counsel as to the
necessity pursuant to federal securities laws, exercise its right to refuse to
permit resale of any Conversion Shares or Dividend Shares pursuant to the
Registration Statement (i) more than three (3) times or (ii) for an aggregate
period in excess of forty-five (45) days. The Investor hereby covenants and
agrees that it will not sell any Conversion Shares or Dividend Shares pursuant
to the Registration Statement during the periods the Registration Statement is
withdrawn as set forth in this Section.
(ii) If the Company or its counsel does not, within such three
business days, notify the Investor that it is exercising its right to delay such
sale, the Investor may proceed with such sale provided that it arranges for
delivery of a current prospectus to the transferee.
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(iii) The Investor must also deliver to the Company's counsel a Notice
of Sale substantially in the form attached hereto as Exhibit B, so that the
Conversion Shares and Dividend Shares may be properly transferred.
7.3. Indemnification. For the purpose 7.3:
(i) the term "Selling Stockholder" shall include the Investor and any
affiliate of such Investor;
(ii) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 7.1;
(iii) the term "untrue statement" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(a) The Company agrees to indemnify and hold harmless each Selling
Stockholder from and against any losses, claims, damages or liabilities to which
such Selling Stockholder may become subject (under the Securities Act or
otherwise) insofar as such Losses (as used herein the term "Losses" means any
and all claims, demands, costs, losses, damages and liabilities, net of
insurance proceeds, and includes reasonable attorney's fees and costs incurred
in the investigation and defense of a claim, demand, cost, loss or liability),
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon a breach by the Company of its representations,
warranties, covenants or obligations in this Agreement or any untrue statement
of a material fact contained in the Registration Statement on the effective date
thereof, or arise out of any failure by the Company to fulfill any undertaking
included in the Registration Statement and the Company will reimburse such
Selling Stockholder for any reasonable legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any such action,
proceeding or claim, or preparing to defend any such action, proceeding or
claim, provided, however, that the Company shall not be liable in any such case
to the extent that such loss, claim, damage or liability arises out of, or is
based upon, an untrue statement made in such Registration Statement in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of such Selling Stockholder specifically for use in preparation of the
Registration Statement or the failure of such Selling Stockholder to comply with
the covenants and agreements contained in Sections 5(c) or 7.2 hereof respecting
sale of the Stock or any statement or omission in any Prospectus that is
corrected in any subsequent Prospectus that was delivered to the Investor within
a reasonable time prior to the pertinent sale or sales by the Selling
Stockholder to inform the buyer of such change.
(b) Each Selling Stockholder agrees to indemnify and hold harmless
the Company (and each person, if any, who controls the Company within the
meaning of
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Section 15 of the Securities Act, each officer of the Company who signs the
Registration Statement and each director of the Company) from and against any
Losses, claims, damages or liabilities to which the Company (or any such
officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such Losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, any failure to comply with the covenants and agreements contained in
Section 5(c) or 7.2 hereof respecting sale of the Conversion Shares or Dividend
Shares, or any untrue statement of a material fact contained in the Registration
Statement on the effective date thereof if such untrue statement was made in
reliance upon and in conformity with written information furnished by or on
behalf of the Selling Stockholder specifically for use in preparation of the
Registration Statement, and the Selling Stockholder will reimburse the Company
(or such officer, director or controlling person), as the case may be, for any
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim; provided, however,
that (i) the obligations of the Selling Stockholder hereunder shall be limited
to an amount equal to the aggregate public offering price of the registered
stock of such Selling Stockholder sold as contemplated herein, unless such
liability arises out of or is based upon willful misconduct by the Selling
Stockholder and (ii) the indemnity for untrue statements or omissions described
above, and the reimbursement obligation relating thereto, shall not apply if the
Selling Stockholder provides the Company with additional written information a
reasonable time prior to the effectiveness of the Registration Statement as is
required to make the previously supplied written information true and complete,
together with a description in reasonable detail of the information previously
supplied which was untrue or complete.
(c) Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.3, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall be entitled to participate
therein, and, to the extent it shall wish, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified person. After notice from
the indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof, provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel for all indemnified parties.
(d) If the indemnification provided for in this Section 7.3 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in
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respect of any losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as result of
such losses, claims, damages or liabilities (or actions in respect thereof) in
such proportion as is appropriate to reflect the relative fault of the Company
on the one hand and the Investor on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Investor on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Investor
agree that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), the Investor
shall not be required to contribute any amount in excess of the amount by which
the net amount received by the Investor from the sale of the Stock to which such
loss the amount of any damages which the Investor has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
7.4. Termination of Conditions and Obligations. The conditions
precedent imposed by Section 5 or this Section 7 upon the transferability of the
Conversion Shares and Dividend Shares shall cease and terminate as to any
particular number of the shares of Common Stock when such shares of Common Stock
shall have been effectively registered under the Securities Act and sold or
otherwise disposed of in accordance with the intended method of disposition set
forth in the Registration Statement covering such Conversion Shares and Dividend
Shares or at such time as an opinion of counsel reasonably satisfactory to the
Company shall have been rendered to the effect that such conditions are not
necessary in order to comply with the Securities Act at such time for such sale
or at such time for all future sales at the Investor's option.
7.5. Information Available. So long as the Registration Statement is
effective covering the resale of Conversion Shares and Dividend Shares owned by
the Investor, the Company will furnish to the Investor:
(a) as soon as practicable after available one copy of (i) its Annual
Report to Stockholders (which Annual Report shall contain financial statements
audited in
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accordance with generally accepted accounting principles by a national firm of
certified public accountants), (ii) if not included in substance in the Annual
Report to Stockholders, its Annual Report on Form 10-K, (iii) if not included in
substance in its Quarterly Reports to Stockholders, its Quarterly Reports on
Form 10-Q, and (iv) a full copy of the particular Registration Statement
covering the Conversion Shares and Dividend Shares (the foregoing, in each case,
excluding exhibits);
(b) upon the reasonable request of the Investor, all exhibits
excluded by the parenthetical to subparagraph (a)(iv) of this Section 7.5 and
all other information that is made available to stockholders; and
(c) upon the reasonable request of the Investor, an adequate number
of copies of the prospectuses to supply to any other party requiring such
prospectuses; and the Company, upon the reasonable request of the Investor, will
meet with the Investor or a representative thereof at the Company's headquarters
to discuss all information relevant for disclosure in the Registration Statement
covering the Conversion Shares and Dividend Shares and will otherwise cooperate
with any Investor conducting an investigation for the purpose of reducing or
eliminating such Investor's exposure to liability under the Securities Act,
including the reasonable production of information at the Company's
headquarters; provided, that, the Company shall not be required to disclose any
confidential information to or meet at its headquarters with any Investor until
and unless the Investor shall have entered into a confidentiality agreement in
the form and substance reasonably satisfactory to the Company with the Company
with respect thereto.
8. Right of First Refusal. The Company hereby grants to the
Investor the right of first refusal to purchase a pro rata portion of Common
Stock, preferred stock, debt or notes convertible into Common Stock, or notes
sold together with warrants to purchase Common Stock (collectively, "New
Securities"), which the Company may, from time to time, propose to sell and
issue in private placements for cash. This right of first refusal shall be
subject to the following provisions:
(a) The right of first refusal granted herein shall not apply to New
Securities, (A) issued upon the exercise of the Company's outstanding options or
warrants, (B) issued pursuant to the acquisition of another corporation by the
Company by merger, purchase of substantially all the assets or other
reorganization, (C) issued by the Company in connection with the acquisition of
any patent or other rights to technology, including licenses, (D) issued to
employees, consultants, officers or directors of the Company pursuant to any
stock option plan or stock purchase or stock bonus arrangement approved by the
Board of Directors of the Company, (E) issued in connection with a corporate
collaboration, joint venture, partnership, or marketing, manufacturing, research
or other similar arrangement, or (F) issued pursuant to a public offering by the
Company.
(b) In the event the Company proposes to undertake an issuance of New
Securities in a private placement, it shall give each Investor written notice of
its intention describing the price and other material terms at which the Company
proposes
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to issue the same. Each Investor shall have three (3) days from the date of
receipt of any such notice to agree to purchase its pro rata portion of such
securities for the price specified in the notice by giving written notice to the
Company and stating therein the quantity of securities to be purchased. Any
Investor exercising its right of first refusal hereunder shall, unless the
Company otherwise consents, be required to purchase its entire pro rata portion
if any securities are to be purchased.
(c) In the event, and to the extent, that the Investors fail to
exercise the right of first refusal within said three (3) day period, the
Company shall have ninety (90) days thereafter to sell or enter into an
agreement (pursuant to which the sale of securities covered thereby shall be
closed, if at all, within ninety (90) days from the date of said agreement) to
sell the securities respecting which the right of first refusal was not
exercised, at a price and upon material terms no more favorable to the
purchasers thereof than specified in the Company's notice. In the event the
Company has not sold within said ninety (90) day period or entered into an
agreement to sell the securities within said ninety (90) day period (or sold and
issued securities in accordance with the foregoing within ninety (90) days from
the date of said agreement), the Company shall not thereafter issue or sell any
New Securities in a private placement for cash without first offering such
securities to the Investors in the manner provided above.
(d) For purposes of this Agreement, an Investor's "pro rata" portion
shall be the ratio of (A) the number of shares of Series B Preferred Stock held
by such Investor to (B) the total number of shares of Series B Preferred Stock
then outstanding.
(e) The rights to purchase securities of the Company pursuant to this
Agreement may not be assigned by the Investors and shall terminate upon the
conversion of the Series B Preferred Stock into Common Stock.
9. Fee. The Investor acknowledges that the Company intends to pay
to the a placement agent a fee in respect of the sale of the Securities to the
Investor.
10. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, and shall be deemed given when so mailed and shall be
delivered as addressed as follows:
(a) if to the Company, to:
Alexion Pharmaceuticals, Inc.
25 Science Park, Suite 360
New Haven, Connecticut
Attn: David W. Keiser or Barry Luke
Phone: 203-776-1790
Telecopy: 203-776-2089
(b) with a copy mailed to:
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Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, NY 10103
Attn: Lawrence A. Spector or Merrill M. Kraines
Phone: 212-318-3000
Telecopy: 212-752-5958
(c) if to the Investor, at its address on the signature page hereto,
or at such other address or addresses as may have been furnished
to the Company in writing.
(d) with a copy mailed to:
Baker & McKenzie
815 Connecticut Avenue, N.W.
Washington, D.C. 20006
Attn: Daniel Goelzer, Esq.
Phone: (202) 452-7000
Facsimile: (202) 452-7074
11. Changes. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the Investor.
12. Headings. The headings of the various section of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be part of this Agreement.
13. Severability. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
14. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware and the federal law of the
United States of America.
15. Choice of Forum; Venue; Service of Process. Any claim, suit,
action, or proceeding among any or all of the parties hereto relating to this
Agreement, to any document, instrument, or agreement delivered pursuant hereto,
referred to herein, or contemplated hereby, or in any other manner arising out
of or relating to the transactions contemplated by or referenced in this
Agreement, shall be commenced and maintained exclusively in the United States
District Court for the District of Delaware, or, if such Court lacks
jurisdiction over the subject matter, in a state court of competent
subject-matter jurisdiction sitting in the State of Delaware. The parties hereby
submit themselves unconditionally and irrevocably to the personal jurisdiction
of such courts. The parties further agree that venue shall be exclusively in
Delaware. The parties irrevocably waive any objection to such personal
jurisdiction or venue including,
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Delaware but not limited to, the objection that any suit, action, or proceeding
brought in the State of Delaware has been brought in an inconvenient forum. The
parties irrevocably agree that process issuing from such courts may be served on
them, either personally or by certified mail, return receipt requested, at the
addresses given Section 10 hereof; and further irrevocably waive any objection
to service of process made in such manner and at such addresses, including
without limitation any objection that service in such manner and at such
addresses is not authorized by the local or procedural laws of the State of
Delaware.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
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Exhibit B
Date:
----------------------
Lawrence Spector, Esq. or Merrill Kraines, Esq.
Fulbright & Jaworski L.L.P.
666 Fifth avenue
New York, NY 10103
Re: Alexion Pharmaceuticals, Inc.
INVESTOR'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, an officer of, or other person duly authorized by
[official name of shareholder]_______________________________________
("Shareholder") hereby certifies that Shareholder has sold [number]___________
shares of Alexion Pharmaceuticals, Inc. Common Stock on [date]________________
in accordance with registration statement number [fill in number or otherwise
identify registration statement]__________________ and the requirements of
delivering a current prospectus has been complied with in connection with such
sale.
Print or Type:
Name of Purchaser
(Individual or Institution):
---------------------------------
Name of Individual representing
Purchaser (if an Institution):
-------------------------------
Title of Individual representing
Purchaser (if an Institution):
-------------------------------
Signature by:
Individual Purchaser or
Individual representing Purchaser:
---------------------------
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