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EXHIBIT 10.34
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (this "AGREEMENT"), dated as
of October 16, 1996, between Southbrook International Investments, Ltd., a
corporation organized and existing under the laws of the British Virgin Islands
(the "PURCHASER"), and ImmunoGen, Inc., a corporation organized and existing
under the laws of Massachusetts (the "COMPANY").
WHEREAS, subject to the terms and conditions set forth in this Agreement,
the Company desires to issue and sell to the Purchaser and the Purchaser desires
to acquire shares of the Company's Series B Convertible Preferred Stock, par
value $.01 per share (the "SERIES B PREFERRED"), the Company's Series C
Convertible Preferred Stock, par value $.01 per share (the "SERIES C
PREFERRED"), the Company's Series D Convertible Preferred Stock, par value $.01
per share (the "SERIES D PREFERRED"), the Company's Series E Convertible
Preferred Stock, par value $.01 per share, (the "SERIES E PREFERRED") and the
Company's Series F Convertible Preferred Stock, par value $.01 per share (the
"SERIES F PREFERRED"), (the Series B Preferred, Series C Preferred, Series D
Preferred, Series E Preferred and Series F Preferred are collectively referred
to as the "PREFERRED STOCK").
IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and the Purchaser agree as follows:
ARTICLE I
PURCHASE AND SALE OF PREFERRED SHARES
1.1 PURCHASE AND SALE. (a) Subject to the terms and conditions set forth
herein, the Company shall issue and sell to the Purchaser, and the Purchaser
shall purchase (a) 3,000 shares of Series B Preferred (the "SERIES B SHARES");
(b) up to 3,000 shares of Series C Preferred (the "SERIES C SHARES"); (c) up to
3,000 shares of Series D Preferred (the "SERIES D SHARES"); (d) up to 3,000
shares of Series E Preferred (the "SERIES E SHARES"); and (e) up to 3,000 shares
of Series F Preferred (the "SERIES F SHARES"). The Series B Shares, Series C
Shares, Series D Shares, Series E Shares and Series F Shares are collectively
referred to as the "SHARES."
(b) The Series B Preferred shall have the respective rights,
preferences and privileges set forth in EXHIBIT A attached hereto (the "SERIES B
TERMS"), which shall be incorporated into a Certificate of Vote of Directors to
be approved by the Purchaser and filed by the Company with the Secretary of
State of Massachusetts (the "SERIES B VOTE CERTIFICATE"). The Series C
Preferred, Series D Preferred, Series E Preferred and Series F Preferred shall
have respective rights, preferences and privileges identical to the Series B
Terms as set forth in Exhibit A, mutatis mutandis, except that the Conversion
Price for conversion of said Shares shall reset as of the Original Issue Date
for such Shares. The Series C Shares, Series D Shares, Series E Shares and
Series F Shares shall be authorized pursuant to certificates of vote of
directors to be prepared by the Company, subject to the approval of the
Purchaser, and filed by the Company with the Secretary of State of
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Massachusetts (such certificates of vote of directors, together with the Series
B Vote Certificate, are referred to as the "VOTE CERTIFICATES").
For purposes of this Agreement, "CONVERSION PRICE," "ORIGINAL ISSUE DATE,"
"CONVERSION DATE" "TRADING DAY" and "PER SHARE MARKET VALUE" shall have the
meanings set forth in the Series B Terms; and "MARKET PRICE" as at any date
shall mean the average Per Share Market Value for the five (5) Trading Days
immediately preceding such date.
1.2 Purchase Price. The purchase price per Share shall be $1,000.
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1.3 The Closings.
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(a) THE SERIES B CLOSING. (i) The closing of the purchase and sale
of the Series B Shares (the "SERIES B CLOSING") shall take place at the offices
of Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP ("XXXXXXXX XXXXXXXXX"), 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, immediately following the
execution hereof or such later date as the parties shall agree, but not prior to
the date that the conditions set forth in Section 4.1 have been satisfied or
waived by the appropriate party. The date of the Series B Closing is hereinafter
referred to as the "SERIES B CLOSING DATE." At the Series B Closing, the Company
shall sell and issue to the Purchaser, and the Purchaser shall purchase, the
Series B Shares, for an aggregate purchase price of $3,000,000.
(ii) At the Series B Closing, (a) the Company shall deliver to
the Purchaser (1) one or more stock certificates representing the Series B
Shares and the Initial Warrant (as hereinafter defined), each registered in the
name of the Purchaser, and (2) all documents, instruments and writings required
to have been delivered at or prior to the Series B Closing by the Company
pursuant to this Agreement and the Registration Rights Agreement; and (b) the
Purchaser shall deliver to the Company (1) the purchase price for the Series B
Shares as set forth in Section 1.3(a), less the fees and disbursements of the
legal counsel contemplated in Section 6.1, in United States dollars in
immediately available funds by wire transfer to an account designated in writing
by the Company prior to the Series B Closing Date, and (2) all documents,
instruments and writings required to have been delivered at or prior to the
Series B Closing by the Purchaser pursuant to this Agreement and the
Registration Rights Agreement.
(b) THE SERIES C CLOSING. (i) The closing of the purchase and sale
of the Series C Shares (the "SERIES C CLOSING") shall take place at the offices
of Xxxxxxxx Xxxxxxxxx on such date (which may not be prior to the tenth day
after receipt of the notice described hereafter in this paragraph (b)) as the
Company may designate in a written notice to the Purchaser (a "SUBSEQUENT
FINANCING NOTICE") relating to the Series C Shares which the Company may deliver
no earlier than January 1, 1997 and no later than March 19, 1997, which
Subsequent Financing Notice shall set forth the number of Series C Shares (which
may not exceed 3,000) that the Company intends to sell to the Purchaser,
PROVIDED, HOWEVER, in no case shall the Series C Closing take place (A) earlier
than the later to occur of January 11, 1997 and the tenth day after receipt of
the Subsequent Financing Notice relating to such Closing or (B) later than March
30, 1997 (the "SERIES C CLOSING EXPIRATION DATE"), and, PROVIDED, FURTHER, that
in no case shall the Series C Closing take place unless and until the conditions
listed in Section 4.2 have been
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satisfied or waived by the appropriate party. The date of the Series C Closing
is hereinafter referred to as the "SERIES C CLOSING DATE."
(ii) At the Series C Closing, (a) the Company shall deliver to
the Purchaser (1) one or more stock certificates representing the Series C
Shares being sold at such Closing, registered in the name of the Purchaser, and
(2) all documents, instruments and writings required to have been delivered at
or prior to the Series C Closing by the Company pursuant to this Agreement and
the Registration Rights Agreement and (b) the Purchaser shall deliver to the
Company (1) the purchase price for the Series C Shares being purchased as
determined pursuant to this Article I in immediately available funds by wire
transfer to an account designated in writing by the Company prior to the Series
C Closing Date and (2) all documents, instruments and writings required to have
been delivered at or prior to the Series C Closing by the Purchaser pursuant to
this Agreement and the Registration Rights Agreement.
(c) THE SERIES D CLOSING. (i) The closing of the purchase and sale
of the Series D Shares (the "SERIES D CLOSING") shall take place at the offices
of Xxxxxxxx Xxxxxxxxx on such date (which may not be prior to the tenth day
after receipt of the Subsequent Financing Notice relating to the Series D
Shares) as the Company shall designate in the Subsequent Financing Notice
relating to the Series D Shares, which the Company may deliver no earlier than
April 1, 1997 and no later than June 20, 1997, which Subsequent Financing Notice
shall set forth the number of Series D Shares (which may not exceed 3,000) that
the Company intends to sell to the Purchaser, PROVIDED, HOWEVER, in no case
shall the Series D Closing take place (A) earlier than the later to occur of
April 11, 1997 and the tenth day after receipt of the Subsequent Financing
Notice relating to such Closing or (B) later than June 30, 1997 (the "SERIES D
CLOSING EXPIRATION DATE"), and, PROVIDED, FURTHER, that in no case shall the
Series D Closing take place unless and until the conditions listed in Section
4.2 have been satisfied or waived by the appropriate party. The date of the
Series D Closing is referred to as the "Series D Closing Date."
(ii) At the Series D Closing, (a) the Company shall deliver to
the Purchaser (1) one or more stock certificates representing the Series D
Shares being sold at such Closing, registered in the name of the Purchaser, and
(2) all documents, instruments and writings required to have been delivered at
or prior to the Series D Closing by the Company pursuant to this Agreement and
the Registration Rights Agreement, and (b) the Purchaser shall deliver to the
Company (1) the purchase price for the Series D Shares being purchased, as
determined pursuant to this Article I, in immediately available funds by wire
transfer to an account designated in writing by the Company prior to the Series
D Closing Date, and (2) all documents, instruments and writings required to have
been delivered at or prior to the Series D Closing by the Purchaser pursuant to
this Agreement and the Registration Rights Agreement.
(d) THE SERIES E CLOSING. (i) The closing of the purchase and sale
of the Series E Shares (the "SERIES E CLOSING") shall take place at the offices
of Xxxxxxxx Xxxxxxxxx on such date (which may not be prior to the tenth day
after receipt of the Subsequent Financing Notice relating to the Series E
Shares) as the Company shall designate in the Subsequent Financing Notice
relating to the Series E Shares, which the Company may deliver no earlier than
July 1, 1997 and no later than September 20, 1997, which Subsequent Financing
Notice shall set forth the number of Series E Shares (which may not exceed
3,000) that the Company intends to
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sell to the Purchaser, PROVIDED, HOWEVER, in no case shall the Series E Closing
take place (A) earlier than the later to occur of July 11, 1997 and the tenth
day after receipt of the Subsequent Financing Notice relating to such Closing or
(B) later than September 30, 1997 (the "SERIES E CLOSING EXPIRATION DATE"), and,
PROVIDED, FURTHER, that in no case shall the Series E Closing take place unless
and until the conditions listed in Section 4.2 have been satisfied or waived by
the appropriate party. The date of the Series E Closing is referred to as the
"SERIES E CLOSING DATE."
(ii) At the Series E Closing, (a) the Company shall deliver to
the Purchaser (1) one or more stock certificates representing the Series E
Shares being sold at such Closing, registered in the name of the Purchaser, and
(2) all documents, instruments and writings required to have been delivered at
or prior to the Series E Closing by the Company pursuant to this Agreement and
the Registration Rights Agreement, and (b) the Purchaser shall deliver to the
Company (1) the purchase price for the Series E Shares being purchased, as
determined pursuant to this Article I, in immediately available funds by wire
transfer to an account designated in writing by the Company prior to the Series
E Closing Date, and (2) all documents, instruments and writings required to have
been delivered at or prior to the Series E Closing by the Purchaser pursuant to
this Agreement and the Registration Rights Agreement.
(e) THE SERIES F CLOSING. (i) If the Company shall have either not
provided a Subsequent Financing Notice as to any one or more of the Series C
Shares, Series D Shares or Series E Shares or shall have provided Subsequent
Financing Notices relating to the Series C Shares, Series D Shares and Series E
Shares which, in the aggregate, provide for the sale to the Purchaser of less
than 9,000 Shares, the Company shall have the right to deliver a Subsequent
Financing Notice relating to the issue and sale to the Purchaser of the Series F
Shares, except that the Company shall not have the right to deliver a Subsequent
Financing Notice relating to the Series F Shares if Subsequent Financing Notices
were timely delivered as to the Series C Shares, Series D Shares or Series E
Shares, but one or more of the Closings relating to such Shares failed to occur
due to any reason other than a breach by the Purchaser of the provisions of this
Agreement.
(ii) Subject to the provisions of clause (i) above of this
paragraph (e), the closing of the purchase and sale of the Series F Shares (the
"SERIES F CLOSING") shall take place at the offices of Xxxxxxxx Xxxxxxxxx on
such date (which may not be prior to the tenth day after receipt of the
Subsequent Financing Notice relating to the Series F Shares) as the Company
shall designate in the Subsequent Financing Notice relating to the Series F
Shares, which the Company may deliver no earlier than October 1, 1997 and no
later than December 21, 1997, which Subsequent Financing Notice shall set forth
the number of Series F Shares (which may not exceed 3,000) that the Company
intends to sell to the Purchaser, PROVIDED, HOWEVER, in no case shall the Series
F Closing take place (A) earlier than the later to occur of October 11, 1997 and
the tenth day after receipt of the Subsequent Financing Notice relating to such
Closing or (B) later than December 31, 1997 (the "SERIES F CLOSING EXPIRATION
DATE"), and, PROVIDED, FURTHER, that in no case shall the Series F Closing take
place unless and until the conditions listed in Section 4.2 have been satisfied
or waived by the appropriate party. The date of the Series F Closing is referred
to as the "SERIES F CLOSING DATE."
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(iii) At the Series F Closing, (a) the Company shall deliver to
the Purchaser (1) one or more stock certificates representing the Series F
Shares being sold at such Closing, registered in the name of the Purchaser, and
(2) all documents, instruments and writings required to have been delivered at
or prior to the Series F Closing by the Company pursuant to this Agreement and
the Registration Rights Agreement, and (b) the Purchaser shall deliver to the
Company (1) the purchase price for the Series F Shares being purchased, as
determined pursuant to this Article I, in immediately available funds by wire
transfer to an account designated in writing by the Company prior to the Series
F Closing Date, and (2) all documents, instruments and writings required to have
been delivered at or prior to the Series F Closing by the Purchaser pursuant to
this Agreement and the Registration Rights Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The Company
hereby makes the following representations and warranties to the Purchaser:
(a) ORGANIZATION AND QUALIFICATION. The Company is a corporation,
duly incorporated, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, with the requisite corporate power and authority
to own and use its properties and assets and to carry on its business as
currently conducted. The Company has no subsidiaries other than as set forth in
the SCHEDULE 2.1(a) attached hereto (collectively, the "SUBSIDIARIES"). Each of
the Subsidiaries is a corporation, duly incorporated, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, with the
full corporate power and authority to own and use its properties and assets and
to carry on its business as currently conducted. Each of the Company and the
Subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be,
would not, individually or in the aggregate, have a material adverse effect on
the results of operations, assets, prospects, or financial condition of the
Company and the Subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT").
(b) AUTHORIZATION; ENFORCEMENT. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated hereby and by the Registration Rights Agreement, dated the date
hereof, between the Company and the Purchaser, in the form of EXHIBIT B (the
"REGISTRATION RIGHTS AGREEMENT"), the Initial Warrant (as hereinafter defined)
and the Subsequent Warrants (as hereinafter defined), and otherwise to carry out
its obligations hereunder and thereunder. The execution and delivery of this
Agreement, the Initial Warrant, the Subsequent Warrants and the Registration
Rights Agreement by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
action on the part of the Company. Each of this Agreement, the Registration
Rights Agreement and the Initial Warrant has been duly executed and delivered by
the Company and constitutes, and each Subsequent Warrant when delivered
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shall have been duly executed and will constitute, the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.
(c) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company is set forth in SCHEDULE 2.1(c). No shares of Common Stock
are entitled to preemptive or similar rights. Except as disclosed in SCHEDULE
2.1(c), there are no outstanding options, warrants, script rights to subscribe
to, calls or commitments of any character whatsoever relating to, or, except as
a result of the purchase and sale of the Shares and Warrants hereunder,
securities, rights or obligations convertible into or exchangeable for, or
giving any person any right to subscribe for or acquire any shares of Common
Stock, or contracts, commitments, understandings, or arrangements by which the
Company or any Subsidiary is or may become bound to issue additional shares of
Common Stock, or securities or rights convertible or exchangeable into shares of
Common Stock. Neither the Company nor any Subsidiary is in violation of any of
the provisions of its respective articles of organization, bylaws or other
charter documents.
(d) ISSUANCE OF SHARES. The Shares and the Warrants are duly
authorized, and when issued and paid for in accordance with the terms hereof
shall be validly issued, fully paid and nonassessable. The Company has and at
all times while the Shares and any Warrants are outstanding will maintain an
adequate reserve of duly authorized shares of Common Stock to enable it to
perform its obligations under this Agreement, the Warrants and the Vote
Certificates and in no circumstances shall such reserved and available shares of
Common Stock be on the Closing Date for such Shares less than the sum of (i) two
times the number of shares of Common Stock which would be issuable upon
conversion of the Shares to be issued on such Closing Date were such conversion
effected on the Original Issue Date for such Shares and (ii) (a) with respect to
the Series B Closing, the number of shares of Common Stock which would be
issuable upon exercise in full of the Initial Warrant on the original issue date
thereof and (b) with respect to each of the Series B Closing, Series C Closing,
Series D Closing, Series E Closing and Series F Closing, the number of shares of
Common Stock which would be issuable upon exercise in full of the Subsequent
Warrants issuable in respect of the Shares sold at such Closing. When issued in
accordance with the terms hereof and the Vote Certificates, the shares of Common
Stock into which the Shares may be converted (the "UNDERLYING SHARES") will be
duly authorized, validly issued, fully paid and nonassessable; and when issued
upon exercise of the Initial Warrant or Subsequent Warrants (collectively, the
"WARRANTS") in accordance with their respective terms, the shares of Common
Stock issuable on exercise of the Warrants (the "WARRANT SHARES") will be duly
authorized, validly issued, fully paid and nonassessable.
(e) NO CONFLICTS. The execution, delivery and performance of this
Agreement, the Registration Rights Agreement, the Vote Certificates and the
Warrants by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby do not and will not (i) conflict with or violate
any provision of its Restated Articles of Organization or bylaws (each as
amended through the date hereof) or (ii) subject to obtaining the consents
referred to in SECTION 2.1(f), conflict with, or constitute a default (or an
event which
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with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company is a party, or (iii)
to the knowledge of the Company result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company is subject (including
Federal and state securities laws and regulations), or by which any property or
asset of the Company is bound or affected, except in the case of each of clauses
(ii) and (iii), such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect. The business of the Company is not
being conducted in violation of any law, ordinance or regulation of any
governmental authority, except for violations which, individually or in the
aggregate, do not have a Material Adverse Effect.
(f) CONSENTS AND APPROVALS. Except as specifically set forth in
Schedule 2.1(f), neither the Company nor any Subsidiary is required to obtain
any consent, waiver, authorization or order of, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other person in connection with the execution,
delivery and performance by the Company of this Agreement, the Vote
Certificates, the Registration Rights Agreement or the Warrants, except for (i)
the filings of the Vote Certificates with respect to the Shares with the
Secretary of State of Massachusetts, which filings shall be effected prior to
the Series B Closing Date, the Series C Closing Date, the Series D Closing Date,
Series E Closing Date and Series F Closing Date, as appropriate, (ii) the filing
of (A) the registration statements contemplated by the Registration Rights
Agreement (the "UNDERLYING SECURITIES REGISTRATION STATEMENTS") with the
Securities and Exchange Commission (the "COMMISSION"), which shall be filed in
the time periods set forth in the Registration Rights Agreement and (B) a
separate Form D as to the transactions to occur at each of the Series B Closing,
Series C Closing, Series D Closing, Series E Closing and Series F Closing, as
applicable, (iii) applications for the listing of the Underlying Shares and the
Warrant Shares with the Nasdaq National Market or Nasdaq Small Cap Market, as
appropriate (and with any other national securities exchange or market on which
the Common Stock is then listed), and (iv) other than, in all other cases, where
the failure to obtain such consent, waiver, authorization or order, or to give
or make such notice or filing, would not materially impair or delay the ability
of the Company to effect the Series B Closing, the Series C Closing, the Series
D Closing, the Series E Closing or the Series F Closing and to deliver to the
Purchaser the Shares (and, upon conversion of the Shares thereunder, the
Underlying Shares) or the Warrants (and, upon exercise of the Warrants, the
Warrant Shares) in the manner contemplated hereby and the Registration Rights
Agreement free and clear of all liens and encumbrances of any nature whatsoever
(together with the consents, waivers, authorizations, orders, notices and
filings referred to in SECTION 2 and SCHEDULE 2.1(f), the "REQUIRED APPROVALS").
(g) LITIGATION; PROCEEDINGS. Except as specifically disclosed in the
Disclosure Materials (as hereinafter defined) or in SCHEDULE 2.1(g), there is no
action, suit, notice of violation, proceeding or investigation pending or, to
the best knowledge of the Company, threatened against or affecting the Company
or any of its Subsidiaries or any of their respective properties before or by
any court, governmental or administrative agency or regulatory authority
(Federal, state, county, local or foreign) which (i) relates to or challenges
the legality, validity or enforceability of this Agreement, the Registration
Rights Agreement, the Vote Certificates, the
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Warrants or the Shares (ii) could, individually or in the aggregate, have a
Material Adverse Effect or (iii) could, individually or in the aggregate,
materially impair the ability of the Company to perform fully on a timely basis
its obligations under this Agreement, the Vote Certificates, the Warrants or the
Registration Rights Agreement.
(h) NO DEFAULT OR VIOLATION. Neither the Company nor any Subsidiary
(i) is in default under or in violation of any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound, except such conflicts or defaults as
do not have a Material Adverse Effect, (ii) is in violation of any order of any
court, arbitrator or governmental body, except for such violations as do not
have a Material Adverse Effect, or (iii) is in violation of any statute, rule or
regulation of any governmental authority which could (individually or in the
aggregate) (x) adversely affect the legality, validity or enforceability of this
Agreement or the Registration Rights Agreement, (y) have a Material Adverse
Effect or (z) adversely impair the Company's ability or obligation to perform
fully on a timely basis its obligations under this Agreement, the Vote
Certificates, the Registration Rights Agreement or the Warrants.
(i) DISCLOSURE MATERIALS. The Schedules to this Agreement furnished
by or on behalf of the Company do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
(j) PRIVATE OFFERING. Assuming (without any independent investigation
or verification by or on behalf of the Company) the accuracy of the
representations and warranties of the Purchaser set forth in Section 2.2, the
offer and sale of the Shares, the Warrants, the Underlying Shares and the
Warrant Shares are exempt from registration under Section 5 of the Securities
Act of 1933, as amended (the "SECURITIES ACT"). Neither the Company nor any
person acting on its behalf has taken or will take any action (including,
without limitation, any offering of any securities of the Company under
circumstances which would require the integration of such offering with the
offering of the Shares under the Securities Act) which might subject the
offering, issuance or sale of the Shares, the Warrants, the Underlying Shares or
the Warrant Shares to the registration requirements of Section 5 of the
Securities Act.
(k) SEC DOCUMENTS. The Company has filed all reports required to be
filed by it under the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), including pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company was required by
law to file such material) (the foregoing materials being collectively referred
to herein as the "SEC DOCUMENTS" and, together with the Schedules to this
Agreement furnished by or on behalf of the Company, the "DISCLOSURE MATERIALS")
on a timely basis, or has received a valid extension of such time of filing. As
of their respective dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act and the Exchange Act and the
published rules and regulations of the Commission promulgated thereunder, and
none of the SEC Documents, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents comply as
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to form in all material respects with applicable accounting requirements and the
published rules and regulations of the Commission with respect thereto. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved,
except as may be otherwise indicated in such financial statements or the notes
thereto, and fairly present in all material respects the financial position of
the Company as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal year-end audit adjustments. Since the date of the
financial statements included in the Company's last filed Quarterly Report on
Form 10-Q or last filed Annual Report on Form 10-K, whichever has been most
recently filed with the Commission, there has been no event, occurrence or
development that has had a Material Adverse Effect which is not specifically
disclosed in any of the Disclosure Materials, except for the depletion of cash
resources of the Company since June 30, 1996.
(l) SENIORITY. No class of equity securities of the Company is senior
to the Shares in right of payment, whether upon liquidation, dissolution or
otherwise.
2.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser hereby
represents and warrants to the Company as follows:
(a) ORGANIZATION; AUTHORITY. The Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. The Purchaser has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated hereby and by the Registration Rights Agreement and otherwise to
carry out its obligations hereunder and thereunder. The purchase of the Shares
by the Purchaser hereunder has been duly authorized by all necessary action on
the part of the Purchaser. Each of this Agreement and the Registration Rights
Agreement has been duly executed and delivered by the Purchaser or on its behalf
and constitutes the valid and legally binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
generally and to general principles of equity.
(b) INVESTMENT INTENT. The Purchaser is acquiring the Shares, the
Warrants, the Underlying Shares and the Warrant Shares for its own account for
investment purposes only and not with a view to or for distributing or reselling
such Shares, Warrant Shares, Underlying Shares or Warrant Shares or any part
thereof or interest therein, without prejudice, however, to the Purchaser's
right, subject to the provisions of this Agreement and the Registration Rights
Agreement, at all times to sell or otherwise dispose of all or any part of such
Shares, Underlying Shares, Warrants or Warrant Shares pursuant to an effective
registration statement under the Securities Act and in compliance with
applicable State securities laws or under an exemption from such registration.
(c) PURCHASER STATUS. At the time the Purchaser was offered the
Shares and Warrants, it was, and at the date hereof, it is, and at each Closing
Date and each exercise date
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under the Warrants, it will be, an "accredited investor" as defined in Rule
501(a) under the Securities Act.
(d) EXPERIENCE OF PURCHASER. The Purchaser, either alone or together
with its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Shares, the Warrants, the Underlying
Shares and the Warrant Shares, and has so evaluated the merits and risks of such
investment.
(e) ABILITY OF PURCHASER TO BEAR RISK OF INVESTMENT. The Purchaser
is able to bear the economic risk of an investment in the Shares, the Warrants,
the Underlying Shares and the Warrant Shares and, at the present time, is able
to afford a complete loss of such investment.
(f) PROHIBITED TRANSACTIONS. The Shares and Warrants to be purchased
by the Purchaser are not being acquired, directly or indirectly, with the assets
of any "employee benefit plan," within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended.
(g) ACCESS TO INFORMATION. The Purchaser acknowledges receipt of the
Disclosure Materials and further acknowledges that it has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Shares and the Warrants and the merits and risks of
investing in the Shares and the Warrants; (ii) access to information about the
Company and the Company's financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information
which the Company possesses or can acquire without unreasonable effort or
expense that is necessary to make an informed investment decision with respect
to the investment and to verify the accuracy and completeness of the information
contained in the Disclosure Materials.
(h) RELIANCE. The Purchaser understands and acknowledges that (i) the
Shares and Warrants are being offered and sold, and the Underlying Shares and
the Warrants Shares are being offered, to it without registration under the
Securities Act in a private placement that is exempt from the registration
provisions of the Securities Act under Regulation D promulgated thereunder and
(ii) the availability of such exemption, depends in part on, and that the
Company will rely upon the accuracy and truthfulness of, the foregoing
representations and the Purchaser hereby consents to such reliance.
The Company acknowledges and agrees that the Purchaser makes no
representation or warranty with respect to the transactions contemplated hereby
other than those specifically set forth in this SECTION 2.2.
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ARTICLE III
OTHER AGREEMENTS OF THE PARTIES
3.1 TRANSFER RESTRICTIONS. (a) If the Purchaser should decide to dispose
of any of the Shares or Warrants to be purchased by it hereunder (and upon
conversion or exercise thereof, of any Underlying Shares or Warrant Shares), the
Purchaser understands and agrees that it may do so only (i) pursuant to an
effective registration statement under the Securities Act, (ii) to the Company
or (iii) pursuant to an available exemption or exclusion from the registration
requirements of the Securities Act. In connection with any transfer of any
Shares, Warrants, Underlying Shares or Warrant Shares other than pursuant to an
effective registration statement or to the Company, the Company may require that
the transferor provide to the Company an opinion of counsel experienced in the
area of United States securities laws selected by the transferor, the form and
substance of which opinion shall be reasonably satisfactory to the Company, to
the effect that such transfer does not require registration of such Shares,
Warrants, Underlying Shares or Warrant Shares, as the case may be, under the
Securities Act.
(b) The Purchaser agrees to the imprinting, so long as appropriate,
of the following legend on certificates representing the Shares, Underlying
Shares, Warrants and Warrant Shares:
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION OR EXCLUSION FROM THE REGISTRATION REQUIREMENTS THEREUNDER AND IN
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS.
The legend set forth above shall be removed following a resale of
Underlying Shares or Warrant Shares, as the case may be, pursuant to an
effective registration statement under the Securities Act or sooner if, in the
opinion of counsel to the Company experienced in the area of United States
securities laws, such legend is no longer required under applicable requirements
of the Securities Act. The certificates representing the Shares, Warrants,
Underlying Shares and Warrant Shares shall also bear any other legends required
by applicable Federal or state securities laws, which legends may be removed
when, in the opinion of counsel to the Company experienced in the applicable
securities laws, such legends are no longer required under the applicable
requirements of such securities laws. The Company agrees that it will provide
the Purchaser, upon request, with a substitute certificate or certificates, free
from such legend at such time as such legend is no longer applicable. The
Purchaser agrees that, in connection with any transfer of Underlying Shares or
Warrant Shares by it pursuant to an effective registration
12
statement under the Securities Act, the Purchaser will comply with all
prospectus delivery requirements of the Securities Act. The Company makes no
representation, warranty or agreement as to the availability of any exemption
from registration under the Securities Act with respect to any resale of Shares,
Underlying Shares, Warrants or Warrant Shares. The Purchaser acknowledges that
the Company has no obligation to register the resale of the Shares and Warrants.
3.2 STOP TRANSFER INSTRUCTION. The Purchaser agrees that the Company shall
be entitled to make a notation on its records and give instructions to any
transfer agent of the Company in order to implement the restrictions on transfer
set forth in this Agreement.
3.3 FURNISHING OF INFORMATION. As long as the Purchaser owns Shares,
Underlying Shares, Warrants or Warrant Shares, the Company covenants to timely
file (or obtain extensions in respect thereof) all reports required to be filed
by the Company after the date hereof pursuant to Section 13(a) or 15(d) of the
Exchange Act and to promptly furnish the Purchaser with true and complete copies
of all such filings. If the Company is not at the time required to file reports
pursuant to such sections, it will prepare and furnish to the Purchaser annual
and quarterly reports comparable to those required by Section 13(a) or 15(d) of
the Exchange Act in the time period that such filings would have been required
to have been made under the Exchange Act.
3.4 NOTICE OF CERTAIN EVENTS. The Company shall (i) advise the Purchaser
promptly after obtaining knowledge thereof, and, if requested by the Purchaser,
confirm such advice in writing, of the issuance by any state securities
commission of any stop order suspending the qualification or exemption from
qualification of the Shares or the Common Stock for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purpose by any state
securities commission or other regulatory authority, or (ii) use its best
efforts to prevent the issuance of any stop order or order suspending the
qualification or exemption from qualification of the Shares, Warrant Shares or
the Underlying Shares under any state securities or Blue Sky laws, and (iii) if
at any time any state securities commission or other regulatory authority shall
issue an order suspending the qualification or exemption from qualification of
the Shares, Warrant Shares or the Underlying Shares under any such laws, use its
best efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
3.5 COPIES AND USE OF DISCLOSURE MATERIALS. The Company consents to the
use of the Disclosure Materials, and any amendments and supplements thereto, by
the Purchaser in connection with resales of the Shares, the Underlying Shares or
the Warrant Shares.
3.6 BLUE SKY LAWS. In accordance with the Registration Rights Agreement,
the Company shall qualify the Underlying Shares and the Warrant Shares under the
securities or Blue Sky laws of such jurisdictions as the Purchaser may request
and shall continue such qualification at all times through the fourth
anniversary of the last Closing Date; PROVIDED, HOWEVER, that neither the
Company nor its Subsidiaries shall be required in connection therewith to
qualify as a foreign corporation where they are not now so qualified or to take
any action that would subject the Company to general service of process in any
such jurisdiction where it is not then so subject or subject the Company to any
material tax in any such jurisdiction where it is not then so subject.
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3.7 INTEGRATION. The Company shall not and shall use its best efforts to
ensure that no person controlling, controlled by or under common control with
the Company (an "Affiliate") shall sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in Section 2 of
the Securities Act) that would be integrated with the offer or sale of the
Shares, the Warrants, the Underlying Shares or the Warrant Shares in a manner
that would require the registration under the Securities Act of the sale of the
Shares, the Warrants, the Underlying Shares or the Warrant Shares to the
Purchaser.
3.8 SOLICITATION MATERIALS. The Company shall not (i) distribute any
offering materials in connection with the offering and sale of the Shares, the
Warrants, the Underlying Shares or the Warrant Shares other than the Disclosure
Materials and any amendments and supplements thereto prepared in compliance
herewith or (ii) solicit any offer to buy or sell the Shares, the Warrants, the
Underlying Shares or the Warrant Shares by means of any form of general
solicitation or advertising.
3.9 CERTAIN AGREEMENTS. From the date hereof through the final Closing
Date, the Company shall not and shall cause the Subsidiaries not to, without the
consent of the Purchaser, (i) amend its certificate of incorporation, bylaws or
other charter documents so as to adversely affect any rights of the Purchaser;
(ii) declare, authorize, set aside or pay any dividend or other distribution
with respect to the Common Stock except as permitted under the Vote Certificates
and as would not adversely affect the rights of the Purchaser hereunder or under
the Vote Certificates; (iii) repay, repurchase or offer to repay, repurchase or
otherwise acquire shares of its Common Stock in any manner which adversely
affects the rights of the Purchaser hereunder or under the Vote Certificates; or
(iv) enter into any agreement with respect to any of the foregoing.
3.10 PURCHASER OWNERSHIP OF COMMON STOCK. The Purchaser may not use its
ability to convert Shares hereunder or under the terms of the Vote Certificates
or to exercise its right to acquire shares of Common Stock under the Warrants to
the extent that such conversion or exercise would result in the Purchaser owning
more than 4.9% of the outstanding shares of the Common Stock. The Company shall,
promptly upon its receipt of a Holder Conversion Notice tendered by the
Purchaser (or its sole designee) under the Vote Certificates, and upon its
receipt of a notice of exercise under the terms of any of the Warrants, notify
the Purchaser by telephone and by facsimile of the number of shares of Common
Stock outstanding on such date and the number of Underlying Shares and Warrant
Shares which would be issuable to the Purchaser (or its sole designee, as the
case may be) if the conversion requested in such Conversion Notice or exercise
requested in such exercise notice were effected in full, whereupon,
notwithstanding anything to the contrary set forth in the Vote Certificates or
the Warrants, the Purchaser may within one Trading Day of its receipt of the
Company notice required by this Section by telephone or by facsimile revoke such
conversion or exercise to the extent that it determines that such conversion or
exercise would result in the Purchaser owning in excess of 4.9% of such
outstanding shares of Common Stock.
3.11 LISTING OF UNDERLYING SHARES. The Company shall take all steps
necessary to cause the Underlying Shares and Warrant Shares to be approved for
listing in the Nasdaq National Market or Nasdaq Small Cap Market (as well as on
any other national securities
14
exchange or market on which the Common Stock is then listed) no later than the
first day after which Shares may be converted by the Purchaser into Common
Stock, and shall provide to the Purchaser evidence of such listing, and shall
maintain the listing of its Common Stock on such exchange.
3.12 CONVERSION PROCEDURES. EXHIBIT C attached hereto sets forth the
procedures with respect to the conversion of the Preferred Stock, including the
forms of conversion notice to be provided upon conversion, instructions as to
the procedures for conversion, the form of legal opinion, if necessary, that
shall be rendered to the Company's transfer agent and such other information and
instructions as may be reasonably necessary to enable the Purchaser to exercise
its right of conversion smoothly and expeditiously.
3.13 PURCHASER'S RIGHTS IF TRADING IN COMMON STOCK IS SUSPENDED. In the
event that at any time within the two-year period after the last Closing Date
trading in the shares of the Common Stock is suspended on the Nasdaq National
Market or Nasdaq Small Cap Market (other than as a result of the suspension of
trading in securities on such market generally or temporary suspensions pending
the release of material information and other than a suspension of trading on
the Nasdaq National Market if the Common Stock is listed for trading, and not
suspended, on the Nasdaq Small Cap Market within one business day after such
suspension), the Company shall immediately declare and pay to the Purchaser (as
liquidated damages and not as a penalty) in cash a cumulative dividend (which
shall be in addition to any dividend set forth in the Series B Terms) of (i)
1.5% for each of the first two months after such suspension and (ii) 2.0% for
each month thereafter, in respect of the Shares and, to the extent converted,
Underlying Shares then held by the Purchaser for so long as such suspension
shall continue.
3.14 NO VIOLATION OF APPLICABLE LAW. Notwithstanding any provision of this
Agreement to the contrary, if the declaration or payment of the dividend
contemplated by Section 3.13 would be prohibited by the relevant provisions of
the Massachusetts Business Corporation Law, such declaration and payment shall
be effected as soon as it is permitted under such law and such dividends shall
continue to accrue and be declared until paid in full.
3.15 DIVIDEND RESTRICTIONS. Notwithstanding any provision of this Agreement
to the contrary, if the declaration or payment of the dividend contemplated by
Section 3.13 would be prohibited in the absence of consent from any lender of
the Company or any Subsidiary, or by the holders of any class of securities of
the Company, the Company shall use its best efforts to obtain such consent as
promptly as practicable after the obligation to declare and pay such dividend
arises hereunder. Nothing contained in this SECTION 3.15 shall be construed as a
waiver by the Purchaser of any rights it may have by virtue of any breach of any
representation or warranty of the Company herein as to the absence of any
requirement to obtain any such consent.
3.16 PIGGYBACK REGISTRATION RIGHTS. During the period commencing the date
hereof and ending on the earlier to occur of (i) the one year anniversary of the
last Closing and (ii) the date the last Underlying Securities Registration
Statement required to be filed by the Company is declared effective under the
Securities Act by the Commission, the Company may not file any registration
statement that provides for the registration of shares of Common Stock to be
sold by other shareholders of the Company unless the Company provides the
Purchaser with not less
15
than seven (7) Trading Days' notice of its intention to file such registration
statement and provides the Purchaser the option to include any or all of the
Underlying Shares and Warrant Shares therein as to which there is not at that
time an effective Underlying Securities Registration Statement. Such
registration rights shall not apply to registration statements relating solely
to (i) employee benefit plans notwithstanding the inclusion of a resale
prospectus for securities received under such employee benefit plan, or (ii)
business combinations unless the registration statement relates to securities to
be received by the holders of the Common Stock of the Company. In the event that
any registration pursuant to this Section 3.16 shall be, in whole or in part, a
firm commitment underwritten offering of securities of the Company, any request
by such holders pursuant hereto to register Underlying Shares or Warrant Shares
must specify that such shares are to be included in the underwriting on the same
terms and conditions as the shares of securities, if any, otherwise being sold
through underwriters under such registration. If no shares of securities are
being sold through underwriters under such registration, then any request by
such holders pursuant to this Section 3.16 to register such Underlying Shares or
Warrant Shares must specify that such shares are to be included in the
registration on terms and conditions comparable to those normally applicable to
offerings of common stock in reasonably similar circumstances. Notwithstanding
any other provision of this Section, if the underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten or that it is otherwise advisable, the underwriter may exclude the
Underlying Shares or Warrant Shares from such registration, PROVIDED, HOWEVER,
except as otherwise required by the registration rights granted by the Company
as specified in Schedule 2.1(c) to the Purchase Agreement prior to the date
hereof, if any shares of Common Stock are to be included in such registration
for the account of any person other than the Company, then the number of
Underlying Shares and warrant Shares to be included in such registration shall
be determined pro rata based upon the ratio of the aggregate number of
Underlying Shares and Warrant Shares requested to be included in such
registration to the total number of shares of Common Stock (including such
Underlying Shares and Warrant Shares) requested to be included therein.
3.17 NOTICE OF BREACHES. Each of the Company and the Purchaser shall give
prompt written notice to the other of any breach of any representation, warranty
or other agreement contained in this Agreement or in the Registration Rights
Agreement, as well as any events or occurrences arising after the date hereof
and prior to, with respect to the Series B Closing, the Series B Closing Date,
with respect to the Series C Closing, the Series C Closing Date, with respect to
the Series D Closing, the Series D Closing Date, with respect to the Series E
Closing, the Series E Closing Date, or with respect to the Series F Closing, the
Series F Closing Date which would reasonably be likely to cause any
representation or warranty or other agreement of such party, as the case may be,
contained herein to be incorrect or breached as of such Closing Date. However,
no disclosure by either party pursuant to this SECTION 3.17 shall be deemed to
cure any breach of any representation, warranty or other agreement contained
herein or in the Registration Rights Agreement. Neither the Company, any
Subsidiary nor the Purchaser will take, or agree to commit to take, any action
that is intended to make any representation or warranty of the Company or the
Purchaser, as the case may be, contained herein or in the Registration Rights
Agreement inaccurate in any respect at the Series B Closing Date, Series C
Closing Date, Series D Closing Date, Series E Closing Date or Series F Closing
Date, as applicable.
16
Notwithstanding the generality of the foregoing, the Company shall promptly
notify the Purchaser of any notice or claim (written or oral) that it receives
from any lender of the Company to the effect that the consummation of the
transactions contemplated hereby and by the Registration Rights Agreement
violates or would violate any written agreement or understanding between such
lender and the Company, and the Company shall promptly furnish by facsimile to
the holders of the Shares a copy of any written statement in support of or
relating to such claim or notice.
3.18 ADDITIONAL WARRANTS. (a) If the Company does not receive a Holder
Conversion Notice (as defined in the Series B Terms) within 80 days following
the Series B Closing Date, the Company shall, within one Trading Day thereafter,
execute and deliver to the Purchaser a common stock purchase warrant in the form
attached hereto as EXHIBIT F (the "SERIES B SUBSEQUENT WARRANT"), pursuant to
which the Purchaser shall have the right at any time thereafter through the
fifth anniversary of such date, to acquire 250,000 shares of Common Stock at an
exercise price per share equal to 150% of the Market Price on the 81st day after
the Original Issue Date of the Series B Preferred.
(b) If with respect to each of the Series C Shares, Series D Shares,
Series E Shares and Series F Shares, respectively, the Company does not receive
a Conversion Notice within 80 days following the Series C Closing Date, Series D
Closing Date, Series E Closing Date or Series F Closing Date, as the case may
be, then Company shall in each such case promptly execute and deliver to the
Purchaser a common stock purchase warrant, in the form of Exhibit F (each, along
with the Series B Subsequent Warrant, a "SUBSEQUENT WARRANT"), pursuant to which
the Purchaser shall have the right at any time through the fifth anniversary of
the issuance thereof, to acquire shares of Common Stock equal to 50% of the
number of shares of Common Stock that would be issuable upon conversion of such
Series C Shares, Series D Shares, Series E Shares or Series F Shares, as the
case may be, on the 81st day after the Original Issue Date for such Shares, at
an exercise price per share equal to 150% of the Market Price on the 81st day
after the Original Issue Date for such Shares.
3.19 VOLUME RESTRICTIONS; RESTRICTIONS ON SHORT SALES. (a) For so long as
the Purchaser holds Shares, the Purchaser shall not sell a net number of shares
of Common Stock (through short positions or otherwise) in excess of the greater
of (i) in any period of five (5) consecutive Trading Days, 20% of the weekly
trading volume of the Common Stock for the average of the 5 Trading Days
immediately proceeding such sale and (ii) on any Trading Day, 20% of the trading
volume of the Common Stock on the day of such sale. The Purchaser shall provide
the Company with notice of its daily sales of Common Stock within 10 business
days of the end of each month in which any such sales occur.
(b) Neither the Purchaser nor any Affiliate of the Purchaser will
establish a short position in the Common Stock during the period between the
date it receives a Subsequent Financing Notice and the Closing Date relating to
such Subsequent Financing Notice.
3.20 CONVERSION OBLIGATIONS OF THE COMPANY. The Company covenants to
convert Shares and to deliver Underlying Shares in accordance with the terms and
conditions and time
17
period set forth in the respective Vote Certificates, and to deliver Warrant
Shares in accordance with the terms and conditions and time periods set forth in
the Warrants.
ARTICLE IV
CONDITIONS
4.1(a) CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO SELL THE
SERIES B SHARES. The obligation of the Company to sell the Series B Shares
hereunder is subject to the satisfaction or waiver by the Company, at or before
the Series B Closing, of each of the following conditions:
(i) ACCURACY OF THE PURCHASER'S REPRESENTATIONS AND
WARRANTIES. The representations and warranties of the Purchaser shall be true
and correct in all material respects as of the date when made and as of the
Series B Closing Date, as though made on and as of such date (except that
representations and warranties that are made as of a specific date need be true
in all material respects only as of such date);
(ii) PERFORMANCE BY THE PURCHASER. The Purchaser shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Purchaser at or prior to the Series B Closing;
(iii) NO INJUNCTION. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Registration Rights Agreement; and
(iv) Required Approvals. All Required Approvals shall have been
obtained other than those relating solely to the Series C Shares, Series D
Shares, Series E Shares or Series F Shares.
(b) CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER TO
PURCHASE THE SERIES B SHARES. The obligation of the Purchaser hereunder to
acquire and pay for the Series B Shares is subject to the satisfaction or waiver
by the Purchaser, at or before the Series B Closing, of each of the following
conditions:
(i) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company shall be true and correct in
all material respects as of the date when made and as of the Series B Closing
Date as though made on and as of such date (except that representations and
warranties that are made as of a specific date need be true in all material
respects only as of such date);
18
(ii) PERFORMANCE BY THE COMPANY. The Company shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Series B Closing;
(iii) NO INJUNCTION. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Registration Rights Agreement;
(iv) ADVERSE CHANGES. Since the date of the financial
statements included in the Company's Quarterly Report on Form 10-Q or Annual
Report on Form 10-K, whichever is more recent, last filed prior to the date of
this Agreement, no event which in the judgment of the Purchaser had a Material
Adverse Effect and no material adverse change in the financial condition or
prospects of the Company shall have occurred (other than the depletion of cash
resources of the Company) which is not disclosed in the Disclosure Materials
(for purposes hereof, a market price of $2.50 or less for the Common Stock or a
market capitalization of the Company of $50,000,000 or less shall be deemed an
event which has had a Material Adverse Effect);
(v) NO SUSPENSIONS OF TRADING IN COMMON STOCK. The trading in
the Common Stock shall not have been suspended by the Commission or on the
Nasdaq National Market or Nasdaq Small Cap Market (except for any suspension of
trading of limited duration solely to permit dissemination of material
information regarding the Company and except for a suspension of trading on the
Nasdaq National Market if the Common Stock is listed for trading on the Nasdaq
Small Cap Market within one business day from such suspension);
(vi) LISTING OF COMMON STOCK. The Common Stock shall have at
all times between the date hereof and the Series B Closing Date been, and on the
Series B Closing Date be, listed for trading on the Nasdaq National Market or
Nasdaq Small Cap Market;
(vii) LEGAL OPINION. The Company shall have delivered to the
Purchaser the opinion of Xxxxx Xxxxx Xxxx Xxxxxx Xxxxxxx and Xxxxx PC, counsel
to the Company, in substantially the form attached hereto as Exhibit D;
(viii) REQUIRED APPROVALS. All Required Approvals shall have
been obtained other than those relating solely to the Series C Shares, the
Series D Shares, the Series E Shares or the Series F Shares;
(ix) SHARES OF COMMON STOCK. On or prior to the Series B
Closing Date, the Company shall have duly reserved for issuance upon conversion
of Series B Shares and exercise of the Initial Warrant 1,929,260 Underlying
Shares and 250,000 Warrant Shares;
(x) DELIVERY OF STOCK CERTIFICATES. The Company shall have
delivered to the Purchaser or its designee the stock certificate(s) representing
the Series B Shares, registered in the name of the Purchaser, each in form
satisfactory to Xxxxxxxx Xxxxxxxxx;
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(xi) REGISTRATION RIGHTS AGREEMENT. The Company shall have
executed and delivered the Registration Rights Agreement;
(xii) WARRANT. The Company shall have executed and delivered to
the Purchaser a common stock purchase warrant (the "INITIAL WARRANT"),
substantially in the form attached hereto as EXHIBIT E, pursuant to which the
Purchaser shall have the right, at any time from the Series B Closing Date
through the fifth anniversary of such date, to purchase 250,000 shares of Common
Stock at an exercise price per share equal to 150% of the Market Price on the
Series B Closing Date;
(xiii) CERTIFICATE OF VOTE OF DIRECTORS. The Series B Vote
Certificate shall have been duly filed with the Secretary of State of
Massachusetts, and the Company shall have delivered a copy thereof to the
Purchaser certified as filed by the office of the Secretary of State of
Massachusetts; and
(xiv) COMPANY CERTIFICATES. The Purchaser shall have received a
certificate, dated the Series B Closing Date, signed by the Secretary or an
Assistant Secretary of the Company and certifying (i) that attached thereto is a
true, correct and complete copy of (A) the Company's Restated Articles of
Organization, as amended to the date thereof, (B) the Company's By-Laws, as
amended to the date thereof, and (C) resolutions duly adopted by the Board of
Directors of the Company authorizing the execution, delivery and (where
appropriate) filing of this Agreement, the Warrants, the Vote Certificates and
the Registration Rights Agreement and the issuance and sale of the Series B
Shares, the Warrants, the Underlying Shares and the Warrant Shares and (ii) the
incumbency of the officers executing this Agreement, the Registration Rights
Agreement and the Warrants.
4.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER TO PURCHASE
THE SERIES C SHARES, THE SERIES D SHARES, THE SERIES E SHARES AND THE SERIES F
SHARES. The obligation of the Purchaser hereunder to acquire and pay for the
Series C Shares, the Series D Shares, the Series E Shares and the Series F
Shares is subject to the satisfaction or waiver by the Purchaser, at or before
the Series C Closing, the Series D Closing, the Series E Closing and the Series
F Closing, as applicable of each of the following conditions:
(i) SERIES B CLOSING. The Series B Closing shall have occurred.
(ii) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Company contained herein and in the
Registration Rights Agreement shall be true and correct in all material respects
as of the date when made and as of the Series C Closing Date, the Series D
Closing Date, the Series E Closing Date and the Series F Closing Date, as
applicable, as though made on and as of such date (except that representations
and warranties that are made as of a specific date need be true in all material
respects only as of such date);
(iii) PERFORMANCE BY THE COMPANY. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and
20
conditions required by this Agreement and the Registration Rights Agreement to
be performed, satisfied or complied with by the Company at or prior to the
Series C Closing Date, the Series D Closing Date, the Series E Closing Date or
the Series F Closing Date, as applicable;
(iv) UNDERLYING SECURITIES REGISTRATION STATEMENTS. With respect to
the Series C Closing, the Underlying Securities Registration Statement with
respect to the Underlying Shares issuable on conversion of all outstanding
Series B Shares and with respect to the Warrant Shares issuable upon exercise of
the Initial Warrant shall have been declared effective under the Securities Act
by the Commission; with respect to the Series D Closing, the Underlying
Securities Registration Statement with respect to the Underlying Shares issuable
on conversion of all outstanding Series C Shares (and if applicable, the Warrant
Shares issuable in respect of the Subsequent Warrant in respect of the Series C
Shares) shall have been declared effective under the Securities Act by the
Commission; with respect to the Series E Closing, the Underlying Securities
Registration Statement with respect to the Underlying Shares issuable on
conversion of all outstanding Series D Shares (and if applicable, the Warrant
Shares issuable in respect of the Subsequent Warrant in respect of the Series D
Shares) shall have been declared effective under the Securities Act by the
Commission; and with respect to the Series F Closing, the Underlying Securities
Registration Statement with respect to the Underlying Shares issuable on
conversion of all outstanding Series E Shares (and if applicable, the Warrant
Shares issuable in respect of the Subsequent Warrant in respect of the Series E
Shares) shall have been declared effective by the Commission; and in each such
case such Underlying Registration Statement shall have remained effective and
shall not be subject to any stop order and no stop order shall be pending or
threatened as at such Closing Date;
(v) NO INJUNCTION. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court of governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement or the Registration Rights Agreement relating to the issuance or
conversion of any of the Shares or exercise of any of the Warrants;
(vi) ADVERSE CHANGES. Since the date of the financial statements
included in the Company's last filed Quarterly Report on Form 10-Q or Annual
Report on Form 10-K, whichever is more recent, last filed prior to the date of
this Agreement, no event which in the judgment of the Purchaser had a Material
Adverse Effect shall have occurred (other than the depletion of cash resources
of the Company), nor shall there have occurred in the judgment of the Purchaser
a material adverse change in the financial conditions or prospects of the
Company, which is not disclosed in the Disclosure Materials (for purposes
hereof, if, at any time after the Series B Closing Date, the market price of the
Common Stock is $2.50 or less, or if the market capitalization of the Company is
$50,000,000 or less, an event which has had a Material Adverse Event shall be
deemed to have occurred);
(vii) TRADING VOLUME. The average daily trading volume for the
Common Stock for the 60 Trading Days immediately preceding such Closing Date
shall have been at least 100,000 shares and during the such 60 Trading Day
period the average daily trading volume of the Common Stock for any 15
consecutive Trading Days shall not have been below 60,000 shares;
21
(viii) LITIGATION. No material litigation shall have been instituted
or threatened against the Company;
(ix) MANAGEMENT. In the reasonable judgment of the Purchaser, no
material adverse changes shall have occurred in the senior management of the
Company;
(x) NO SUSPENSIONS OF TRADING IN COMMON STOCK. The trading in the
Common Stock shall not have been suspended by the Commission or on the Nasdaq
National Market or Nasdaq Small Cap Market (except for any suspension of trading
of limited duration solely to permit dissemination of material information
regarding the Company and except for a suspension of trading in the Nasdaq
Market if the Common Stock is listed for trading on the Nasdaq Small Cap Market
within one business day following such suspension);
(xi) LISTING OF COMMON STOCK. The Common Stock shall have been at
all times between the Series B Closing Date and the Series C Closing Date, the
Series D Closing Date, the Series E Closing Date and the Series F Closing Date,
as applicable, and on such applicable Closing Date be, listed for trading on the
Nasdaq National Market or Nasdaq Small Cap Market;
(xii) LEGAL OPINION. The Company shall have delivered to the
Purchaser an opinion of outside legal counsel to the Company in substantially
the form attached hereto as Exhibit D and dated the applicable Closing Date;
(xiii) REQUIRED APPROVALS. All Required Approvals shall have been
obtained;
(xiv) SHARES OF COMMON STOCK. On each of the Series C Closing Date,
Series D Closing Date, Series E Closing Date and Series F Closing Date, as
applicable, the Company shall have reserved for issuance to the Purchaser (a)
two times the number of Underlying Shares which would be issuable upon
conversion in full of the Series C Shares, Series D Shares, Series E Shares or
Series F Shares, as applicable, assuming such conversion occurred on the
Original Issue Date for such Shares and (b) a sufficient number of Warrant
Shares issuable upon exercise in full of the applicable Subsequent Warrant.
(xv) DELIVERY OF STOCK CERTIFICATES. The Company shall have
delivered to the Purchaser or its designee the stock certificate(s) representing
the Shares, being purchased at such Closing, registered in the name of the
Purchaser, each in form satisfactory to Xxxxxxxx Xxxxxxxxx.
(xvi) PERFORMANCE OF CONVERSION/EXERCISE OBLIGATIONS. The Company
shall have (a) delivered Underlying Shares upon conversion of Shares and
otherwise performed its obligations in accordance with the terms, conditions and
timing requirements of each Vote Certificate and (b) shall have delivered
Warrant Shares upon exercise of the Warrants and otherwise performed its
obligations in accordance with the terms of the Warrants.
22
(xvii) FORM S-3 ELIGIBILITY. At each Closing, the Company shall be
eligible to register securities for resale under Form S-3 (or a successor
thereto) promulgated under the Securities Act.
ARTICLE V
TERMINATION
5.1 TERMINATION BY MUTUAL CONSENT. (a) This Agreement may be terminated
with respect to the transactions contemplated herein relating to both the Shares
and the Underlying Shares at any time prior to the Series B Closing by the
mutual consent of the Company and the Purchaser.
(b) This Agreement may be terminated with respect to the transactions
contemplated herein relating solely to the Series C Shares at any time prior to
the Series C Closing by the mutual written consent of the Company and the
Purchaser.
(c) This Agreement may be terminated with respect to the transactions
contemplated herein relating solely to the Series D Shares at any time prior to
the Series D Closing by the mutual written consent of the Company and the
Purchaser.
(d) This Agreement may be terminated with respect to the transactions
contemplated herein relating solely to the Series E Shares at any time prior to
the Series E Closing by the mutual written consent of the Company and the
Purchaser.
(e) This Agreement may be terminated with respect to the transactions
contemplated herein relating solely to the Series F Shares at any time prior to
the Series F Closing by the mutual written consent of the Company and the
Purchaser.
5.2 TERMINATION BY THE COMPANY. (a) This Agreement may be terminated with
respect to the transactions contemplated herein relating to both the Shares and
the Underlying Shares prior to the Series B Closing by the Company, by giving
notice of such termination to the Purchaser, if the Purchaser has materially
breached any representation, warranty, covenant or agreement contained in this
Agreement and such breach is not cured within five business days following
receipt by the Purchaser of notice of such breach.
(b) This Agreement may be terminated with respect to the transactions
contemplated herein relating solely to the Series C Shares prior to the Series C
Closing by the Company, by giving notice of such termination to the Purchaser.
(c) This Agreement may be terminated with respect to the transactions
contemplated herein relating solely to the Series D Shares prior to the Series D
Closing by the Company, by giving notice of such termination to the Purchaser.
23
(d) This Agreement may be terminated with respect to the transactions
contemplated herein relating solely to the Series E Shares prior to the Series E
Closing by the Company, by giving notice of such termination to the Purchaser.
(e) This Agreement may be terminated with respect to the transactions
contemplated herein relating solely to the Series F Shares prior to the Series F
Closing by the Company, by giving notice of such termination to the Purchaser.
5.3 TERMINATION BY THE PURCHASER. (a) This Agreement may be terminated
prior to the Series B Closing with respect to the transactions contemplated
herein relating to both the Shares and the Underlying Shares by the Purchaser,
by giving notice of such termination to the Company, if:
(i) the Company has breached any representation, warranty, covenant or
agreement contained in this Agreement and such breach is not cured within
five business days following receipt by the Company of notice of such
breach;
(ii) there has occurred an event since the date of the financial
statements included in the Company's Quarterly Report on Form 10-Q or
Annual Report on Form 10-K, whichever is more recent, last filed prior to
the date of this Agreement which has in the judgment of the Purchaser had a
Material Adverse Effect and which is not disclosed in the SEC Documents or
if there has occurred in the Purchaser's judgment since such date a
material adverse change in the financial condition or prospects of the
Company (for such purpose, at any time between the date hereof and the
Series B Closing Date, a market price of $2.50 or less for the Common Stock
or a market capitalization of the Company of $50,000,000 or less shall be
deemed an event which has had a Material Adverse Effect);
(iii) trading in the Company's Common Stock has been suspended by the
Commission or the Nasdaq (except for any suspension of trading of limited
duration solely to permit dissemination of material information regarding
the Company); or
(iv) the Company's Common Stock shall have failed to be listed for
trading on the Nasdaq National Market or Nasdaq Small Cap Market and the
Purchaser shall have exercised its termination right herein provided within
10 business days of obtaining knowledge of such delisting.
(b) This Agreement may be terminated by the Purchaser prior to the
Series C Closing with respect to the transactions contemplated herein relating
solely to the Series C Shares, or prior to the Series D Closing with respect to
the transactions contemplated herein relating solely to the Series D Shares, or
prior to the Series E Closing with respect to the transactions contemplated
herein relating solely to the Series E Shares, or prior to the Series F Closing
with respect to the transactions contemplated herein relating to the Series F
Shares, by giving notice of such termination to the Company, if:
24
(i) after the Series B Closing Date, the Company has breached any
representation, warranty, covenant or agreement contained in this
Agreement, the Registration Rights Agreement, any Warrant or any Vote
Certificate and such breach is not cured within five business days
following receipt by the Company of notice of such breach;
(ii) there has occurred an event since the date of the financial
statements included in the Company's Quarterly Report on Form 10-Q or
Annual Report on Form 10-K, whichever is later, last filed prior to the
date of this Agreement which could reasonably be expected to have a
Material Adverse Effect and which is not disclosed in the SEC Documents or
if there has occurred in the Purchaser's judgment since such date a
material adverse change (other than as a result of a depletion of cash
resources of the Company) in the financial condition or prospects of the
Company (for such purpose, at any time after the Series B Closing Date, a
market price of $2.50 or less for the Common Stock or a market
capitalization of the Company of $50,000,000 or less shall be an event that
has had a Material Adverse Effect);
(iii) trading in the Company's Common Stock has been suspended by the
Commission or the Nasdaq (except for any suspension of trading of limited
duration solely to permit dissemination of material information regarding
the Company);
(iv) the Company's Common Stock shall have failed to be listed for
trading on either the Nasdaq National Market or Nasdaq Small Cap Market at
any time after the Series B Closing Date and the Purchaser shall have
exercised its termination right herein provided within 10 Trading Days of
obtaining knowledge of any delisting.
(v) the Underlying Securities Registration Statement with respect to
(1) the Underlying Shares into which the Series B Shares may be converted
and (2) the Warrant Shares issuable upon conversion of the Initial Warrant
is not declared effective under the Securities Act by the Commission prior
to the 80th day after the Series B Closing Date or shall not be effective
on such subsequent Closing Date; the Underlying Securities Registration
Statement with respect to (1) the Underlying Shares into which the Series C
Shares may be converted and (2) the Warrant Shares issuable upon exercise
of the Series B Subsequent Warrant (if issuable) has not been declared
effective under the Securities Act by the Commission prior to the 80th day
after the Series C Closing Date or shall not be effective on such
subsequent Closing Date; the Underlying Securities Registration Statement
with respect to (1) the Underlying Shares into which the Series D Shares
may be converted and (2) the Warrant Shares issuable upon exercise of the
Subsequent Warrant (if issuable) in respect to the Series D Shares has not
been declared effective under the Securities Act by the Commission prior to
the 80th day after the Series D Closing Date or shall not be effective on
such subsequent Closing Date; the Underlying Securities Registration
Statement with respect to the Underlying Shares into which the Series E
Shares may be converted and (2) the Warrant Shares issuable upon exercise
of the Subsequent Warrant (if issuable) in respect of the Series E Shares
has not been declared effective under the Securities Act by the Commission
prior to the 80th day after the Series E Closing Date.
25
ARTICLE VI
MISCELLANEOUS
6.1 FEES AND EXPENSES. Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement, except as set forth in the
Registration Rights Agreement and except that the Company shall reimburse the
Purchaser at the Series B Closing, for its legal fees and disbursements of
$10,000. The Company shall pay all stamp and other taxes and duties levied in
connection with the issuance of the Shares pursuant hereto. The Purchaser shall
be responsible for the Purchaser's own tax liability that may arise as a result
of the investment hereunder or the transactions contemplated by this Agreement.
6.2 ENTIRE AGREEMENT; AMENDMENTS. This Agreement, together with the
Exhibits and Schedules hereto, the Registration Rights Agreement, the Vote
Certificates (each when filed) and the Warrants contain the entire understanding
of the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters.
6.3 NOTICES. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be deemed to have been received
(a) upon hand delivery (receipt acknowledged) or delivery by telex (with correct
answer back received), telecopy or facsimile (with transmission confirmation
report) at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered on a business day after
during normal business hours where such notice is to be received) or (b) on the
second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur. The addresses for such communications
shall be:
26
If to the Company:
IMMUNOGEN, INC.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
With copies to: Mintz Xxxxx Xxxx Xxxxxx Xxxxxxx
and Popeo PC
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxx
and Xxxxx X. Xxxxxx
Fax: (000) 000-0000
If to the Purchaser:
Southbrook International
Investments, Ltd.
c/o Trippoak Advisors
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
27
With copies to Xxxxx Xxxxxxx, LLC
Carnegie Hall Tower
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
- and -
Xxxxxxxx Xxxxxxxxx Xxxxxx
Aronsohn & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
and Xxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
or such other address as may be designated in writing hereafter, in the same
manner, by such person.
6.4 AMENDMENTS; WAIVERS. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
both the Company and the Purchaser; or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.
6.5 HEADINGS. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
6.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns.
Neither the Company nor the Purchaser may assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other. The
assignment by a party of this Agreement or any rights hereunder shall not affect
the obligations of such party under this Agreement.
6.7 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
6.8 GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof.
28
6.9 SURVIVAL. The agreements and covenants contained in ARTICLE III and
this ARTICLE VI shall survive the delivery and conversion of the Shares pursuant
to this Agreement. and the representations and warranties of the Company and the
Purchaser contained in Article II shall survive until a date that is three years
after the last Closing date.
6.10 EXECUTION. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
6.11 PUBLICITY. The Company and the Purchaser shall consult with each other
in issuing any press releases or otherwise making public statements with respect
to the transactions contemplated hereby and neither party shall issue any such
press release or otherwise make any such public statement without the prior
written consent of the other, which consent shall not be unreasonably withheld
or delayed, except that no prior consent shall be required if such disclosure is
required by law, in which such case the disclosing party shall provide the other
party with prior notice of such public statement.
6.12 SEVERABILITY. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affecting or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.
6.13 DELIVERY OF W-8. The Purchaser shall deliver to the Company a
completed and executed Form W-8.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE FOLLOWS]
29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized persons as of the date first
indicated above.
Company:
IMMUNOGEN, INC.
By:
Name:
Title:
Purchaser:
SOUTHBROOK INTERNATIONAL
INVESTMENTS, LTD.
By:
Name:
Title:
30
Schedule 2.1(c)
Capitalization
--------------
31
SCHEDULE 2.1(F)
Consents and Approvals
----------------------
None
32
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
Between
IMMUNOGEN, INC.
and
SOUTHBROOK INTERNATIONAL INVESTMENTS, LTD.
------------------------------
Dated as of October 16, 1996
------------------------------
33
TABLE OF CONTENTS
PAGE
----
ARTICLE I PURCHASE AND SALE OF PREFERRED SHARES........................................... 1
1.1 Purchase and Sale............................................................ 1
1.2 Purchase Price............................................................... 2
1.3 The Closings................................................................. 2
(a) The Series B Closing................................................. 2
(b) The Series C Closing................................................. 2
(c) The Series D Closing................................................. 3
(d) The Series E Closing................................................. 3
ARTICLE II REPRESENTATIONS AND WARRANTIES................................................. 5
2.1 Representations, Warranties and Agreements of the Company.................... 5
(a) Organization and Qualification....................................... 5
(b) Authorization; Enforcement........................................... 5
(c) Capitalization....................................................... 6
(d) Issuance of Shares................................................... 6
(e) No Conflicts......................................................... 7
(f) Consents and Approvals............................................... 7
(g) Litigation; Proceedings.............................................. 8
(h) No Default or Violation.............................................. 8
(i) Disclosure Materials................................................. 8
(j) Private Offering..................................................... 8
(k) SEC Documents........................................................ 9
(l) Seniority............................................................ 9
2.2 Representations and Warranties of the Purchaser.............................. 9
(a) Organization; Authority.............................................. 9
(b) Investment Intent.................................................... 10
(c) Purchaser Status..................................................... 10
(d) Experience of Purchaser.............................................. 10
(e) Ability of Purchaser to Bear Risk of Investment...................... 10
(f) Prohibited Transactions.............................................. 10
(g) Access to Information................................................ 10
(h) Reliance............................................................. 10
ARTICLE III OTHER AGREEMENTS OF THE PARTIES............................................... 11
3.1 Transfer Restrictions........................................................ 11
3.2 Stop Transfer Instruction.................................................... 12
3.3 Furnishing of Information.................................................... 12
3.4 Notice of Certain Events..................................................... 12
3.5 Copies and Use of Disclosure Materials....................................... 13
3.6 Blue Sky Laws................................................................ 13
3.7 Integration.................................................................. 13
34
PAGE
----
3.8 Solicitation Materials................................................................. 13
3.9 Certain Agreements..................................................................... 13
3.10 Purchaser Ownership of Common Stock.................................................... 13
3.11 Listing of Underlying Shares........................................................... 14
3.12 Conversion Procedures.................................................................. 14
3.13 Purchaser's Rights if Trading in
Common Stock is Suspended.............................................................. 14
3.14 No Violation of Applicable Law......................................................... 14
3.15 Dividend Restrictions.................................................................. 15
3.16 Piggyback Registration Rights.......................................................... 15
3.17 Notice of Breaches..................................................................... 16
3.18 Additional Warrants.................................................................... 16
3.19 Volume Restrictions; Restrictions on Short Sales....................................... 17
3.20 Conversion Obligations of the Company.................................................. 17
ARTICLE IV CONDITIONS................................................................................ 17
4.1(a) Conditions Precedent to the Obligation of the Company
to Sell the Series B Shares........................................................... 17
(i) Accuracy of the Purchaser's Representations and Warranties..................... 17
(ii) Performance by the Purchaser................................................... 17
(iii) No Injunction.................................................................. 17
(iv) Required Approvals............................................................. 18
(b) Conditions Precedent to the Obligation of the Purchaser
to Purchase the Series B Shares....................................................... 18
(i) Accuracy of the Company's Representations and Warranties....................... 18
(ii) Performance by the Company..................................................... 18
(iii) No Injunction.................................................................. 18
(iv) Adverse Changes................................................................ 18
(v) No Suspensions of Trading in Common Stock...................................... 18
(vi) Listing of Common Stock........................................................ 19
(vii) Legal Opinion.................................................................. 19
(viii) Required Approvals............................................................. 19
(ix) Shares of Common Stock......................................................... 19
(x) Delivery of Stock Certificates................................................. 19
(xi) Registration Rights Agreement.................................................. 19
(xii) Warrant........................................................................ 19
(xiii) Certificate of Vote of Directors............................................... 19
(xiv) Company Certificates........................................................... 19
4.2 Conditions Precedent to the Obligation of the Purchaser to Purchase the Series
C Shares, the Series D Shares, the Series E Shares and the Series F Shares............ 20
(i) Series B Closing............................................................... 20
(ii) Accuracy of the Company's Representations and Warranties....................... 20
(iii) Performance by the Company..................................................... 20
(iv) Underlying Securities Registration Statements.................................. 20
35
PAGE
----
(v) No Injunction............................................................ 21
(vi) Adverse Changes.......................................................... 21
(vii) Trading Volume........................................................... 21
(viii) Litigation............................................................... 21
(ix) Management............................................................... 21
(x) No Suspensions of Trading in Common Stock................................ 21
(xi) Listing of Common Stock.................................................. 21
(xii) Legal Opinion............................................................ 22
(xiii) Required Approvals....................................................... 22
(xiv) Shares of Common Stock................................................... 22
(xv) Delivery of Stock Certificates........................................... 22
(xvi) Performance of Conversion/Exercise Obligations........................... 22
(xvii) Form S-3 Eligibility..................................................... 22
ARTICLE V TERMINATION.......................................................................... 22
5.1 Termination by Mutual Consent.................................................... 22
5.2 Termination by the Company....................................................... 23
5.3 Termination by the Purchaser..................................................... 23
ARTICLE VI MISCELLANEOUS....................................................................... 25
6.1 Fees and Expenses................................................................ 25
6.2 Entire Agreement; Amendments..................................................... 26
6.3 Notices.......................................................................... 26
6.4 Amendments; Waivers.............................................................. 27
6.5 Headings......................................................................... 27
6.6 Successors and Assigns........................................................... 27
6.7 No Third-Party Beneficiaries..................................................... 27
6.8 Governing Law.................................................................... 28
6.9 Survival......................................................................... 28
6.10 Execution........................................................................ 28
6.11 Publicity........................................................................ 28
6.12 Severability..................................................................... 28
6.13 Delivery of W-8.................................................................. 28
Exhibit A - Form of Certificate of Vote of Directors
Exhibit B - Registration Rights Agreement
Exhibit C - Conversion Procedures
Exhibit D - Form of Legal Opinion
Exhibit E(1) - Form of Initial Warrant
Exhibit E(2) - Form of Xxxxx Xxxxxxx Warrant
Exhibit F - Form of Subsequent Warrants
36
Schedule 2.1(c)
---------------
Capitalization as of October 16, 1996
-------------------------------------
PREFERRED STOCK
---------------
Total shares preferred stock 5,000,000
authorized
Series A Preferred Stock 2,500
Outstanding-CVI
Net preferred shares available 4,997,500
COMMON STOCK
------------
Total shares common stock 30,000,000
authorized
Total common shares 16,961,494
outstanding
Total common shares reserved 2,882,000
for CVI-including warrants to
purchase 1,009,000 shares
Other common stock warrants
outstanding-
Aberlyn 26,738
LBC 250,000
Common stock options 1,672,718 21,792,950
--------- ----------
outstanding
Net common shares available 8,207,050
=========
Registration Rights
-------------------
Registration rights as of October 16, 1996:
Aeneas Venture Corporation 533,822
Inco Securities Corporation 258,947
Aberlyn Capital Management 26,738 819,507
=======
ImmunoGen has also agreed to register common stock underlying Series A Preferred
Stock and warrants issued to Capital Ventures International pursuant to a
Securities Purchase Agreement dated as of March 15, 1996, as amended.
37
Schedule 2.1 (f)
----------------
None
38
Schedule 2.1(g)
---------------
None
39
AGREEMENT
AGREEMENT (this "Agreement"), dated as of October 16, 1996, between
Southbrook International Investments, Ltd., a corporation organized and existing
under the laws of the British Virgin Islands ("Southbrook"), Xxxxx Xxxxxxx LLC,
a limited liability company organized and existing under the laws of New York
("Xxxxx Xxxxxxx"), and ImmunoGen, Inc., a corporation organized and existing
under the laws of Massachusetts (the "Company").
WHEREAS, Southbrook and the Company have entered into a Convertible
Preferred Stock Purchase Agreement, dated as of the date hereof (the "Purchase
Agreement"), providing for the issuance and sale to Southbrook of certain
warrants and shares of preferred stock;
WHEREAS, the parties desire to modify the terms of the Purchase Agreement
as follows:
1. Capitalized terms used and not otherwise defined herein shall have
the respective meanings set forth in the Purchase Agreement.
2. Notwithstanding anything to the contrary contained in the Purchase
Agreement, the parties agree that the Initial Warrant shall be issued as
follows:
(a) The Company shall issue to Southbrook a common stock purchase
warrant substantially in the form of Exhibit E to the Purchase Agreement to
purchase 187,500 shares of Common Stock at an exercise price equal to 150%
of the Market Price on the Series B Closing Date; and
(b) The Company shall issue to Xxxxx Xxxxxxx a common stock purchase
warrant (the "Xxxxx Xxxxxxx Warrant") substantially in the form of Exhibit
E to the Purchase Agreement to purchase 62,500 shares of Common Stock at an
exercise price equal to 150% of the Market Price on the Series B Closing
Date.
3. Xxxxx Xxxxxxx hereby represents and warrants to the Company as follows:
(a) Xxxxx Xxxxxxx is acquiring the Xxxxx Xxxxxxx Warrant and the
underlying Warrant Shares for its own account for investment purposes only
and not with a view to or for distributing or reselling such Xxxxx Xxxxxxx
Warrant or Warrant Shares or any part thereof or interest therein, without
prejudice, however, to Xxxxx Xxxxxxx'x right, subject to the provisions of
the Purchase Agreement and the Registration Rights Agreement, at all times
to sell or otherwise to dispose of all or any part of the Xxxxx Xxxxxxx
Warrant or the Warrant Shares pursuant to an effective registration
statement under the Securities Act and in compliance with applicable State
securities laws or under an exemption from such registration.
40
(b) At the time Xxxxx Xxxxxxx was offered the Xxxxx Xxxxxxx Warrant,
it was, and at the date hereof, it is, and at the issuance date of the
Xxxxx Xxxxxxx Warrant and each exercise date thereunder, it will be, an
"accredited investor, as defined in Rule 501(a) under the Securities Act.
(c) Xxxxx Xxxxxxx, either alone or together with its representatives,
has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Xxxxx Xxxxxxx Warrant and the Warrant Shares,
and has so evaluated the merits and risks of such investment.
(d) Xxxxx Xxxxxxx is able to bear the economic risk of an investment
in the Xxxxx Xxxxxxx Warrant and the Warrant Shares and, at the present
time, is able to afford a complete loss of such investment.
(e) The Xxxxx Xxxxxxx Warrant to be purchased by Xxxxx Xxxxxxx is not
being acquired, directly or indirectly, with the assets of any "employee
benefit plan," within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended.
(f) Xxxxx Xxxxxxx acknowledges receipt of the Disclosure Materials and
further acknowledges that is has been afforded (i) the opportunity to ask
such questions as it has deemed necessary of, and to receive answers from
representatives of the Company concerning the terms and conditions of the
offering of the Xxxxx Xxxxxxx Warrant; (ii) access to information about the
Company and the Company's financial condition, results of operations,
business, properties, management and prospects sufficient to enable it to
evaluate its investment; and (iii) the opportunity to obtain such
additional information which the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an informed
investment decision with respect to the investment and to verify the
accuracy and completeness of the information contained in the Disclosure
Materials.
(g) Xxxxx Xxxxxxx understands and acknowledges that (i) the Xxxxx
Xxxxxxx Warrant is being offered and sold, and the Warrant Shares are being
offered, to it without registration under the Securities Act in a private
placement that is exempt from the registration provisions of the Securities
Act under Regulation D promulgated thereunder and (ii) the availability of
such exemption depends in part on, and the Company will rely upon the
accuracy and truthfulness of, the foregoing representations and Xxxxx
Xxxxxxx hereby consents to such reliance.
4. With respect to the registration of the Warrant Shares underlying
the Xxxxx Xxxxxxx Warrant, Xxxxx Xxxxxxx shall be a party to the Registration
Rights Agreement and the Warrant Shares issuable upon exercise of the Xxxxx
Xxxxxxx Warrant shall be Registrable Securities (as defined in Registration
Rights Agreement).
5. Except as modified herein, the Purchase Agreement shall remain in
full force and effect.
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41
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized persons as of the date first
indicated above.
IMMUNOGEN, INC.
By:
----------------------------
Name:
Title:
SOUTHBROOK INTERNATIONAL
INVESTMENTS, LTD.
By:
----------------------------
Name:
Title:
XXXXX XXXXXXX, LLC
By:
----------------------------
Name:
Title:
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